Goods and Services Tax (GST) is a tax levy that has been implemented in India since July 1, 2017. GST has been introduced to create a unified taxation system in India that replaces all the previous indirect taxes like VAT, excise duty, service tax, etc.
One of the significant powers given to GST officers is the power to seize cash during search operations. A search operation is conducted to gather evidence related to tax evasion, and the cash seized is considered as evidence for tax evasion.
Let's explore in-depth the power of GST officers to seize cash during search operations.
A search operation is an essential tool used by GST officers to collect evidence relating to the tax evasion. A search operation is conducted with the prior approval of the commissioner of GST. During the search operation, the GST officers have the power to enter into any premise, inspect any books or documents, and seize any goods or documents that they believe are evidence for tax evasion.
One of the significant powers given to GST officers under the GST Act is the power to seize cash during search operations. The GST officers can seize cash if they believe that the cash is evidence of tax evasion. The GST officers can seize the cash that is found on the premises where the search is being conducted, or they can seize the cash that is being carried by the person who is being searched.
The GST officers need to have a good reason to believe that the seized cash is evidence of tax evasion. The GST officers can seize the cash that is found on the premises only if they have a reasonable belief that the cash is unaccounted for or is the result of tax evasion. Similarly, the GST officers can seize the cash that is being carried by the person only if they have a reasonable belief that the cash is unaccounted for or is the result of tax evasion.
The seized cash is considered to be evidence of tax evasion, and the burden of proof is on the person from whom the cash is seized to prove that the cash is not unaccounted for or is not the result of tax evasion.
The procedure for the seizure of cash during search operations is as follows:
1. The GST officers need to have a reasonable belief that the cash is unaccounted for or is the result of tax evasion.
2. The GST officers need to record the reasons for the seizure of cash in writing.
3. The GST officers need to provide the person from whom the cash is seized with a copy of the seizure memo.
4. The GST officers need to prepare an inventory of the seized cash in the presence of two independent witnesses who are not related to the person from whom the cash is seized.
5. The GST officers need to hand over the seized cash to the authorized officer within 24 hours of the seizure.
6. The authorized officer needs to issue a provisional attachment order within 7 days of the seizure of cash.
7. The provisional attachment order is valid for 6 months.
8. The person from whom the cash is seized can file an appeal against the provisional attachment order.
9. The final order is passed by the adjudicating authority after giving an opportunity of being heard to the person from whom the cash is seized.
The power of GST officers to seize cash during search operations is a significant tool that helps in the detection of tax evasion. The power of the GST officers to seize cash is to ensure that the tax evaders do not escape the law. The power of the GST officers to seize cash should be exercised judiciously and should not be misused. The persons from whom the cash is seized should be given a fair opportunity to prove that the seized cash is not unaccounted for or is not the result of tax evasion.
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