CA RAJ KUMAR PROCEDURAL ASPECTS OF GST

OFFICER OF GST Regular Audit INSPECTION, SEARCH, SEIZURE AND ARREST

(Documents, Goods & Person)
Calling Relevant SCN/Demand Order I Where the proper officer, not below the rank of JC, has reasons to believe that––
Records, & COMMISSIONER
N
Return the same ASAP OFFICE 0---------------0 TAX not paid / Short-Paid/Erroneous Refund S (a) A taxable person has suppressed any transaction relating to supply of goods or
ITC Wrongly Availed/Utilised P services or both or the stock of goods in hand, or has claimed input tax credit in
(Audit / Special Audit May or May Not be) excess of his entitlement under this Act or has indulged in contravention of any of the
E provisions of this Act or the rules made thereunder to evade tax under this Act; or
Audit of books of account at any office (assessee/officer) C
Eligible Eligible S ADVANCE RULING AUTHORITY APPELLATE AUTHORITY
Signed Application (Period: 1 or more FY & Frequency To Be Decided) T
Person Doubts with fee Rs.5000
(ARA) (AA) OFFER : 1 OFFER : 1 (b) Any person engaged in the business of transporting goods or an owner or operator
I of a warehouse or a godown or any other place is keeping goods which have escaped
[GST-ARA: 01] INFO. /Notice 15 DAYS in advance [GST ADT- 01] O payment of tax or has kept his accounts or goods in such a manner as is likely to cause
[Located in Each State] [Located in Each State] (PAY TAX + INTEREST) PAY TAX + INTEREST + 15% Penalty N
evasion of tax payable under this Act,……… .
He may authorise in writing any other officer of central tax to inspect any places of
* Registered Person * Goods/service Assessee Facilitate Officer - & Time of SCN 3 / 6 Months in advance business of the taxable person or the persons engaged in the business of transporting
* Desirous of obtaining Registration. * Supply provide timely & correct INFO. goods or the owner or the operator of warehouse or godown or any other place……
* Nature of Supply Chief Commissioner Commissioner IN FULL & IN PART & IN PART IN FULL Note: Inspection of Goods in movement / Transit-Possible - IF Value of Goods Rs.
Appointed Appointed by SG 50,000 Plus – and the interceptor may require PIC to produce the document and will do
* Taxable Person By C.G.(JC or above rank) of CGST of SGST Time Limit of Audit: 3Months + EXT of 6 Months from:- inform to PO inform to PO so and allow the inspection of goods.
* Exemption By S.G. For Balance For Balance
* AV and ROT * Books of A/c made L
No SCN No SCN S IF J.C. or Above Rank Officer during Inspection or OTHERWISE
* RCM / TOS Available at depatt office A
OR T No Penalty SCN / Supp. SCN E (i.e. Direct reason) has reason to believe -that any contraband goods or
* Registration, ITC.
* Notification Applicability * Actual Institution of Audit E [TAX+INT+PENALTY (10% A useful Doc. – Secreted at ANY place – then search & seize - Such
I @ Assessee’s Office R or Rs. 10,000 For Bonafide] R Documents & Goods & pass an order GST INS: 02
(For Fraud 100%) C Prepare Inventory (Note: Assessee may Take Xerox).
If ARA differs Power of Officer: Seal / break or open the door/ any Almirah
REJECT THE OR ACCEPT THE On conclusion [GST ADT- 02] officer Inform Findings H
On any question . &tell the Rights & Obligation & If Necessary-SCN shall /Box/ electronic devices etc.
APPLICATION APPLICATION Within 30 Days Within 30 Days of SCN @ If any goods- practically not possible to seize then pass an order to
be issued. OFFER: 2 OFFER: 2 &
* With order then make a reference May confirm or modify Of SCN not to remove the goods or otherwise deal with the goods (except with
* With opportunity of Being heard (IF Reject) the prior permission of such officer GST INS- 03).
* Communication of order. (TAX + INTEREST) PAY: TAX + INTEREST S @ Seized document etc. will be returned after the purpose is solved
PREMISES OFFICE OF and documents which are not in use shall be returned within 30 days.
