March 21, 2023

GST- Avoidance of undue harassment to taxpayers – Instructions

To avoid undue harassment to taxpayers, the GST Council and the GSTN (Goods and Services Tax Network) have issued instructions to various tax authorities and officials. Here are some key instructions:

1. Conducting inspections: Tax authorities have been advised to carry out inspections only in cases where there is specific intelligence about tax evasion or malpractice. Random inspections or those based on mere suspicion should be avoided.

2. Time limits for completion of assessments: Assessments under GST should be completed within the prescribed time limits, which are generally 3 months from the date of filing of returns. In case an extension is required, the reasons for the same should be recorded in writing.

3. Advance ruling mechanism: Taxpayers are encouraged to make use of the advance ruling mechanism, which is a provision under GST for obtaining clarity on tax liabilities in advance. Tax authorities should also ensure that advance rulings are issued within the stipulated time period of 90 days.

4. Quick refunds: Refunds under GST should be processed expeditiously to avoid any undue financial burden on taxpayers. Tax authorities should issue refunds within 60 days of receipt of refund applications, failing which interest should be paid to the taxpayer.

5. Facilitation of compliance: Tax authorities should provide necessary assistance and guidance to taxpayers in complying with GST regulations. They should also conduct regular outreach programs and awareness campaigns to help taxpayers understand the GST provisions and procedures.

6. Penalty provisions: Penalty provisions should be invoked only in cases where there is clear evidence of tax evasion or non-compliance with GST rules. The quantum of penalty should be reasonable and proportionate to the nature and extent of the violation.

7. Avoiding arrest: Arrests should be made only in cases where the tax liability exceeds Rs. 2 crore and where there is evidence of deliberate tax evasion. Taxpayers should not be arrested for minor or procedural violations.

8. Disposal of confiscated goods: Confiscated goods should be disposed of within a reasonable time period, and in accordance with the provisions of GST laws. The proceeds from the sale of confiscated goods should be deposited in the government treasury.

9. Transparency in communication: Tax authorities should communicate with taxpayers in a transparent and clear manner, and provide them with all necessary information and documents related to the proceedings. They should also maintain proper records of all communications.

10. Grievance redressal mechanism: Taxpayers should be provided with an effective grievance redressal mechanism, through which they can raise any concerns or issues related to GST compliance or enforcement. Tax authorities should ensure that grievances are resolved in a timely and effective manner.

11. Use of technology: Tax authorities should make use of technology to facilitate GST compliance and enforcement. The GSTN portal should be updated regularly, and all necessary support should be provided to taxpayers in using the portal and complying with GST requirements.

By implementing these instructions, tax authorities can ensure that the GST system is administered in a fair, transparent, and efficient manner, and that taxpayers are not subjected to undue harassment or inconvenience. This, in turn, will help boost compliance and facilitate the growth of the Indian economy.

Significance of avoiding undue harassment to taxpayers under GST

Avoidance of undue harassment to taxpayers is crucial under GST as it helps to maintain a positive and conducive environment for the taxpayers to comply with the GST provisions. The significance of avoiding undue harassment to taxpayers under GST is as follows:

1. Encourages Compliance: When taxpayers face undue harassment, they tend to avoid compliance with the GST provisions, leading to a decrease in the GST revenue collection. By avoiding undue harassment, taxpayers will be encouraged to comply with the GST provisions, leading to an increase in GST revenue.

2. Builds Trust: By avoiding undue harassment, the taxpayers will be more likely to trust the GST authorities and the GST system. This trust will help to strengthen the GST system and increase the taxpayers' willingness to comply with the GST provisions.

3. Saves Time and Money: By avoiding undue harassment, the taxpayers will not have to spend time and money on litigation and other legal procedures. The taxpayers will be able to focus on their business activities, which will lead to increased productivity.

4. Promotes Ease of Doing Business: By avoiding undue harassment, the GST authorities can create an environment that promotes ease of doing business. This will lead to an increase in investments and economic growth.

In summary, avoiding undue harassment to taxpayers is essential as it encourages compliance, builds trust, saves time and money, and promotes ease of doing business.

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