GST search operations, No coercion is used and dues are paid at all times.
It also instructed chief commissioners to take “severe disciplinary action” against officers who used force or coercion to collect the tax due amount deposited during a Search, inspection, or investigation, according to an instruction.
The Goods and Services Tax (GST) investigation wing has issued instructions stating that taxpayers can pay tax dues at any stage during the search operation, citing “alleged use of force and coercion by officers for making recovery” during search, inspection, and investigation, as well as subsequent court cases.
It also instructed chief commissioners to take “severe disciplinary action” against officers who used force or coercion to collect the tax due amount deposited during a search, inspection, or investigation, according to an instruction.
“It is clarified that there may not be any conditions that require’recovery’ of tax dues during the course of a search, inspection, or investigation.” “However, there is no ban on taxpayers making voluntary contributions based on ascertainment of their responsibility on non-payment/short payment of taxes before or at any stage of such proceedings,” the GST investigation wing stated.
It goes on to say that the tax officer shall advise taxpayers about the terms of voluntary tax payments via DRC-03.
There have been several instances where GST has been deposited into effect by summoning senior office bearers such as directors or promoters of the company. This circular tries to prevent this, however given the existence of the DRC-03 method for depositing tax, the officials may still use indirect coercion to get the assessee to pay up. There have also been instances of bank accounts being frozen, which has resulted in unnecessary hardship for the taxpayer.
“While the circular will decrease the department’s use of compulsion to obtain the tax deposited during the inquiry process,” EY India tax partner Bipin Sapra said, “considering that the officers have authority to summon and block bank accounts, any direct direction may be of little use.”
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