The Ministry of Finance, Department of Revenue, Central Board of Indirect Taxes and Customs, issued guidelines to ensure ease of doing business while conducting investigations involving regular taxpayers. Dated 30th March 2024, the document outlines specific procedures for Central Goods and Services Tax (CGST) field formations to follow:
- Jurisdictional Accountability: Commissionerates are tasked with developing intelligence, conducting searches, and completing investigations within their jurisdiction as defined in notification No. 2/2017-Central Tax.
- Approval Process for Investigations: Prior approval from the (Pr.) Commissioner is mandatory for initiating investigations, with specific scenarios requiring the zonal (Pr.) Chief Commissioner’s written consent, including cases involving major industrial houses, matters with national implications, or issues before the GST Council.
- Collaboration and Information Sharing: When investigations concern taxpayers in different jurisdictions or are simultaneously undertaken by the Directorate General of Goods and Services Tax Intelligence (DGGI) or State GST departments, a collaborative approach is encouraged to consolidate efforts and avoid duplicative investigations.
- Reference to Policy Wings: In cases of multiple interpretations leading to potential litigation, it’s advised to refer the matter to the GST Policy wing or the Tax Research Unit for a unified approach, possibly bringing the matter before the GST Council.
- Communications with Businesses: Initial inquiries to listed companies, PSUs, and other governmental bodies should be through official letters detailing the investigation’s reasons and legal basis, avoiding general or vague language.
- Digital Information and Summons: Digital or online information available on the GST portal should not be redundantly requested, and summons should strictly adhere to the scope defined in section 70 of the CGST Act 2017, with prior reasoned approval for their issuance.
- Investigation Timelines: Investigations should conclude within one year, aiming for prompt issuance of show cause notices or closure reports to prevent malpractices.
- Grievance Redressal: A proactive approach to prevent complaints is emphasized, with the Addl./Jt. Commissioner acting as a Grievance Officer for taxpayers to address concerns related to ongoing investigations.
These guidelines aim to streamline the investigation process, ensure transparency and accountability, and minimize disruptions for taxpayers, fostering a more business-friendly environment in the CGST framework.