New Delhi: In order to prevent unnecessary pressure on GST payers for early recovery of dues, the Central Board of Indirect Taxes and Customs (CBIC) has issued instructions to senior officials. Recovery actions Only in rare cases promptly and that too after clearly stating the reasons.
The law allows it Central GST Authority In case the outstanding amount is not paid even after passing of the order, recovery will be started after three months.Only in exceptional circumstances can recovery be initiated earlier. But as “early action” has become the norm, increasing pressure on taxpayers, the CBIC has now said that if recovery is to be initiated before three months, a principal commissioner or commissioner rank officer must order action and give specific reasons.
“Such reasons may include the higher risk to the revenue in waiting until the completion of the three-month period, as it is feared that the concerned taxable person may close the account.” business operations The directions issued on Thursday said that mechanical issuance of demand should be avoided. The directions said that the demand cannot be raised in the near future, or because of the likelihood of default by the taxable person on account of his deteriorating financial position or imminent insolvency, or because of the likelihood of initiation of proceedings under the Insolvency and Bankruptcy Act.
The order should be based on credible evidence and issued after considering the financial health, state of the business, credibility of the taxpayer, infrastructure and strike a balance between the interests of the tax authorities and ease of doing business.
Abhishek Jain, Partner and Head, Indirect Tax, KPMG, said, “Such clear instructions from the government are welcome and will help reduce unnecessary hassles faced by businesses with regard to tax collection. I hope these guidelines will be implemented and followed in letter and spirit by the jurisdictional authorities.”
The law allows it Central GST Authority In case the outstanding amount is not paid even after passing of the order, recovery will be started after three months.Only in exceptional circumstances can recovery be initiated earlier. But as “early action” has become the norm, increasing pressure on taxpayers, the CBIC has now said that if recovery is to be initiated before three months, a principal commissioner or commissioner rank officer must order action and give specific reasons.
“Such reasons may include the higher risk to the revenue in waiting until the completion of the three-month period, as it is feared that the concerned taxable person may close the account.” business operations The directions issued on Thursday said that mechanical issuance of demand should be avoided. The directions said that the demand cannot be raised in the near future, or because of the likelihood of default by the taxable person on account of his deteriorating financial position or imminent insolvency, or because of the likelihood of initiation of proceedings under the Insolvency and Bankruptcy Act.
The order should be based on credible evidence and issued after considering the financial health, state of the business, credibility of the taxpayer, infrastructure and strike a balance between the interests of the tax authorities and ease of doing business.
Abhishek Jain, Partner and Head, Indirect Tax, KPMG, said, “Such clear instructions from the government are welcome and will help reduce unnecessary hassles faced by businesses with regard to tax collection. I hope these guidelines will be implemented and followed in letter and spirit by the jurisdictional authorities.”