Written approval needed for GST Audits of Big Firms and MNCs

Source-This post on Written approval needed for GST Audits of Big Firms and MNCs is based on the article “Now, GST probe into big corporates, major MNCs needs a ‘written approval’” published in “The Hindu” on 31st March 2024.

Why in the News?

Recently, Central Board of Indirect Taxes and Customs (CBIC) has instructed Central Goods and Services Tax (CGST) officials to get written approval from zonal chief commissioners before investigating big companies, MNCs, or sensitive cases with national significance.

The directive is a set of instructions titled “Guidelines for CGST field formations in maintaining ease of doing business while engaging in investigation with regular taxpayers”.

What are the key guidelines issued by the CBIC?

1.Consideration of single-office investigation feasibility– According to the guidelines, if a taxpayer is under investigation by both state GST and Directorate General of GST Intelligence (DGGI) officers for different matters, the principal commissioner will assess whether it’s feasible for only one office to handle all the cases regarding that taxpayer.

2. Investigations deadline-The guidelines also stipulate that tax officers must complete investigations within one year of initiation.

3. Categories where prior approval required– The guidelines state that each investigation must be approved by the principal commissioner before initiation, except in the specified four categories where prior written approval from the zonal Principal Chief Commissioner is necessary to start an investigation and take action. These four cases include:

a. Interpretation seeking to impose tax/duty on any sector/commodity/service for the first time.
b. Big industrial houses and major multinational corporations.
c. Sensitive matters or those with national implications.
d. Matters already under consideration by the GST Council.

UPSC Syllabus- Indian Economy