On March 30, 2024, the Central Board of Indirect Taxes and Customs (CBIC) issued new guidelines to all CGST field formations. The aim is to balance enforcement activities with maintaining the ease of doing business for regular taxpayers. The Board has emphasized the need for a uniform procedure that respects legal provisions and minimizes disruptions to businesses. Here are the key aspects of these guidelines:
Centralized Intelligence and Investigations
The guidelines mandate that each investigation must be initiated only after approval from the (Pr.) Commissioner. They are responsible for developing intelligence, conducting searches, and completing investigations within their jurisdiction. Any intelligence related to another CGST field formation must be forwarded to the relevant formation or the Directorate General of GST Intelligence (DGGI).
Approval for Sensitive Cases
For certain sensitive cases, prior approval from the zonal (Pr.) Chief Commissioner is required. These cases include:
- Matters involving the interpretation of tax/duty for the first time.
- Investigations involving large industrial houses or multinational corporations.
- Sensitive matters or those with national implications.
- Issues already before the GST Council.
- In these scenarios, field formations must gather information on trade practices and the nature of transactions from stakeholders to justify the investigation.
Coordination between Agencies
If another CGST field formation, DGGI, or State GST department is also investigating the same taxpayer on different matters, the (Pr.) Commissioner must engage in dialogue to possibly consolidate the investigations. If consolidation is not feasible, reasons must be documented.
Handling Multi-Jurisdictional Cases
For investigations involving multiple jurisdictions under the same PAN, or multiple PANs, the (Pr.) Commissioner must seek approval to either share a self-contained reference with concerned zones or request the Pr. DG DGGI to issue an alert.
Addressing Prevalent Trade Practices
When an investigation is based on trade practices or interpretations likely to cause litigation, the zonal (Pr.) Chief Commissioner should refer the matter to the relevant policy wing of the Board. This should be done before concluding the investigation to ensure uniformity and avoid litigation.
Respectful Communication with Entities
Investigations involving listed companies, PSUs, government departments, or authorities established by law should begin with official letters rather than summons. These letters should detail the reasons for the investigation and the relevant legal provisions, giving the entity a reasonable time to respond. Summons should only be issued if absolutely necessary and must be reasoned and approved by an officer not below the rank of Dy./Asst. Commissioner.
Specificity in Communication
Any letter or summons should specify the nature of the inquiry and avoid vague terms like “GST enquiry” or “evasion of GST.” Information available digitally should not be requested through letters or summons. Summons should not be used to seek information in pre-specified formats.
Timely Conclusion of Investigations
Investigations should be concluded within one year, and show cause notices should not be delayed after the investigation is complete. The closure report should be concise and explain the issue and period involved. This ensures transparency and reduces the potential for malpractice.
Grievance Redressal
The (Pr.) Commissioner must proactively prevent complaints related to investigations. The Addl./Jt. Commissioner in charge of the investigation will act as the Grievance Officer, available to taxpayers via letter, email, or appointment. If grievances persist, taxpayers may meet with the (Pr.) Commissioner by appointment for resolution.
These guidelines reflect CBIC’s commitment to balancing robust tax enforcement with facilitating a business-friendly environment. They aim to ensure that investigations are conducted fairly, transparently, and efficiently, minimizing disruptions to legitimate business activities.
