Legal firm says GST litigation cases continue to rise
PETALING JAYA:
The goods and services tax (GST) tribunal held that the Customs Department cannot widen or narrow the scope of GST legislation or attach additional conditions through the issuance of guidelines or its director-general’s (DG) decisions.
“As such, if the DG seeks to attach additional stipulations to the GST Act and or its accompanying orders, it is illegal, and the DG is prohibited from doing so,” according to Wong & Partners, a legal firm, in its GST update report,
The firm pointed out that the tribunal has effectively outlined the parameters of the DG’s powers: whilst the DG has extensive powers to enforce the GST Act, the DG may not exceed that power by expanding on or adding on to the stipulations within the GST Act. “Only the Parliament or the Finance Minister (in exercising his delegated powers) have the power to do so.
“Further, the GST Tribunal had also confirmed that DG’s decisions do not have the force of law and only provisions under GST legislation are legally enforceable,” it pointed out
In retrospect, since the implementation of the GST almost two years ago, issues that surfaced in the early stages still remain with respect to the enforcement by the Customs, resulting in significant challenges for a number of taxpayers to comply with the GST requirements.
While Customs has made some effort to address some of the issues faced by taxpayers, the number of cases litigated on GST issues continues to rise.
Many of these issues pertain to differing interpretations of the GST Act, the role of guidelines and DG decisions issued by Customs, in aiding the interpretation of the law.
Many aspects and details relating to the GST regime are not provided for expressly under the GST Act or subsidiary legislation, but are instead found in these various Guidelines and DG’s decisions.
“The position taken by the GST tribunal on this matter is a much welcomed one. In light of its recent decisions, the GST Tribunal has established that it would be illegal for the DG to impose additional requirements outside the express provisions of the GST Act and the GST orders,” said the firm.