Summary: A GST Assessing Officer is legally authorized to conduct test purchases to ensure compliance with tax invoice regulations. According to Section 67(12) of the Central Goods and Services Tax (CGST) Act, 2017, a Commissioner or an officer authorized by them can authorize a person to purchase goods or services from a business to check if proper tax invoices or bills of supply are being issued. After completing this check, the officer can return the goods and demand the cancellation of the bill. The section explicitly states that the business owner or person in charge must then refund the amount paid for the goods and cancel the previously issued tax invoice or bill. This power is a specific provision within the broader framework of GST officers’ general and special powers, which include inspection, search, seizure, and arrest for major offenses. This provision provides a legal basis for officers to verify a business’s invoicing practices without requiring a full-scale inspection or search, which are powers granted to officers of a higher rank (Joint Commissioner and above) who have reason to believe that tax evasion is occurring.
QUESTION & ANSWER SERIES -POWER OF OFFICERS UNDER GST,2017
QUESTION: A GST Assessing Officer authorised by the Commissioner enters a shop in bazaar and purchases some goods and demands for invoice of the goods he purchased. He checks the invoice, for its correctness and then returns the goods and asks for cancellation of the bill. Whether an officer has power to purchase the goods, just to check issue of tax invoice ? Whether he can demand cancellation of bill and return of amount for such purchases ?
APPLICABLE PROVISIONS:
General Powers of GST officer under GST Act ,2017Here’s a summary of situations where the GST officer might have to use his or her General powers under Section 155 of the CGST Act: 1. Any goods and services are provided without the need for an invoice. 2. Intentionally declares the supply’s description incorrectly on the invoice in order to avoid paying taxes. 3. To claim ITC or a refund without the actual supply of goods and services by issuing e-invoices or bills (shipping or air-way). 4. Collects any sum as tax but fails to deposit it to the credit of the proper government within three months of the date on which payment is due. 5. Takes use of or makes use of Input Tax Credit without receiving goods or services in full or in part. The above-mentioned rights are the general powers bestowed on GST officers by the GST Act, and there are also additional powers conferred on appropriate officers by the GST Act. However, it is critical that GST officers exercise these general powers with caution. Special Powers of GST Officer under GST Act ,2017INSPECTION AUTHORITYAny proper officer, not below the rank of Joint Commissioner, may be authorized by the GST officer to inspect any taxable person’s, transporter’s, business owner’s, warehouse operators, or other person’s business place. However, the person reviewing the above must have written permission from the officer and must hold the level of Joint Commissioner or higher. They have the authority to inspect their place of business, goods, and supplies, as well as transportation. SEARCH AND SEIZURE POWERSuppose he feels that any items, documents, or information relevant to the proceedings are hidden or not disclosed after seeking such information. In that case, the GST officer not below the rank of Joint Commissioner has the authority to search and seize such commodities. It may also empower the appropriate police to search and seize such objects, papers, and information at any time and in any location. The GST officials have the authority to search and seize any commodities, documents, or anything that will aid in legal actions. It should be remembered that any officer who does not have the level of Joint Commissioner can only conduct a search and seizure with the permission of a higher-ranking officer. ARRESTING POWERGST officials have the authority to arrest those who do not follow the norms of law, or if a taxpayer commits an offense, they have the authority to request all documentation and evidence of goods/services if necessary. Assume the Commissioner has reasonable grounds to think that a taxpayer has committed a violation. In that case, he has the authority to order the arrest of that person by any appropriate officer. The detained person must be informed of the reason for his detention and must appear before a magistrate within 24 hours of his arrest. SECTION 69 OF CGST ACT, 2017 – Power to arrest. (1) Where the Commissioner has reasons to believe that a person has committed any offence specified in clause (a) or clause (b) or clause (c) or clause (d) of sub-section (1) of section 132 which is punishable under clause (i) or (ii) of sub-section (1), or sub-section (2) of the said section, he may, by order, authorise any officer of central tax to arrest such person.” Offenses u/s 132 where arrest provisions become applicable- 1. A taxable person supplies any goods/services without any invoice or issues a false invoice. 2. He issues any invoice or bill without supply of goods/services in violation of the provisions of GST. 3. He collects any GST but does not submit it to the government within 3 months. 