Field officers recovering GST without notice, says industry
Field officers are recovering payments from assessees after search operations without issuing any showcause notices in several cases, industry experts have complained.
Recently, the investigation wing of GST asked the principal director general, director general, principal chief commissioners, chief commissioners to issue showcause notices so that pending fraud and evasion cases can be closed in time.
However, experts said field officers are recovering payments without issuing such notices. As such, the instruction to issue showcause notices in a timely manner is important to plug this loophole as well, besides closure of cases. “There have been a number of instances where payment is recovered from taxpayers during search and investigation, but no showcause notices are issued,” said Abhishek Rastogi, partner at Khaitan & Co.
He said taxpayers pay the amount voluntarily under DRC 03 challan and specifically mention in the footnote that the taxes are paid “under protest”. Taxes paid under protest are eligible for refund at any point of time, he added.
In the recent instruction, the GST investigation wing asked the field formation to issue showcause notices well before the last date, so that the probe can be completed. It said showcause notices were issued only in a few cases booked for tax evasion and fraudulent input tax credit claim for 2017-18 (Julymarch), 2018-19 and 2019-20.
Cases have to be closed within 3-5 years of the deadline of filing returns in cases of tax evasion. These have to see closure within 3-5 years of fraudulent claims of refunds, said Aditya Singhania, partner, Singhania GST Consultancy.
He said instructions to complete investigations, issuance of SCNS and its timely adjudication seem to come at the point in time when the deadline of filing annual returns for the initial three years is over. The deadline for filing returns for these years falls between February 2020 and March, 2021.
"This demands preparedness of the taxpayers to ensure complete reconciliations of their returns filed vis-a-vis books of accounts, so that differences if found can be smoothly substantiated," he said.