NEW CBIC GUIDELINES FOR GST INVESTIGATIONS

[Dr. Sanjiv Agarwal]

CBIC has issued Guidelines for CGST field formations in maintaining ease of doing business while engaging in investigation with regular taxpayers vide Instruction No. 01/2023-24 GST (Inv.) dated 30.03.2024  issued by Ministry of Finance, Department of Revenue. These guidelines shall be followed in the CGST Zones while engaging in investigation, subject to legal provisions or instructions.

The following are the salient features of the investigations related guidelines:

• The Principal Commissioner shall be responsible for developing and approving any intelligence, conducting search, and completing investigation in a case and the relevant subsequent action, including in the divisional formations, etc.
• For information / intelligence inter CGST field formation, it shall be forwarded by the Principal Commissioner to the concerned CGST field formation or DGGI, as the case may be.
• Each investigation must be initiated only after the approval of the Principal Commissioner.
• However, in the following situations, the prior written approval of the Zonal Principal Chief Commissioner shall be required if investigation is to be initiated and action to be taken in a case falling under any of the following four categories, namely case involving –

1. matters of interpretation seeking to levy tax/ duty on any sector/commodity/ service for the first time, whether in Central Excise or GST; or
2. big industrial house and major multinational corporations; or
3. sensitive matters or matters with national implications; or
4. matters which are already before GST Council.

• In cases where the Principal Commissioner has initiated an investigation with respect to a GSTIN in its jurisdiction, and the issue is relevant to other taxpayers’ GSTINs registered (under multiple PANs) across various CGST jurisdictions. In this scenario, the Principal Commissioner shall within 30 days of initiation of investigation take either of the following two actions with the approval of zonal Principal Chief Commissioner –

1. If description of GSTINs or similar entity types involved (or likely to be involved) across various jurisdictions related to the issue or topic is available, the self-contained reference be shared with each concerned Zone or all the Zones.
2. In other situations, Pr. DG DGGI shall be requested to issue suitable alert.

• In initiating investigation with respect to a listed company or PSU or Corporation or Govt Dept./agency or an Authority established by law, or seeking details (that are record-based and/or are reflected in statutory books of account or filings) from them, the practice to be adopted by the CGST field formation should be of initially addressing official letters (instead of summons) to the designated officer of such entity (detailing the reasons for investigation, and the legal provisions therefor) and requesting the submission of the relevant specified details in a reasonable time period which should be mentioned in the letter.
• In a letter issued for seeking information/documents from regular taxpayer, the reference can be to inquiry "with respect to” or “in connection with” that entity.
• The letter/summons should disclose the specific nature of the inquiry being initiated/undertaken. The 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.
• Information available digitally/online on GST portal should not be called for under letter/summons from a regular taxpayer.
• A letter or summons should not be used as a means to seek information filled in formats or proforma (specified by investigation).
• The summons in conduct of investigation must not convey requests outside the scope defined for a summons.
• Addressing letter/summons with context or content akin to a fishing inquiry is not acceptable.
• 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.
• In issuing summons, the norm shall be of prior reasoned approval (of officer not below Deputy /Assistant Commissioner level) of the content of the summons to be printed by the summoning officer, including in terms of what is being sought and the time frame to be provided being reasonable for its compliance.
• Before summoning any information or documents from a regular taxpayer, the relevancy and propriety of what is being sought must be recorded (on e-file), ensuring that it is holistic and result of preparation, and also so as not to have repeated issuance of summons or seeking piecemeal information.
• Scanned copy of a statement (recorded under summons) be uploaded in the same e-office file in which approval was obtained to issue summons.
• The e-file should be submitted for information to Addl./Jt. Commissioner in not more than 4 working days from date of statement, completion of search/inspection. 
• An investigation initiated must reach the earliest conclusion which is not more than one year.
• Show cause notice should not be delayed after conclusion of investigation.
• Conclusion of investigation may also take the form of recording that investigation is not being pursued further as nothing objectionable was found in terms of matter investigated.
• The Principal Commissioner is expected to be proactive in a manner such that prevents complaints from arising in respect of the investigation and related work being undertaken within his jurisdiction.

The above guidelines will ensure a uniform procedure in undertaking enforcement activities, with or involving regular taxpayers, which incorporates aspects related to the ease of doing business.