The CBIC has issued Instruction No. 03/2024-GST dated 14.08.2024, emphasizing the application of para 2(g) of Instruction No. 01/2023-24-GST (Inv.) dated 30-03-2024, specifically in the context of audit matters under the CGST framework.
Summary Explanation of the Directive:
- The Board's Instruction No. 01/2023-24-GST (Inv.) aims to streamline the investigation process to maintain the ease of doing business while ensuring compliance with GST laws.
- The directive covers situations where an issue investigated by a CGST Commissioner involves a particular interpretation of the CGST Act, rules, notifications, or circulars, which might lead to disputes regarding non-payment or short payment of taxes.
- This situation could arise from the taxpayer adhering to a prevalent trade practice based on their interpretation, leading to potential litigation due to differing interpretations.
Procedure Prescribed in Para 2(g):
- In such cases, before concluding the investigation, the Zonal (Pr.) Chief Commissioner is advised to make a self-contained reference to the relevant policy wing of the Board, such as the GST Policy or the Tax Research Unit (TRU).
- This reference should be made as early as possible, ideally before the earliest due date for issuing a show-cause notice, to promote uniformity in interpretation and avoid unnecessary litigation. The matter may also be considered by the GST Council if deemed significant.
Application to Audit Matters:
- The Board explicitly directs that the procedure outlined in para 2(g) should also be followed during audit processes.
- If, during an audit, the CGST Audit (Pr.) Commissioner encounters a scenario similar to the one described, the Zonal (Pr.) Chief Commissioner should follow the same process.
- This directive applies to both ongoing and future audit proceedings.
The Complete Instruction can be accessed at https://taxo.online/wp-content/uploads/2024/08/ins-gst-no-03-2024.pdf
