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Arjuna (Fictional Character): Krishna, what is the recent CGST instruction brought by CBIC for Arrest and Bail in relation to offences punishable under The CGST Act, 2017?

Krishna (Fictional Character): Arjuna, on 17th August 2022 Instruction No. 02/2022-23 was issued following the judgement of the Supreme Court in Siddharth v. The State of Uttar Pradesh and Amr, with respect to arrest and bail. The Guidelines has also added that arrest should not be made in cases where is difference in interpretation of law.

Arjuna (Fictional Character): Krishna, When arrest can be made in GST Act?

Krishna (Fictional Character): Arjuna, An arrest can be made in GST Act in the following cases:

1. Supply of any goods or services or both without issue of any invoice with the intention to evade tax;

2. Issuance of any invoice or bill without supply of goods or services or both leading to wrongful availment or utilisation of input tax credit or refund of tax;

3. Availment of input tax credit using the invoice or bill referred in 2nd point or fraudulent availment of input tax credit without any invoice or bill

4. Collection of any amount as tax but failure to pay the same to the Government beyond a period of three months from the date on which such payment becomes due;

Provided where the amount of tax evaded or the amount of input tax credit wrongly availed or utilised or the amount of refund wrongly taken

a. exceeds five crore rupees imprisonment is up to five years and with fine; or

b. exceeds two crore rupees but does not exceed five crore rupees imprisonment is up to three years and with fine.

Arjuna (Fictional Character): Krishna, what is the procedure for arrest?

Krishna (Fictional Character): Arjuna, the officer has to issue an arrest memo which should contain the following particulars-

1. it should indicate relevant section of the CGST Act, 2017 or other laws attracted to the case

2. the grounds of arrest,

3. the date and time of arrest should also be mentioned in arrest memo.

4. A nominated or authorized person of the arrested person should be informed immediately and this fact shall be mentioned in the arrest memo.

5. The arrest memo should be given to the person arrested under proper acknowledgment. Separate arrest memo has to be made and provided to each individual/arrested person.

6. Generation and quoting of Document Identification Number (DIN) is mandatory.

Arjuna (Fictional Character): Krishna, what should one learn from this?

Krishna (Fictional Character): Arjuna, there was a rise in the arrests being made in GST offences, hence there was a need for directions to be issued by CBIC for their officers. This is a welcome clarification for the taxpayers and this should to some extent reduce the harassment which was caused to the taxpayers.

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1. Central Council Member of ICAI. 2. Vice-Chairman of WIRC of ICAI for the period 2015-2021. 3. Youngest Chairman of Aurangabad Branch of WIRC of ICAI in 2002. 4. Author of Popular Tax articles series based on Krishna and Arjuna conversation i.e “KARNEETI” published in Lokmat on every View Full Profile

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