CBIC has issued detailed instructions for cases where early recovery is required
The Central Board of Indirect Taxes and Customs (CBIC) has announced new guidelines allowing Principal Commissioners or Commissioner-level officers to initiate GST dues recovery before the standard three-month period after a demand order is served. Typically, the GST law mandates that if a taxable person fails to pay the specified amount within three months from the date of the demand order, recovery proceedings can only commence after this period.
However, in exceptional cases deemed necessary for the protection of revenue, a proper officer can request the taxable person to pay within a shorter time frame. This request must be accompanied by written reasons for the expedited payment.
Uniform Implementation Across Field Formations
The CBIC has observed that some field formations have been initiating recovery proceedings prematurely, even when the taxable person has not been instructed to pay within a shortened period. To ensure consistency in the application of the law, the CBIC has issued detailed instructions for cases where early recovery is required.
Steps for Early Recovery
1. Presentation by Jurisdictional Deputy/Assistant Commissioner:
In cases warranting early recovery, the jurisdictional Deputy or Assistant Commissioner must present the case along with the reasons for early recovery to the jurisdictional Principal Commissioner or Commissioner of Central Tax.
2. Recording of Reasons:
If the Principal Commissioner or Commissioner is satisfied with the reasons presented, they must record these reasons in writing.
3. Issuance of Directions:
Upon documenting the reasons, the Principal Commissioner or Commissioner can then issue directions to the concerned taxable person to pay the specified amount in less than three months from the date of the demand order.
Enhancing Transparency and Predictability
These guidelines aim to balance the need to safeguard revenue with the ease of doing business. By providing clear instructions and mandating proper documentation for early recovery actions, the CBIC enhances transparency and predictability in tax administration.
Encouraging State-Level Coordination
The CBIC also encourages state tax administrations to adopt similar guidelines. Such a coordinated approach would streamline tax compliance and create a fairer tax environment nationwide.
In conclusion, these measures are expected to address challenges faced by taxpayers and ensure a more consistent and fair tax administration system across the country.
Also Read: GST Collection in May 2024 Surges to ₹1.73 Lakh Cr, Marking 10% Year-on-Year Growth
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