GST: REPRESENTATION ON SUMMONS, INVESTIGATIONS, AND GST AUDIT

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GST: REPRESENTATION ON SUMMONS, INVESTIGATIONS, AND GST AUDIT

Tejasvi

@tejasvi

May 27, 2022

Public Policy

267

We have a submission to GST officials on May 26, 2022 highlighting some of the issues being faced by the Industry in relation to summons, investigations and GST audits.

Summons –

In recent times, there has been a surge in summons issued to top management of companies by GST authorities including DGGI requiring CFOs or CXOs of companies to be mandatorily present in person for proceedings, without even affording those handling GST compliances within the Company to present their case. Further, more often than not, these summons are issued at the information gathering stage of a proceeding and not when the proceedings are at an advance stage. Moreover, issues that are picked up for investigations by the GST authorities, specifically by DGGI are revenue neutral in nature or are based on advance rulings issued by authorities of advance rulings in multiple states which are taxpayer specific. This results in compliance burden for the taxpayers.

Recommendation

We have requested that there should be a proper hierarchy for issuance of summons. The investigating authority should not issue summons to top management of the company such as director, CEO, CFO, General Manager of a large company or a PSU in the first instance.
Investigating authority including DGGI should focus more on tax evasion issues and not which are revenue neutral in nature. DGGI should ensure that communication between CBIC and taxpayers are implemented at ground level in spirit.
Information available on GSTIN portal should be accessed by the investigating authorities (including DGGI). Where there are multiple proceeding pending before multiple states, option should be provided to taxpayers to a make a request for clubbing of these investigation into one.

GST Audits

There has been a sharp increase in GST audits by both Central and State GST departments. There is a need for an all-India SOPs for the documents/data that can be requested, issues that need to be checked in detail, and matters where reliance can be placed on GSTR-9 and GSTR-9C, instead of voluminous data/documents, books of accounts again.

Recommendation – Government should issue a comprehensive SOP, guiding both the State and Central GST audit departments, regarding the procedure to be followed, and categorisation of verification i.e., issues which need thorough verification, issues for which GSTR-9 and GSTR-9C can be the basis, documents that can be called for, etc.

Duplicity of proceedings

Authorities at the State and Central level are approaching companies parallelly for investigations under GST. As a result, companies are facing hardships in handling the matter conjointly with both the authorities. Hence, there is a need to issue instructions to field formations to abstain from proceeding with investigations, where inquiries are already under progress by another authority or agency.

Recommendations – We have requested the government to issue appropriate instructions to field formations to abstain from proceeding with investigations, where inquiries are already under progress by another authority or agency. Government should also issue a detailed guidelines for companies to adhere in case of multiple investigations.

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Tejasvi

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