Instruction No. 01/2024-GST
To address the issue of Proper Officers initiating recovery proceedings before 3 months from the date of service of demand order, CBIC issues instructions for early recovery u/s 78 of the CGST Act, 2017, in the interest of revenue; Clarifies that in such cases, the jurisdictional Dy. or Asst. Commissioner of Central tax shall place the matter before the jurisdictional Principal Commissioner/Commissioner of Central Tax, who will be the ‘Proper Officer’, along with evidence-backed reasons; Specifies that these reasons must clearly outline the circumstances prompting such early payment, and might include reason of high risk to revenue due to following apprehensions— (i) potential closure of business operations, (ii) potential default due to financial decline or impending insolvency, or (iii) possible initiation of insolvency and bankruptcy proceedings; Lays out that the proper officer will examine the reason, and after recording reasons in writing for early payment, direct the concerned assessee to pay the amount within a specified period; Stresses that the directions for early payment “should not be issued in a mechanical manner” and the Proper Officer “must” duly consider (i) the financial health, status of business operations, infrastructure, and credibility of assessee, and (ii) strike a balance between interest of the revenue and ease of doing business.