GST investigation guidelines

The Central Board for Indirect Taxes and Customs (CBIC) recently issued a set of 18 guidelines to department personnel on conducting investigations and enforcement.

The Principal Commissioner is authorised to conduct investigations and enable enforcement; his approval is mandatory. In four instances, the guidelines specify that written approval from the Principal Chief Commissioner is necessary. These include interpretation of the law when the tax is levied for the first time, summons being issued to big industrial houses or major multinational corporations, sensitive matters or matters with national implications, and matters that are already before the GST Council. Apart from a written permission, the guidelines elaborate that the concerned CGST field formation should also collect details regarding the prevalent trade practices and the nature of transactions carried out by stakeholders.

The implications and impact of such a matter should be studied so as to have adequate justification for initiating an investigation and taking action. It would be interesting to see how this guideline is implemented on the ground, as definitions of big industrial houses, major MNCs, sensitive matters, and matters with national implications have not been provided.

Given the “one nation, one tax” advertisement, every levy could have national implications. Would investigations into gaming companies be considered to have national implications warranting written approval from the Principal Commissioner? The directive to study the prevalent trade practices and their implications is welcome and could reduce the intent of revenue maximisation that is prevalent today.

Source : https://www.deccanherald.com/opinion/gst-investigation-guidelines-2998771