Either Centre or state can initiate action for same offence, says GST Council

The Goods and Services Tax (GST) Council said enforcement action against a single offence can be initiated either by state or central tax authorities, a move aimed at preventing issuance of multiple show cause notices (SCNs) to businesses for the same offence.

In an office memorandum dated October 19, the council said a taxpayer located within a state is open to enforcement action by both authorities, but all consequential action relating to the case, including appeal, review, adjudication, rectification and revision, will be taken by the authority that had initiated the enforcement action. "Refund in such cases may, however, be granted only by jurisdictional tax authority, administering the taxpayer," said the memorandum.

In case of recurring SCNs, no fresh investigation is required, so these may be issued by only the concerned jurisdictional tax authorities administering the taxpayer, even if investigation is conducted by central tax authorities and initial SCN is issued by them.

The memorandum said it will put unnecessary burden on the investigating tax authority to keep track of subsequent practice of the taxpayer after conclusion of investigation and to collect all the data and records for issuance of recurring SCN.

The council said the move was initiated after it noticed that varied practices are being followed by the field formations regarding the issuance of recurring SCN, which was creating confusion. This was also discussed at the 47th GST Council, which then decided to come up with more clarity.

For instance, it said, there are cases where investigation has been initiated and finalised by central tax authorities in respect of the taxpayers under state tax administration and vice versa. Sometimes, the authority which initiates is also issuing recurring SCN, whereas in other cases, it is being left to the jurisdictional tax authority, which is administrating the taxpayer, to issue recurring SCN.

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"This may create confusion and may lead to a situation in which none of the authorities issue the recurring SCN in timely manner and therefore, there is a need to have a uniform practice in such matters," said the memorandum.

Businesses had flagged their concerns saying the overlapping of enforcement action by the state and the central officials was causing problems for them and adding to their compliance burden.

The Open Magazine of India by Artmotion Network (

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