Not Paid/SHORT
* No Penalty Demand Order +PENALTY 25% E
 OF ASSESSEE ASSESSEE @ Seized goods shall be released on provisional basis after taking a
IF case is Pending / Decided @ Adjudication level. Paid/Erroneous
* CASE Close. (Tax + Penalty + (Not exceed Amount I BOND [GST INS- 03] with security or payment of tax, interest,
 IF case is Pending/Decided @ Appellate Level. ORDER OF ARA Order of A.A. Refund/False Z penalty etc. [if fails to return then security will be encashed]
(certified)
Interest) Specified in SCN) CASE Close
Within 90 DAYS of Invoice/False U @ Dummy Customer, CCP, Produced documents can also be seized.
within 90 DAYS of Making Reference/Appeal Books of A/c / R Date of seizure
Application wrong Info etc SPECIAL AUDIT: Within 30 Days
OFFER:3 E
(Written Decision) IF NO Notice is issued within 6M+6M
Need to conduct During ANY – Scrutiny/Enquiry/ then the goods shall be returned to the
Note: IF A.A. also in Doubts / differs in opinion, person.
Investigation/Other Proceedings & complexity of case PAY: TAX + INT. + 50%
NOTE then No Advance Ruling CAN be given. Value in issue, ITC not with in normal Limit. Penalty Note: After Seizure Perishable
IF Advance Ruling obtained Time Limit of : Demand Order: (CASE Close) Goods/ hazardous goods shall be
Notice dispose off /Sold.
Fraudulently=void ab initio * Order of ARA/AA on advance ruling-in writing with in 3/5 year of DD of filing of Annual Return
* Binding on Both parties AC/DC within 3/5 year of : Date of Erroneous Refund
* Applicable till No change in Law/FACTS. or With Approval of Commissioner Otherwise proceedings shall be deemed to be concluded.
* Order – Copy communication to Both - the parties. Above Officer
* Reason of arrest: done any criminal offence specified in
* Mistake Apparent from the Records can be Rectified Within 2 years in referred back cases A section 132(1) (a), (b), (c), (d) ie NO INVOICE, FALSE
ANY Party (Officer/Applicant may R
within 6 Month (SUOMOTO/on Application of ANY Notice to person for Special/Audit to be conducted by INVOICE , FALSE ITC, GST NOT PAID EVEN
file AN Appeal to Appellate Party) by ARA or AA (OPPO. If needed ) . CA/Cost Accountant as Nominated by Commissioner. R BEYOND 3 MONTHS(Rs. 2 cr plus for first time)
Authority in 30 +30 Days of order. [GST ADT- 03] File an Appeal to First Appellate E
Report Time: 90 Days + 90 Days Authority S *Power to arrest: any officer with the order of
Commissioner
Opportunity of Being heard IF Adverse Report. T
General Points: *Power to hold: - Cognizable Offence: inform grounds of
Form : GST-ARA:02, with a fees of Rs. 10,000 (with sign)
* Stay period to be excluded in computing the period. arrest and Produce before Magistrate within 24 Hrs. - Non
SCN – May be – Issued- if needed Cognizable: May Release.
Power of ARA/AA Form : GST-ARA:03, with a fees of Rs. NIL [If filed by Officer (with sign)]
* Discovery / Inspection Fees of Auditor: to be paid by Commissioner. * Fraud Charge Impose – D/o – App. Order – Assessee found honest/Bonafide then SCN – shall be treated to issue
Other Power: Co-operate (Sec 70,71,72)
* Examine on Oath as in Bonafide case. * Summons any Relevant Person to give evidence or produce doc
Note: It is Irrelevant that Tax Audit/Cost Audit etc. * Opportunities of being heard.
* Issue – Commissions *Access to registered premises for carryout
already conducted.
* Compel to Produce Books of Accounts * Adjournment 3 times (Max.) to a Party. any Audit Scrutiny Verification check & Assesse shall Co-
Special Audit Report : [GST ADT- 04]
(i.e. like power of Civil Court) * Demand order – with Reasoning and NO Double penalty for the same act. Operate.
* shall have power to regulate its own procedure. * App. Order Modify – INTEREST / Penalty also to be modified. * Police officer/Custom Officer/Railway/officers engaged in land
revenue collection/ village officers/ SGST or UTGST officer etc.
