The Central Board of Indirect Taxes and Customs (CBIC) issued Instruction No. 03/2024-GST on August 14, 2024, providing guidelines for CGST audit matters. This instruction references para 2(g) of the earlier Instruction No. 01/2023-24-GST (Inv.) dated March 30, 2024, which emphasizes maintaining ease of doing business during investigations. Specifically, it advises that when a CGST Zone faces an issue where different interpretations of the CGST Act, rules, or notifications are involved, leading to potential litigation, the Zonal Chief Commissioner should refer the matter to the relevant policy wing of the Board. This step is recommended before concluding the investigation and issuing a show cause notice, to promote uniformity and minimize disputes. The Board now extends this guideline to apply during the audit process, urging CGST Audit Commissioners to follow the procedure in ongoing and future audits. This approach aims to ensure consistency in tax enforcement and reduce unnecessary litigation across the CGST framework.
Instruction No. 03/2024-GST
F.No. CST/INV/Instructions/2023-24
Government of India
Ministry of Finance
Department of Revenue
(Central Board of Indirect Taxes and Customs)
New Delhi, Dated 14th August, 2024.
To,
All Pr. Chief Commissioners/Chief Commissioners, CGST Zones/ CGST & Customs Zones,
All Principal Directors General/Directors General under CBIC,
All Pr. Commissioners/Commissioners, CX & COST (incl. Audit)
NI adorn/Sir,
Subject: Applying para 2(g) of Instruction No. 01/2023-24-GST (Inv.) dated 30-03-2024 in Audit matters- reg.
The undersigned is directed to say that the Board’s Instruction No. 01/2023-24-GST (Inv.) dated 30-03-2024 has been issued providing guidelines for maintaining ease of doing business while engaging in investigation with regular taxpayers. The para 2(g) of said Instruction is
“The scenario may arise in a CGST Zone where an issue investigated by one of the (Pr.) Commissioners is based on an interpretation of CGST Act/ Rules, notifications, circulars etc, and it is in the direction of proposing non-payment or short payment of tax, however, the background is that the taxpayer(s) is/are following, or have followed, a prevalent trade practice based on particular interpretation on that issue in the sector/industry. This scenario results in more than one interpretation and likelihood of litigation, change in practice etc.
In such cases, it is desirable that the zonal (Pr.) Chief Commissioner make a self-contained reference to the relevant policy wing of the Board i.e. the GST Policy or TRU. The endeavor, to make such reference before concluding investigation, and as much in advance, as is feasible, of the earliest due date for issuing of show cause notice, may be use/id in promoting uniformity or avoiding litigation if the matter, after being processed, is amongst those that also gets placed before the GST Council.”
2. The Board desires that during the process of audit, wherever the relevant CGST Audit (Pr.) Commissioner comes across the scenario described above, the Zonal (Pr.) Chief Commissioner should follow the procedure and endeavor prescribed by Board in para 2(g) of above Instruction. This applies also to on-going audit proceedings,
Hindi version to follow.
Yours faithfully,
(Vijay Mohan Jain)
Commissioner, GST-Investigation, CBIC