4. Even if he collects any GST in contravention of provisions, he still has to deposit it to the government within 3 months. Failure to do so will be an offense under GST. 5. He has already been convicted of an earlier u/s 132 i.e., this is his 2nd offense. On reading section 132 with arrest provisions, it essentially stands that a person can be arrested only where the tax evasion is more than 100 lakhs rupees or where a person has earlier been convicted of an offence u/s 132. PLEASE NOTE THAT : The 48th GST Council meeting has recommended various measures to decriminalise the GST offences such as raising the minimum threshold of tax amount for launching prosecution under GST from one crore to two crore, except for the offence of issuance of invoices without supply of goods or services or both, reducing the compounding amount from the present range of 50 to 150% of the tax amount to the range of 25 to 100%, and decriminalising certain offences specified under Section 132 of the CGST Act, 2017, such as obstructing or preventing any officer from doing his duties, deliberate tempering of material evidence and failure to supply information. Power to Compel People to Testify and Produce DocumentsThe commission may empower any GST officer acting on his behalf to summon any individual whose presence is required to provide testimony, produce a document, or otherwise participate in any proceedings or inquiries that such officer is conducting for any of the purposes of this Act. Powers of RevisionThe Chief Commissioner or a Commissioner acting on his initiative or based on information obtained by him may request and inspect any proceeding’s record. If he believes a judgment or order made under this Act by a subordinate official is incorrect, he may issue an order of inquiry or alter or revise the decision or orders. However, such taxpayers will be given an opportunity to be heard before any action is taken. Power to Inspect Place of BusinessThe GST officer approved by the CGST’s Additional/Joint Commissioner has access to any registered taxable person’s place of business. GST officials are given the authority to conduct audits, examinations, and checks in order to defend revenue interests. As a result, the GST officer has the authority to inspect books of accounts, computers, papers, computer programs or software, and other items he deems essential at such locations. The Authority to Empower Officers to Enforce the LawGST officers have a variety of authorities to ensure that GST is correctly implemented in India and that tax fraud is reduced. However, these powers are occasionally abused, and in light of this, we can conclude that absolute power in anyone’s hands corrupts him completely. The Ability to Impose a PenaltyIf the proper officer determines that the person is subject to a penalty that is not covered under the Act. The proper officer may issue an order levying the penalty after providing the person an opportunity to be heard under the CGST Act, 2017. Ability to Compile DataIf the Commissioner authorizes it, the GST officer may collect data on his behalf if he believes it is required for the administration of the Act. The authority may demand that all affected taxpayers provide all GST-related information, such as GST returns. If the Commissioner authorizes it, the GST officer may collect data on his behalf if he believes it is required for the administration of the Act. The authorized person may demand that all affected taxpayers provide all GST-related information, such as GST returns. The above-mentioned rights are the additional powers bestowed on GST officers by the GST Act. However, it is critical that GST officers exercise these additional powers with caution. |
ANSWER:
As per section 67(12) of the Central Goods and Services Tax Act, 2017, the Commissioner or an officer authorized by him may cause purchase of any goods or services or both by any person authorized by him from the business premises of any taxable person, to check the issue of tax invoices or bills of supply by such taxable person, and on return of goods so purchased by such officer, such taxable person or any person in charge of the business premises shall refund the amount so paid towards the goods after cancelling any tax invoice or bill of supply issued earlier.
Accordingly, the GST Officer is empowered to make test purchases to check invoices or bills and bills raised for such test purchases have to be cancelled and the amount paid by the officer have to be returned.
| SECTION 67(1) OF CGST ACT, 2017
Where the proper officer, not below the rank of Joint Commissioner, has reasons to believe that–– (a) a taxable person has suppressed any transaction relating to supply of goods or services or both or the stock of goods in hand, or has claimed input tax credit in excess of his entitlement under this Act or has indulged in contravention of any of the provisions of this Act or the rules made thereunder to evade tax under this Act; or (b) any person engaged in the business of transporting goods or an owner or operator of a warehouse or a godown or any other place is keeping goods which have escaped payment of tax or has kept his accounts or goods in such a manner as is likely to cause evasion of tax payable under this Act, he may authorise in writing any other officer of central tax to inspect any places of business of the taxable person or the persons engaged in the business of transporting goods or the owner or the operator of warehouse or godown or any other place. SECTION 67(12) The Commissioner or an officer authorised by him may cause purchase of any goods or services or both by any person authorised by him from the business premises of any taxable person, to check the issue of tax invoices or bills of supply by such taxable person, and on return of goods so purchased by such officer, such taxable person or any person in charge of the business premises shall refund the amount so paid towards the goods after cancelling any tax invoice or bill of supply issued earlier. |
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DISCLAIMER: the Q&A series presented here is only for sharing knowledge with the readers. The views are personal, shall not be considered as professional advice. In case of necessity do consult with professional for more clarity and understanding on subject matter.
REFERENCES:
1.https://cleartax.in/s/arrest-under-gst
2.https://www.teachoo.com/5945/1930/Section-132-CGST
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