Table of Contents
GSTN Guidelines issued for prosecution in GST- Key Points
The Central Board of Indirect Taxes & Customs has issued instructions for the Goods and Services Tax investigation officers which are to be followed while launching any prosecution proceedings exhibiting criminal charges against any person.
- Central Board of Indirect Taxes & Customs acknowledged that prosecution has serious repercussions for the accused.
- Standard of proof needed in a criminal prosecution is higher. Case has to be established beyond reasonable doubt.
- Evidence collected against the person should be adequate to establish that person had fraudulent intention or guilty mind for committing offence.
- 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.
- In the case of Public L.T.d. Companies, prosecution should not be launched indiscriminately against all the Company Directors.
- GSTN Guidelines should be restricted to only persons who oversaw day to day operations of the company & have taken active part in committing the tax evasion etc, or had connived at it.
- Central Board of Indirect Taxes & Customs continues to maintain its stand that decision in adjudication proceedings is not necessary before starting criminal prosecution. Adjudication proceedings and criminal proceedings can be launched simultaneously.
- Prosecution should generally be launched where tax evaded amount is exceeds than INR 5 Cr. But, in cases where arrest or in cases of habitual evaders have been made during course of investigation, prosecution could be started irrespective of monetary limit.
- Habitual evader is defined as “ a company / taxpayer who is involved in two or more cases of confirmed demand (at First adjudication level or above at appellate levels ) of tax evasion involving fraud , suppression of facts , in the past two years such that the total tax evaded exceeds than INR 5 Cr. ”
- Appropriate efforts required to be made to submit prosecution complaint in court within sixty days of arrest.
Instruction No. 04/2022 -23 (GST Registration ) issued on 01.09.2022
RJA Comments: -
This is a welcoming initiative by Central Board of Indirect Taxes & CustomsU/s 132 of the Central Goods and Services Tax Act, 2017. The above instructions are binding on the Directorate General of GST Intelligence officers, & Central Tax officers all zones. Via above Goods and Services Tax Network guideline in few areas is not in line with settled jurisprudence in erstwhile laws and Code of Criminal Procedure (CrPC), GST dept’s actions should now be in consistence with these GSTN Guidelines.
