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A Deep Understanding of GST Department's Guidelines on Summons

Abhishek Raja , Last updated: 06 April 2024  
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The Indian GST Department has issued new guidelines Instruction No. 01-2023-24 dated 30-Mar-2024,  to CGST field formations on maintaining ease of doing business while engaging in investigations with regular taxpayers.

A Deep Understanding of GST Department s Guidelines on Summons

Here's a summary of the instructions

  1. Uniform Procedures: CGST field formations are to follow a uniform procedure in enforcement activities involving regular taxpayers to ensure ease of doing business.
  2. Jurisdiction and Approval:
    • Commissioners are responsible for developing intelligence, conducting searches, and completing investigations within their jurisdictions.
    • Information or intelligence related to another CGST field formation must be forwarded to the concerned formation or the Directorate General of GST Intelligence (DGGI).
  3. Initiation of Investigation:
    • Investigations must be approved by the Commissioner, except in cases involving interpretation issues, major corporations, sensitive matters, or matters before the GST Council, which require the Chief Commissioner's prior written approval.
  4. Coordination with Other Departments:
    • If other departments are also investigating the same taxpayer, the Commissioner must engage in dialogue to consider consolidating investigations.
  5. Investigations Involving Multiple Jurisdictions:
    • If an issue spans multiple jurisdictions, the Commissioner must make a self-contained reference to the Chief Commissioner or DGGI, as appropriate.
  6. Guidelines for Interaction with Taxpayers:
    • Initial inquiries should be made via official letters rather than summons, with specific reasons for the investigation provided.
    • Digital/online information available on the GST portal should not be redundantly requested from taxpayers.
  7. Use of Summons:
    • Summons should be used strictly within the scope defined by the CGST Act, avoiding broad or vague requests.
    • Approval for the content of summons should be obtained prior, and the relevancy and propriety of the information requested must be recorded.
  8. Investigation Timeline:
    • Investigations should conclude within one year, without unnecessary delays in issuing show cause notices or closure reports.
  9. Grievance Redressal:
    • The guidelines emphasize proactive measures to prevent complaints related to investigations. Taxpayers can approach the designated Grievance Officer for redressal of grievances related to ongoing investigations.

These guidelines aim to streamline GST investigations, ensuring fairness and transparency while minimizing disruption to the ease of doing business for taxpayers.

Instruction 2022

The Instruction No. 03/2022-23 issued by the GST Department focuses on guidelines regarding the issuance of summons under Section 70 of the Central Goods & Services Tax Act 2017. Here's a summary of the key points:

  1. Concerns Raised: The instruction addresses concerns over the routine issuance of summons to senior company officials and the request for documents already available online on the GST portal.
  2. Judicious Use of Summons: Summons should be issued judiciously, considering their impact. Officers are encouraged to request information through letters when possible, reserving summons for situations where they are necessary to obtain evidence or documents.
  3. Guidelines for Issuance:
    • Summons should generally be issued by Superintendents, after obtaining written permission from an officer not below the rank of Deputy/Assistant Commissioner.
    • In cases where prior written permission cannot be obtained, oral permission should be secured and documented at the earliest opportunity.
    • The officer issuing summons must record the appearance or non-appearance of the summoned person and maintain a copy of the statement in the file.
    • Summons should clarify whether the recipient is being summoned as an accused, co-accused, or witness, except where disclosing this information might harm the investigation.
    • Summoning senior management officials (like CMD, MD, CEO, CFO) should be avoided unless there is evidence of their involvement in decision-making that led to revenue loss.
    • Summons should not be issued for documents available online on the GST portal.
  4. Procedure and Compliance:
    • The summoning officer must be present at the time and date of the summons. Any changes must be communicated to the summoned person in advance.
    • Summons must be served properly, and repeated issuance without confirmation of service should be avoided. If a person fails to respond after being summoned three times, legal action may be considered under the relevant sections of the Indian Penal Code.
    • The instructions emphasize the generation and quoting of Document Identification Number (DIN) on all communications for transparency and accountability.
  5. Implementation and Oversight:
    • These guidelines are mandated for strict compliance across all field offices/formations. Non-compliance will be taken seriously.
    • Any difficulties in implementation should be reported to the Board.
 

The instruction underscores the importance of using the power to issue summons responsibly and with consideration for the principles of justice and efficiency in the tax investigation process.

Comparison of both Guidelines

Here's a table summarizing the differences between the GST Department's Instruction No. 03/2022-23 (2022) and Instruction No. 01/2023-24 (2024):

Aspect

Instruction No. 03/2022-23 (2022)

Instruction No. 01/2023-24 (2024)

Focus Area

Guidelines on Issuance of Summons

Guidelines for CGST field formations in maintaining ease of doing business while engaging in investigation with regular taxpayers

Main Concern

Judicious use of summons and avoiding summoning for information available online or summoning top officials without clear indications of their involvement

Ensuring uniform procedures in enforcement activities, promoting ease of doing business while undertaking investigations

Guidelines on Summons

- Summons to be issued judiciously with prior written permission from an officer not below the rank of Deputy/Assistant Commissioner- Avoid summoning senior officials in the first instance- Avoid using summons for information available online

Not the primary focus, but mentions that digital/online information on GST portal should not be called for under summons

Senior Management Involvement

Summons for senior management (CMD/MD/CEO/CFO) to be avoided unless there is clear evidence of their involvement

Does not specifically address summoning senior management, focuses on investigation procedures and coordination among CGST field formations

Documentation and Digital Information

Emphasizes not summoning for digitally/online available documents and the mandatory quoting of Document Identification Number (DIN)

Stresses not to call for digital/online information available on GST portal; digital records related to investigations should be handled according to guidelines

Coordination Among Departments

Not explicitly mentioned

Highlights the need for coordination between CGST field formations, DGGI, and state GST departments in case of overlapping investigations

Procedure for Investigation

Specific to the issuance of summons, including when and how to issue them, who should issue them, and how to handle non-compliance

Broadens to include guidelines on initiating investigations, approvals required, and handling investigations that involve multiple jurisdictions

Compliance and Grievance Redressal

Instructions meant for strict compliance, with an emphasis on procedural compliance for summons

Introduces mechanisms for grievance redressal and proactive measures to prevent complaints related to investigations

Investigation Timeline

Not specified

Investigations should conclude within one year, with emphasis on expeditious action and preventing delays

 

These instructions reflect the evolving approach of the GST Department in handling investigations, from focusing on the proper use of summons to broader guidelines aimed at improving ease of doing business and ensuring uniform enforcement practices.

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Published by

Abhishek Raja
(Practising CA)
Category GST   Report

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