It has been observed that the visits of revenue officers have started. The jurisdictional officer u/s 6(1) is ONLY supposed to come. We find both of them visit within a week of each other which may be in contravention of s 6(2). Knowledge is power an lack of knowledge can lead to unnecessary fear.
Therefore is relevant to know the related GST provisions vis. Section 67 read with Rule 139.
1. The JC or above who has reason to believe that a premise is to be visited issue an authorization in GST INS- 01 a junior officer. Post facto authorization is not valid in law. The assessee should insist on this document to be produced and take a copy of the same. This action may avoid may unofficial visits. If not in a format immediately thereafter email + RAPD of fact that it was not done as per law should be sent. There are a number of decision in Income tax on these aspects which may be relevant. However, a mere difference in opinion of revenue intimated stand of taxpayer with reasons, visit based on FAQs or Circulars among many others may not be justified. Some reasons could be:
a. Suppression of supply or part supply (part billing non-billing, billing as exempt)
b. Suppression of value in case of supply to 3rd parties.
c. Fraudulently claimed transition credit
d. Claimed excess credit than admissible or availed credit on fake invoice or indulged in circular trading.
e. Any other action with intent to evade GST. Reason to believe does not cover reason to suspect or based on gossip or rumor.
2. Any seizure of papers [ advisable not to give papers unofficially- which are promised to be returned] is to be in terms of the order in GST INS- 02. This action may lead to postponing until the time of genuine suspicion in case of roving enquiry.
3. The documents, files provided should be serially numbered (including papers within) prior to handing over and proper acknowledgment taken at the time of seizure and not later on a subsequent visit to the GST office. This acknowledgment should be retained for being able to get back all documents. The assessee has the right to take copies of any of the documents sought to be seized in the presence of the officer in normal course. This may take time but can be insisted on as once it is in the custody of the revenue getting copies is a nightmare and may not be possible which can lead to disruption of the business itself.
4. If nothing is seized it may be advisable that the entire sequence of the visit and questions asked and reasons and documents provided for seeing are noted and a letter on support for the enquiry sent to the visiting officer with copy to JC.
5. Surprisingly unlike the earlier law (Sec 22 of the CEA) there is no provision to penalize the errant officer (who have been there is very large numbers especially in the State) for wrongdoing or excesses. This is a very important safeguard which needs to be there in the Act which seems to have been deliberately left out. In the absence of this, the inspector raj may raise its hydra head. Trade and industry associations should highlight and insist for check and balances on officers to be available in the law and not by way of executive instructions which can change anytime. In India being a democratic country only the authority prescribed by law can be exercised by the officers.
This short article is an attempt to arm the unwary and provide some protection for the compliant small and big taxpayers.
The author can also be reached at madhukar@hiregange.com
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