GST Instruction 03/2024 dated 14.08.2024!

Instruction No. 01/2023-24-GST was issued by CBIC on 30^th March 2024 to provide guidelines for CGST field formations in maintaining ease of doing business while engaging in investigation with regular taxpayers. Uniform guidelines were issued to incorporate aspects related to the ease of doing business. 

Now, CBIC has issued Instruction No. 03/2024-GST to provide clarity while applying para 2(g) of Instruction No. 01/2023-24 in audit matters.

Let's understand the provisions!

Para 2(g) of Instruction No. 01/2023-24 dated 30^th March, 2024

“The scenario may arise in a CGST Zone where an issue investigated by one of the (Pr.) Commissioners is based on an interpretation of CGST Act/ Rules, notifications, circulars, etc, and it is in the direction of proposing non-payment or short payment of tax, however, the background is that the taxpayer(s) is/are following, or have followed, a prevalent trade practice based on particular interpretation on that issue in the sector/industry. This scenario results in more than one interpretation and likelihood of litigation, change in practice, etc.

In such cases, it is desirable that the zonal (Pr.) The Chief Commissioner makes a self-contained reference to the relevant policy wing of the Board i.e. the GST Policy or TRU. The endeavour, to make such reference before concluding the investigation, and as much in advance, as is feasible, of the earliest due date for issuing of show cause notice, may be useful in promoting uniformity or avoiding litigation if the matter, after being processed, is amongst those that also gets placed before the GST Council.”

Instruction No. 03/2024-GST dated 14^th August 2024

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

DEPARTMENT OF REVENUE

(CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS)

F. No. GST/INV/Instructions/2023-24

New Delhi: 14.08.2024

Instruction No. 03/2024-GST

To,

All Pr. Chief Commissioners/Chief Commissioners, CGST Zones/ CGST & Customs Zones,

All Principal Directors General/Directors General under CBIC,

All Pr. Commissioners/Commissioners, CX & CGST (incl. Audit)

Subject: Applying para 2(g) of Instruction No. 01/2023-24-GST (Inv.) dt. 30-3-2024 in Audit matters- reg.

The undersigned is directed to say that the Board's Instruction No. 01/2023-24-GST (Inv.) dated 30-03-2024 has been issued providing guidelines for maintaining ease of doing business while engaging in investigation with regular taxpayers. The para 2(g) of said Instruction is -

"The scenario may arise in a CGST Zone where an issue investigated by one of the (Pr.) Commissioners is based on an interpretation of CGST Act/ Rules, notifications, circulars, etc, and it is in the direction of proposing non-payment or short payment of tax, however, the background is that the taxpayer(s) is/are following, or have followed, a prevalent trade practice based on particular interpretation on that issue in the sector/industry. This scenario results in more than one interpretation and likelihood of litigation, change in practice, etc.

In such cases, it is desirable that the zonal (Pr.) The Chief Commissioner makes a self-contained reference to the relevant policy wing of the Board i.e. the GST Policy or TRU. The endeavor, to make such reference before concluding the investigation, and as much in advance, as is feasible, of the earliest due date for issuing of show cause notice, may be useful in promoting uniformity or avoiding litigation if the matter, after being processed, is amongst those that also gets placed before the GST Council."

2. The Board desires that during the process of audit, wherever the relevant CGST Audit (Pr.) Commissioner comes across the scenario described above, the Zonal (Pr.) Chief Commissioner should follow the procedure and endeavor prescribed by the Board in para 2(g) of the above Instruction. This applies also to ongoing audit proceedings.

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(Vijay Mohan Jain)

Commissioner, GST-Investigation, CBIC

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Key changes

The key point of this GST instruction is to ensure consistency and avoid unnecessary litigation during the audit process. It directs CGST Audit Commissioners to refer cases involving complex interpretations of GST laws, where a prevalent trade practice may lead to different interpretations, to the relevant policy wing of the Board before concluding an investigation. This approach aims to promote uniformity and minimize disputes by seeking guidance in advance, particularly in cases that might be presented to the GST Council. This applied to ongoing audits as well.

Conclusion

The issuance of Instruction No. 03/2024-GST underscores the CBIC's commitment to ensuring clarity and consistency in the application of GST laws, particularly during the audit process. By mandating a referral to the relevant policy wing in cases of complex interpretations, the instruction seeks to prevent unnecessary litigation and promote uniformity across CGST Zones. This proactive approach not only aligns with the broader goal of maintaining ease of doing business but also ensures that taxpayers are treated fairly and equitably, even in ongoing audits. As the GST landscape continues to evolve, such measures are crucial in fostering a stable and predictable tax environment.

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