In a major relief for the industry and GST taxpayers in the country, the government has decided to send any GST demand notices to the taxpayers, only once there is approval from the North Block.

According to official sources, “The Directorate General of GST Intelligence (DGGI) can not send any tax demand notices where it is an interpretation or a classification matter, without the approval of the policy wing under the Central Board of Indirect Taxes and Customs (CBIC).”

DGGI is the central intelligence agency of CBIC, which keeps a close vigil on tax dues, tax unpaid, tax evasion and misreporting of taxes, under the GST regime.

The investigative arm was often accused of sending notices to taxpayers, and industry, where the industry held a different view and the intelligence arm held a different assessment of taxes, leading to stuck payments, delays in taxes and piling up of cases.

Sources told CNBC-TV18, “The move is aimed at reducing litigation, deploying the intelligence resources in the right direction and where they are needed the most, thus bringing in ease of living and ease of doing business under the GST regime.”

“Through this, the DGGI resources will be used more efficiently and will lead to meaningful conclusions to cases and demand notices,” the sources said.

Sources added, “The DGGI will continue to conduct investigations, checking tax leakages and, as and when it detects an evasion, it will inform CBIC … It will be then upon CBIC on whether it wants to announce corrective clarifications to avoid discrepancies and loopholes in the law.”

Apart from this, the recent 53rd GST Council meeting has approved a series of clarifications, which has given a breather to several sectors including foreign shipping lines, MNCs, foreign airlines, start-ups, etc, operating in the country, which were embroiled with a series of DGGI notices.

Sources said, “The recent notifications have put to rest notices sent to several sectors, making them null and void, putting them to rest on ‘as is, where is, basis.”

For instance, foreign shipping lines were facing notices worth about ₹1 lakh crore, foreign airlines were facing notices worth ₹15,000 crore and MNCs were contesting about 300 notices worth ₹4000 crore, the sources said.

“All these cases will now be concluded in the favour of the industry based on these clarifications approved by the GST council,” they added.

Several cases pertaining to the issuing of ESOPs, corporate guarantees, etc, will also get settled, the sources said.

Source: CNBC TV 18