* INTEREST PAYABLE even IF NOT specified in Demand order. shall assist such GST Officer.
* Above Provisions also applicable when only INTEREST in Dispute.
* Self assessed liability as shown in return u/s 39 – direct recovery- without issuing SCN and Demand Order.

Offence CIVIL LIABILITY CRIMINAL OFFENCE Commissioner CRIMINAL LIABILITIES

SOME GENERAL NOTES RELATED TO APPEAL i.e. penalty/confiscation

1. Opportunit of being heard – shall be given. * Registration Records Return Refund Rs. 10,000
Opportunity Supreme OR * PRIOR APPROVAL of commissioner mandatory Imprisonment and COURT
Court Amount of TAX Evasion, TAX NOT Every offence is not a CRIMINAL
2. Everyorder
Every order written and descriptive & to be Communicated to concerned persons. Direct Filing FINE
No Registration. No/False/Duplicate Record False Return Fraudulently obtains Deducted /collected, Short Deducted / offence but only specified offences are * May Compound Before/After Institution of
* IF H.C. certify to go to SC (Both financial and u/s 35) collected, collected or deducted but covered under the ambit of criminal Prosecution. * Imposed By Court of Law.
3. Adjournment Maximum 3 times to a Party. * Govt. does to be paid first * not paid Note: Compounding once in lifetime in specified
ITC Invoice Information Incidental offence for which accused will be liable
for imprisonment and /or fine. cases. * Imposed only in case of
4. Grounds in Appeal @ First Appellate Authority can be taken up even if already not mentioned in Grounds of appeal. HIGH COURT (Whichever is HIGHER) * No compounding–If the person has been accused guilty mind - & such
- False ITC No/False/Under False / No Obstruct Officer, committing an offence mental state is presumed
5. No Fees For Memorandum of cross objection & Departmental Appeal.
- Wrongly Availed/ Value/invoice Information Transport/Supply/
Utilized/Distribution without supply/ during registration Store Contraband Note: Minimum Amount of compounding: by Court of Law.
6. Stay Period to be Excluded in computing the period (stay on recovery granted on filing of appeal/ pre de[posit of demand) * IF Substantial Question of Law-Involve. (ISD) Issue invoice and proceedings Goods/collect Tax or [Rs.10,000 OR 50% of TAX Involved]
* Within 180 Days + Extension with fee. Using another Amount & NOT Pay [HIGHER] * Burden of proof of non-
7. on pre-deposit: From Payment Date to Refund Date. * HC shall decide the question of law so formulated.
Interest Person’s GSTIN Even beyond 3 months Maximum Amount of Compounding: existence of gulty mind
* Heard By 2 or more Judges. * TDS /TCS : No, Less, Deduct / collect TDS but Not paid. of due date/ suppress T/O, [30,000 OR 150% of TAX] [HIGHER] is on the Accused.
* Judgement on the Basis of majority – then Refer it tampering /destroy goods or doc. [AFTER compounding = CASE END]
8. In Computing the period of limitation-Prescribed for Appeal/Application stay period to be excluded. to one or more other judges & check MAJORITY.
* Govt. dues to be paid First. * SHORT Payment of TAX or non -payment of TAX, ITC wrongly availed or utilised, Erroneous Refund. 10% / 100% of tax due
