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GST - Tax base may be split but intelligence-based action against all, clarifies CBIC

Published: Oct 09, 2018

By TIOL News Service

NEW DELHI, OCT 09, 2018: AFTER a decision was taken to split the GST tax base between the State & Central Tax Administration, it was also decided by the GST Council that both will have powers to take intelligence-based enforcement action relating to the entire value chain. Such a decision was interpretated read with the decision to allocate taxpayers between the two, as the one which means if the Central Tax Administration books a case against an assessee allocated to the State Tax jurisdiction, such a case would be handed over to the respective State Tax Jurisdiction.

However, the CBIC has now clarified that the officers of both Central tax and State tax are authorized to initiate intelligence based enforcement action on the entire taxpayer's base irrespective of the administrative assignment of the taxpayer to any authority. The authority which initiates such action is empowered to complete the entire process of investigation, issuance of SCN, adjudication, recovery, filing of appeal etc.

If an officer of the Central tax authority initiates intelligence based enforcement action against a taxpayer administratively assigned to State tax authority, the officers of Central tax authority would not transfer the said case to its State tax counterpart and would themselves take the case to its logical conclusions.

Similar position would remain in case of intelligence based enforcement action initiated by officers of State tax authorities against a taxpayer administratively assigned to the Central tax authority.

GSTN is already making changes in the IT system in this regard.