Government against indiscriminate GST prosecution – Times of India
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NEW DELHI: The revenue department has issued detailed guidelines for prosecution under the Central GST Act and advised officials against rushing ahead with action, while suggesting that only cases of over Rs 5 lakh related to bogus invoices or problems with input tax credit should be taken up. An exception will, however, be made for habitual evaders and those who have been arrested under section 69.
The detailed instructions issued on Thursday also made it clear that in case of public limited companies, prosecution “should not be launched indiscriminately” against all the directors, but should be restricted to those who oversaw day-to-day operations and “have taken active part in committing tax evasion etc or had connived at it”.
It said that a case-to-case approach should be followed and various factors such as the quantum of tax evaded, the nature of the offence should be looked at. Officials have been told to ensure that taxpayers should be made aware of provisions, allowing payment of compounding amount and an offer for compounding should be made.
The power to sanction prosecution has been given to senior officials of the GST department. “Prosecution should not be filed merely because a demand has been confirmed in the adjudication proceedings. Prosecution should not be launched in cases of technical nature, or where additional claim of tax is based on a difference of opinion regarding interpretation of law. Further, the evidence collected should be adequate to establish beyond reasonable doubt that the person had guilty mind, knowledge of the offence, or had fraudulent intention or in any manner possessed mens-rea (criminal intent) for committing the offence,” the instructions issued said.
Officials have been asked to undertake thorough investigation and ensure that there is adequate evidence before launching prosecution.
The detailed instructions issued on Thursday also made it clear that in case of public limited companies, prosecution “should not be launched indiscriminately” against all the directors, but should be restricted to those who oversaw day-to-day operations and “have taken active part in committing tax evasion etc or had connived at it”.
It said that a case-to-case approach should be followed and various factors such as the quantum of tax evaded, the nature of the offence should be looked at. Officials have been told to ensure that taxpayers should be made aware of provisions, allowing payment of compounding amount and an offer for compounding should be made.
The power to sanction prosecution has been given to senior officials of the GST department. “Prosecution should not be filed merely because a demand has been confirmed in the adjudication proceedings. Prosecution should not be launched in cases of technical nature, or where additional claim of tax is based on a difference of opinion regarding interpretation of law. Further, the evidence collected should be adequate to establish beyond reasonable doubt that the person had guilty mind, knowledge of the offence, or had fraudulent intention or in any manner possessed mens-rea (criminal intent) for committing the offence,” the instructions issued said.
Officials have been asked to undertake thorough investigation and ensure that there is adequate evidence before launching prosecution.
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