Today taxpayers face many challenges in dealing with inquiries, notices and audits being conducted under the GST regime under CGST law which needs to be addressed by the CBIC to make audit tool assessee friendly and ensure GST assessments and adjudication simpler and fair.
Concerns in Audit / Show Cause Notices in GST
- Scope of scrutiny of returns under Section 61 viz-a-viz audit under Section 65 should not be mutually exclusive or carried out simultaneously. Many times scrutiny is conducted after audit is done and vice versa.
- Commencement and completion of audit under Section 65 should be made specific. While audit commencement is known, its completion is vague as department continues to linger on for final report for many months.
- Multiple SCNs arising out of single audit report should be avoided. In many cases, more than one SCN is issued arising out of single audit report.
- Time limit for issuing SCN based on audit should be made specific as in many cases SCN is issued after many months of audit. Also, in all audit cases, section 74 is invoked which is not correct. Should every audit lead to suppression etc and covered under section 74?
- Scope of audit findings should not be beyond interpretation drawn from Circulars or advance rulings.
- Audit team should consider CBIC Circulars and Advance Rulings in right perspective and follow its interpretation.
- Feedback from auditee may be taken by the senior officers during the course of audit itself.
- Time gap between IAR and SCN should be specified, say maximum 3 months.
Concerns in Summons Enquiries in GST
- Summons enquiry u/s 70 of CGST Act are initiated very casually and for routine enquires also, summons are issued which is not reasonable. Summons should be issued very rarely and only in cases of serious contraventions and where assessee is not co-operating.
- The attitude of officers handling summon enquiries is not assessee friendly and reflects a harsh and rude attitude.
- Waiting time of taxpayers at GST office in summons proceedings must be reduced (it takes few hours).
- Copies of statements recorded are not supplied to the person whose statement is recorded.
- On completion of inquiry, Department should issue a letter to the person from whom inquiry was conducted indicating that inquiry is complete and over.
Concerns in Show Cause Notices / Adjudication in GST
- Show cause notices are issued without much preparedness and often does not contain full and proper allegations.
- Notices are generally not accompanied by relied upon documents (RUDs) which makes the SCN’s in complete and cause delay in reply or adjudication.
- Adequate time should be given to submit reply to SCN and if required, standard time of 30 days should be further extended, on request.
- Shorter time of 3 days to 7 days for reply to be avoided.
- Sometimes, personal hearing in not provided for which is against principles of natural justice. It must be ensured and whenever requested, reasonable adjournments ought to be allowed.
- Post hearing, record of proceedings / hearing are not shared with assessee which is mandatory.
- Post hearing, order should be pronounced within a reasonable time, say, 10-30 days.
CBIC should address these issues being faced by the taxpayers on the ground. Our tax system remains litigation prone. The Government will have to address this issue with long term perspective in mind and avoid unproductive costs of litigation and its side - effects. The overall tax structure may have to be revisited to make it further streamlined and efficient.
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