GST Update: Issue of guidelines by DGGI on investigation and summons

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GST Update: Issue of guidelines by DGGI on investigation and summons

Tejasvi

@tejasvi

March 28, 2024

Public Policy

The Directorate General of GST Intelligence (DGGI) recently issued detailed guidelines for conducting investigations and for issuance of summons.

Summary of the guidelines is provided below:

DGGI officers at its Headquarter, the 26 Zonal Units (ZU) and 40 Regional Units (RU) have all-India jurisdiction for the purposes of their role in compliance management framework of GST and Central Excise. Under GST, investigation may be made by DGGI or jurisdictional CGST formations or the States.
Approval of DG/ Pr. DG in specific instances

The Instruction states that approval is required to be sought from the Directorate General (DG) in case of:

Matters involving interpretation seeking to levy tax/ duty on any sector/ commodity/ service for the first time, whether in Central Excise or GST; or
Big industrial house and major multinational corporations; or
Sensitive matters or matters with national implications; or
Matters which are already before GST Council.

For category (iii) or (iv) above, before any precipitative action is taken in investigation, the respective DG is required to necessarily bring the matter to the notice of the Principal DG.

Home State of the taxpayer to be given consideration

In case of record-based investigations, the convenience of such taxpayer/entity in terms of location of its head/registered office or accounting office etc. should be considered, and as and when necessary or relevant one of the zonal units of the DGGI is to be designated for conducting such investigations.
Further, in case of record-based investigations, only the zonal unit which has the entity registered in its geographical jurisdiction can initiate investigations.

Manner of issuance of summons

Summons to not be used as means to seek information filled in formats or proforma (specified by investigation)
Vague (or general) expressions, such as that the officer is making inquiry in connection with "GST enquiry" or "evasion of GST" or "GST evasion" etc. must not be mentioned in the letter/summons. Rather, such letter/summons should disclose the specific nature of the inquiry being initiated/undertaken.
Information available digitally/online on GST portal should not be called for under letter/summons.
The summons in conduct of investigation must not convey requests outside the scope defined for a summons, e.g. under section 70 of CGST Act. Further, if a taxpayer has utilized ITC towards payment of GST on its outward supplies, it is not acceptable to seek via summons/letter aspects such as - 'please clarify whether ITC availed and utilized was proper."
Addressing letter/summons with context or content akin to a fishing inquiry is not acceptable.

Cognizance to trade practice

Prevalent trade practice based on particular interpretation that is followed on that issue in the sector/industry to be considered in investigations.

Reference to GST policy wing

Reference to be made to GST Policy/ TRU before concluding investigations (as much in advance as feasible before issuance of SCN) where it would be useful in promoting uniformity or avoiding litigation on matters.

Investigations cannot replace what would other be a routine matter of audit scrutiny (Para 3(a))

DGGI should not take up a role not assigned in DGGI charter. Zonal units to avoid taking up such functions, under provisions of law/rules, that more appropriately fall in the purview of return scrutiny or audit.

Multiple/ parallel proceedings

Where the subject matter of investigation is also pending with CGST/ SGST zone, officers to dialogue with other investigating office(s) and consider feasibility of one of the offices pursuing all these subject matters with respect to the taxpayer. If this outcome is not feasible, the reasons therefor should be confirmed by DG.
Principal DG will decide on whether it would be more prudent for CGST formations to pursue matters which impact GSTINs PAN India.

Grievance Redressal Mechanism

Additional/Joint Director (Admn.) of zonal units appointed as Grievance Officer whom taxpayer may approach (through letter, email or by appointment) with grievance, if any, related to an ongoing investigation, for appropriate redressal. In case the reasonable grievance persists, the Pr. ADG/ADG of zonal units to be approached.

The guidelines are a positive development and will help in addressing challenges being faced by the taxpayers during DGGI investigations.

Please write to tejasvi@nasscom.in in case you have any feedback

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Tejasvi