Jurisdiction of taxpayer should not hamper GST enforcement action, says CBIC

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New Delhi | Published: October 9, 2018 4:47:29 PM

The CBIC has asked tax officials of the Centre as well as state governments to initiate enforcement actions against GST evaders irrespective of jurisdiction with a view to checking revenue leakage.

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The CBIC has asked tax officials of the Centre as well as state governments to initiate enforcement actions against GST evaders irrespective of jurisdiction with a view to checking revenue leakage. The Central Board of Indirect Taxes and Customs (CBIC), in a communication to the field formations, has said that “intelligence based enforcement action” against a taxpayer can be initiated by Central and state officials even if the assessee does not fall under the official’s jurisdiction.

Under the Goods and Services Tax (GST) regime, which was rolled out from July 1, 2017, the taxpayers were assigned to Central and state officials on the basis of annual turnover. The communication seeks to end the ambiguity regarding initiation of enforcement action by central tax officials in case the taxpayer is assigned to state tax authority or vice versa.

The GST Council had in January 2017 decided that both the central and state tax administration would have the power to take intelligence-based enforcement action. “… the officers of both the central tax and state tax are authorised to initiate intelligence based enforcement action on the entire taxpayer’s base irrespective of the administrative assignment of the taxpayer to any authority.

“The authority which initiates such action is empowered to complete the entire process of investigation, issuance of SCN (show-cause notice), adjudication, recovery, filing of appeal, etc, arising out of such action,” the CBIC said.  This would mean that central tax officials would not transfer cases to state officials and vice versa even if the assessee is not under their jurisdiction.

The CBIC’s move to step up enforcement actions, officials said, will help in expediting enforcement action against erring taxpayers and also increase collection by plugging leakages. “Equally cross-empowering Central and state agencies to initiate enforcement action against a taxpayer irrespective of its jurisdictional authority may be a good decision from the perspective of revenue, however it may lead to multiple layers of bureaucracy hammering ease of doing business,” AMRG & Associates Partner Rajat Mohan said.

The finance ministry has targeted monthly GST collections to be Rs 1 lakh crore for this fiscal, but the actual mop-up has fallen short of the target month after month. The sole exception was the month of April in which the numbers exceeded Rs 1 lakh crore. The collections stood at Rs 94,016 crore in May, Rs 95,610 crore in June, Rs 96,483 crore in July, Rs 93,960 crore in August and Rs 94,442 crore in September.

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