| CBIC's guidance on 'investigations' to CGST field formations for maintaining ease of doing business |
The Central Board of Indirect Taxes and Customs (CBIC) has issued guidelines [Instruction No. 01/2023-24-GST (Inv.)] for CGST field formations to follow uniform procedures while conducting investigations involving regular taxpayers. The guidelines aim to strike a balance between enforcement activities and maintaining the ease of doing business.
- The (Pr.) Commissioner within the allocated jurisdiction (Commissionerate) will be responsible to develop and approve intelligence, conduct searches, complete investigations, and the relevant subsequent action.
- Investigations must be initiated only after approval from the (Pr.) Commissioner or (Pr.) Chief Commissioner, depending on the case category.
- Coordination between CGST field formations, DGGI, and State GST departments is emphasized to avoid duplication of efforts.
- Engagement with stakeholders and studying trade practices is recommended before initiating investigations in sensitive matters.
- Scenarios involving the interpretation of GST law, Notifications, Circulars, etc. vis-a-vis prevalent trade practices should be referred to the GST Policy Wing or TRU to avoid undue litigation.
- Before initiating an investigation, it must be ascertained if there is an ongoing inquiry on the same subject matter with respect to the same taxpayer/GSTIN.
- Initial communication with listed companies, PSUs, and government entities should be through official letters rather than summons.
- Summons must be issued with prior reasoned approval, and information available digitally/online on the GST portal should not be called for under summons.
- Summons should clearly specify the nature of the inquiry and avoid vague or broad language. Fishing inquiry is not acceptable.
- Investigations should be concluded within one year, and delays in issuing show-cause notices or closure reports should be avoided.
- A grievance redressal mechanism has been established for the taxpayers, with the Addl./Jt. Commissioner in-charge of the investigation as the Grievance Officer.
The guidelines are likely to positively impact GST taxpayers, particularly regular and compliant taxpayers. The emphasis on completing investigations within a year and the establishment of a grievance redressal mechanism will provide greater certainty and recourse for taxpayers. Additionally, the guidelines discourage fishing inquiries and unnecessary information requests, which should reduce compliance burdens.
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