The Central Board of Indirect Taxes and Customs (CBIC) is examining a proposal to introduce a centralised GST audit and investigation mechanism for businesses operating across multiple States under the same Permanent Account Number (PAN). The proposed framework is aimed at improving ease of doing business by reducing duplication in audits and investigations and promoting consistency in tax administration.
According to government sources, the CBIC has constituted a working group to examine the proposed scheme, which may be introduced within the next six months. The working group is expected to submit its report this month.
Under the proposed mechanism, multi-State businesses having registrations across different States under a common PAN could be brought under the oversight of a unified Central GST authority for audit and investigation-related matters. However, the proposal is not expected to alter the existing registration framework. Each State GST registration would continue to remain legally distinct, and taxpayers would continue to undertake State-wise GST return filing and other routine compliances.
The key benefit of the proposed framework is expected to be in the area of audit and investigation. At present, a business following an identical tax position across several States may be required to respond to similar queries from different GST authorities, with each authority potentially taking a different view on the same issue. A centralised review could instead facilitate one set of submissions, a common examination of facts and greater consistency in the interpretation of tax positions.
Tax experts believe that such centralisation could significantly reduce the administrative burden on large multi-State businesses. It may also lower compliance costs by reducing repeated interactions with multiple GST authorities and provide taxpayers with greater certainty while adopting tax positions and making business decisions.
The proposed framework, if implemented, could therefore represent a significant step towards uniformity in GST administration, while retaining the existing State-wise registration and revenue-allocation structure under the GST law.
Source: Money Control
