SC asks GST Council to issue advisory to states to implement system of electronic generation of DIN

A DIN is a 20-digit identification code that is affixed to every communication sent to taxpayers by the government.

SC asks GST Council to issue advisory to states to implement system of electronic generation of DIN
The bench passed the order on a petition filed by a Chartered Accountant who sought direction to the authorities for taking necessary steps. (File)

The Supreme Court has directed the GST Council to issue advisory to states for implementation of the system of electronic generation of Document Identification Number (DIN) in indirect tax administration, saying it will bring in transparency and accountability vital to efficient governance.

A DIN is a 20-digit identification code that is affixed to every communication sent to taxpayers by the government.

The apex court said it cannot be disputed that implementing the system for electronic (digital) generation of DIN for all communications sent by state tax officers to taxpayers and others concerned would be in the larger public interest and enhance good governance.

“It will bring in transparency and accountability in the indirect tax administration, which are so vital to efficient governance,” a bench of Justices M R Shah and B V Nagarathna said.

“Therefore, we dispose of the present writ petition by directing the Union of India/GST Council to issue advisory/instructions/recommendations to the respective states regarding implementation of the system of electronic (digital) generation of a DIN in the indirect tax administration, which is already being implemented by the states of Karnataka and Kerala,” the bench said in its order passed last month.

The top court noted that in view of the implementation of the Goods and Services Tax (GST) and as per Article 279A of the Constitution, the GST Council is empowered to make recommendations to states on any matter relating to GST.

“The GST Council can also issue advisories to the respective states for implementation of the DIN system, which shall be in the larger public interest and which may bring in transparency and accountability in the indirect tax administration,” it said.

The bench passed the order on a petition filed by a Chartered Accountant who sought direction to the authorities for taking necessary steps to implement a system for electronic generation of DIN for all communications sent by the state tax officers to taxpayers and others concerned.

The petition had also sought directions, including to the GST Council to consider and take a policy decision in respect of implementation of DIN system by all states.

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The bench said, as of today, only two states — Karnataka and Kerala — have implemented the system for electronic (digital) generation of a DIN in indirect tax administration, which is “laudable and to be appreciated”.

“We impress upon the concerned states to consider to implement the system for electronic (digital) generation of a DIN for all communications sent by the state tax officers to taxpayers and other concerned persons so as to bring in transparency and accountability in the indirect tax administration at the earliest,” the top court said.

While disposing of the petition, the bench directed the apex court registry to send a copy of its order to the chief secretaries of all the respondent states to take note of and initiate further steps.

The bench noted it is the case of the petitioner that even the Prime Minister had earlier asked the Department of Revenue to come up with specific measures to ensure that honest taxpayers are not harassed and served better.

The petitioner had submitted that in pursuance of the directions issued by the Prime Minister, the central government had taken a decision in 2019 to implement the DIN system of Central Board of Direct Taxes (CBDT).

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The petitioner had also submitted that as per the press note issued by the Ministry of Finance, on and from October 1, 2019, every CBDT communication will have to have a DIN.

The bench noted that Additional Solicitor General Balbir Singh, appearing for the Centre, had submitted that the “Union of India does not dispute that implementing a system for electronic (digital) generation of DIN will bring in transparency and accountability in the indirect tax administration”.

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