₹71 Lakh GST Demand from Facebook Posts: Lessons from Vasavi Wedding Case for Indian Businesses

In today’s digital age, social media has become a powerhouse for marketing, especially for service-based businesses like event planners, wedding organizers, and small enterprises. A single Instagram Reel or Facebook post can showcase your work, attract clients, and boost sales. However, a recent Andhra Pradesh High Court case—Vasavi Wedding & Event Planners vs State of Andhra Pradesh (WP No. 10250 of 2022)—serves as a stark reminder: your social media activity can also land you in hot water with the GST department. Here, an event management firm faced a whopping ₹71.10 lakh GST demand purely based on their Facebook posts promoting weddings and events. This blog dives deep into the case details, court’s reasoning, GST implications under Section 71, and practical compliance tips to safeguard your business. As founder of Kyna FinTax Associates, a Delhi-Rajasthan based firm specializing in GST compliance, MCA filings, and tax audits, I’ll break it down for you step-by-step.

The Shocking Trigger: How Facebook Posts Became GST Evidence

Imagine posting vibrant photos of a grand wedding mandap or a lively birthday bash on your Facebook page to attract future clients. For Vasavi Wedding & Event Planners, this routine marketing turned into a nightmare. The GST Department, during an assessment for FY 2017-18 to 2020-21, scoured their social media profiles. They identified posts depicting various events—weddings, birthdays, corporate gatherings—and interpreted them as irrefutable proof of undisclosed turnover.

The show cause notice (SCN) dated January 28, 2022, proposed a staggering tax demand:

• IGST: ₹18 lakh
• CGST: ₹26.55 lakh
• SGST: ₹26.55 lakh
• Total: ₹71.10 lakh (plus interest and penalty)

Under Section 71 of the CGST Act, authorities can scrutinize books of accounts, social media, and other records to determine correct tax liability if they suspect suppression of turnover. The department cross-verified the posts against GSTR-1 and GSTR-3B filings, finding no matching invoices. Post-COVID claims of zero business were dismissed, as older posts suggested ongoing operations. This case highlights how digital footprints—likes, shares, comments—now form an “audit trail” in GST enforcement.

Event management services attract 18% GST (9% CGST + 9% SGST), making unreported events a high-value target. For businesses in Andhra Pradesh and beyond, this underscores the need for digital hygiene alongside financial records.

Petitioner’s Defense: Ads vs Actual Events

Vasavi Wedding & Event Planners challenged the assessment order via a writ petition in the Andhra Pradesh High Court. Their key arguments were compelling yet insufficient for writ relief:

1. Posts as Mere Advertisements: The firm contended that Facebook images were promotional content recycled from pre-COVID events (2017-2019). No new events occurred after March 2020 due to nationwide lockdowns and personal tragedies, including the proprietor’s father’s demise.
2. No Post-COVID Business: They provided affidavits claiming zero turnover during the pandemic, aligning with industry-wide shutdowns. Wedding planners across India reported 80-90% revenue drops in 2020-21.
3. Violation of Natural Justice: Despite requesting a personal hearing, the assessment was passed ex-parte on March 15, 2022. No opportunity to present evidence or cross-examine the social media interpretation was granted, breaching principles under Section 75(4) of CGST Act.

The firm had a valid GST registration but minimal filings, fueling suspicion. They argued the department’s reliance on unverified social media ignored ground realities like event cancellations.

Court’s Verdict: Why the Writ Failed

The Andhra Pradesh High Court, in its July 2022 order, dismissed the petition with reasoned observations:

• No Breach of Natural Justice: A hearing notice was issued via email and post, granting 15 days to respond. The petitioner attended virtually but failed to submit documents. The court held that “personal hearing” doesn’t mandate physical presence if opportunity was provided—echoing precedents like Union of India vs. Jesus Sales Corporation.
• Disputed Questions of Fact: Whether posts depicted real, taxable events or just ads is a factual dispute. Courts via writ jurisdiction (Article 226) don’t re-appreciate evidence; that’s for appellate forums.
• Alternative Remedy Available: GST law provides a robust appeal mechanism—First Appellate Authority (within 3 months), then Tribunal, High Court, and Supreme Court. Writ is extraordinary, not a substitute.

The bench directed the firm to appeal the order, potentially with condonation of delay. This ruling reinforces judicial restraint in tax matters, prioritizing statutory remedies.

Broader GST Compliance Implications for Social Media Users

This isn’t an isolated incident. Similar cases have emerged:

• Lakshmi Sowjanya Enterprises (Andhra HC): GST demand upheld based on online promotions.
• Nationwide Trend: Departments in Maharashtra, Karnataka, and Delhi now use tools to scrape Instagram, LinkedIn, and YouTube for turnover estimation.

Section 71 Powers: Allows provisional attachment of records, including digital ones. Penalties under Section 122 (100% of tax) and interest at 18% p.a. compound the pain.

For sectors like:

• Event Management/Weddings: Track every invoice against posts.
• Freelancers/Influencers: Distinguish sponsored content (18% GST if >₹20 lakh turnover).
• E-commerce Sellers: Amazon/Flipkart listings mirror social proof.

Post-53rd GST Council (2024), councils emphasized tech-driven audits, integrating AI for social media monitoring.

10 Practical Tips to Bulletproof Your GST Compliance

Protect your business from “social media tax traps” with these actionable steps:

1. Separate Marketing from Transactions: Use disclaimers like “Past Event Showcase” on posts. Maintain a content calendar logging ad vs real events.
2. Robust Record-Keeping: Invoice every event via GST-compliant software (e.g., ClearTax, Tally). Reconcile GSTR-1/3B monthly.
3. Digital Audit Prep: Download social media archives quarterly. Timestamp posts with metadata.
4. Respond to SCN Promptly: Reply within 15-30 days. Request adjournments in writing for hearings.
5. Professional Help: Engage CAs for Section 71 replies. At Kyna FinTax, we specialize in such defenses.
6. GSTR-9 Annual Returns: File accurately to preempt assessments.
7. COVID Relief Claims: Back with bank statements, affidavits—don’t rely on verbal pleas.
8. 18% GST for Events: Classify correctly (SAC 9983 for management services).
9. Appeal Strategy: File within 3 months + 1 month condonation. Success rate ~40% at first appeal.
10. Training: Educate your team on compliant posting.

Why This Matters for Indian MSMEs and Startups

India’s 6+ crore MSMEs contribute 30% to GDP, with many relying on social media for 70% lead generation (per FICCI). Yet, GST collections hit ₹2.1 lakh crore (Nov 2025), signaling aggressive enforcement under President Trump’s global trade influences. Non-compliance risks not just demands but license cancellations.

At Kyna FinTax Associates, we handle 500+ GST cases yearly—from GSTR-9C audits to ISO 9001 certifications. Based in Anupgarh (Rajasthan) with Delhi ops, we offer:

• GST Returns (GSTR-1, 3B, 9)
• MCA/ROC Filings
• Trademark Registrations
• Digital Marketing Compliance Audits

Post Wisely, Comply Smartly

The Vasavi case isn’t about punishing creativity—it’s a call for prudence. Your next LinkedIn post could be tomorrow’s exhibit. Stay compliant, document diligently, and consult experts. Ready to audit-proof your social media? DM Kyna FinTax Associates or visit kynafintax.com for a free GST health check.

Contact Us

Kyna FinTax Associates
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