The Goods and Services Tax (GST) Council has said only the so-called jurisdictional tax authorities must issue recurring show-cause notices to those under investigation even if the initial one is issued by another authority, which could be central or state officials.
The clarification eases the compliance burden for both the tax authorities as well as the taxpayers. The GST, implemented in July 2017, faced several initial hiccups as businesses adapted to greater compliance requirements for a nation-wide uniform levy. The tax authorities have also taken measures to ease the burden on taxpayers.
While a taxpayer is open to enforcement action by both the central and state tax authorities, repeated show-cause notices should be issued by the actual jurisdictional tax authorities administering the taxpayer, the council said in an office memorandum dated October 19.
The office memorandum relies on the deliberations of the GST Council's 47th meeting.
If the authority which has taken the enforcement action but does not administer the taxpayer is mandated to issue recurring show-cause notices also, it will put unnecessary burden on the investigating authority to keep a track of the matter as well as collect records.
“Accordingly, the recurring show-cause notices may be issued by the concerned jurisdictional tax authorities administering the taxpayer, i.e. even if the investigation is conducted by central tax authorities and initial show-cause notice is issued by them, the recurring show-cause notice may be issued only by the jurisdictional tax authority administering the taxpayer,” the GST Council said.
“If the such jurisdictional tax authority is state tax, the recurring show cause notice may be issued by the concerned state tax authority.”
The GST Council had met on June 28 and 29.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!