9. Communication: Order pf Authority /Tribunal /Court shall be communicated to concerned person.
[Bonafide Cases and Malafide cases] Or
10 of Departmental Appeal – in small cases to protect the interest of revenue. H
Non-Filing Rs. 10,000
11 of appeal against following………. APPELLATE TRIBUNAL * Power & function Exercise & Discharge By NATIONAL * Aids or Abets any of Above Offence. Penalty MAY Extend to Rs.25000/- * Refund Tax Amount First time: Subsequent
Non-Filing (Constituted by C.G. on Recommendation of Council)
Record
President / STATE President. * Acquire possessions of / Transport / Removing/ Depositing/ Keeping /concealing/ supplying/Purchasing- Note: No Penalty for MINOR OR ITC Imprisonment Time:
(a) Charge T/F: An order of the Commissioner or other authority empowered to direct transfer of proceedings from one STATE Benches (Total 31+5 Benches) Headed By Respective * CASES upto Rs. 5 Lakh may be dispose off-Sitting singly. Receiving or any other way involve in Contraband goods (which is knows liable to confiscation) Breaches (eg. TAX below Rs 10,000) - False Fraudulently
officer to another officer; or STATE /UT President & have C / S-GST members, and have * Decision will be Based on Majority of same Bench – IF not * NOT to obey Summon. &MISTAKE Apparent from Records. - Duplicate Rs. 100 L to 200 L 6M to 1 Y + Fine 6M to 5 Y+Fine
its AREA Benches and handle other cases Then Refer it to another Bench & check majority. *Fails to issue or account for invoice Rs. 200 L to 500 L 6M to 3 Y + Fine 6M to 5 Y+Fine
* Proceeding=Judicial proceeding (Civil Court). Exceeding 500 L 6M to 5 Y + Fine 6M to 5 Y+Fine
(b) Seizure of Books: An order pertaining to the seizure or retention of books of account, register and other documents; or
*Power to refuse cases upto Rs. 50,000 GENERAL PENALTY: Note: variable Penalty is subject oppo. ITC Invoice
* Information
* NOTE: FOR 3 SPECIFIED OFFENCE imprisonment
*
National Bench - Headed By: NATIONAL President. * Rectify mistake apparent from the Records with in 3 months. Of being heard and will be descriptive will be upto 6 months with or without fine without any
(c) Prosecution Order: An order sanctioning prosecution under this Act; or
and Regional Benches fall under National benches and handle Note:- On Voluntarily disclosure - officer MAY liberal. And will depend case to case . Wrong Availed/ *NO/ False invoice * False / NO monetary limit. (Evade, Record, Tamper)
only the cases involving issue of PLACE OF SUPPLY Utilised ITC * Issue invoice information
(d) Payment in Installment: An order passed under section 80 [payment of tax and other amount in instalments. * Supply contra-banned goods /Supply Taxable goods without Registration. as leads to wrongful ITC or refund Note: Minimum imprisonment of 6months can be reduced
* Does NOT Account for Taxable goods. PENALTY Incidental : Obstruct Officer, Collect Any TAX/ in special and adequate cases as decided by court of law.
12. Every order passed under this chapter will bound both the parties. Note: Any of the Party may file memo * Any other contravention to Evade TAX. amount & NOT to paid even Beyond
Of Cross objection – within 45 days + EXT
* Supply or receives goods in contravention with intent to evade payment of tax + 3 months, FRAUDY PERSON. HOT OFFENCE = The offence Related to INVOICE, ITC,
13. Fees for rectification of mistake/Restoration of Appeal @ Appellate Tribunal :: fees Rs. 1000 to Rs. 25,.000 Note: For Confiscation - (SCN- Opportunity of being heard - Order) * Acquire possession of / concerning himself in transporting/ Collect but not paid even beyond 3 months and have value of Rs.
Department Appeal Review by Confiscation adjudged
Suppling/ Depositing contra-banned goods (knowingly) ie. 5 crore plus.
14. (Personally mandatory- where Needed like Oath/Affirmation) Committee Detention or Seizure and Release : Where any person transports any goods or stores any goods while they are in
Appearance before Authority Offence by secondary party knowingly.
transit in contravention of the provisions , all such goods and conveyance used and documents relating to such goods Option to fine * Fraud AGENT (receive or supply service in contravention)
Assessee :with Pre-deposit 20% of OIA)
and conveyance shall be liable to detention or seizure and after detention or seizure, shall be released,–– * Tamper with or destroy material evidence or documents COOL OFFENCE: Rest of the offences.
And self-admitted dues @ 100 %
through Authorised Representative * Attempt to commit or abet the commission of any of the
 TAX + Penalty @100% of TAX amount (and in case odf exempted goods penalty will be @ 2% of VALUE offence Above.
OF GOODS or Rs. 25,000: whichever is lower) Exercise Not
 TAX + Penalty @50% of VALUE OF GOODS less Tax amount (and in case of exempted goods penalty will Exercise
be @ 5% of VALUE OF GOODS or Rs. 25,000: whichever is lower) [where the owner of the goods does not
Who is qualified to be a Who is NOT Qualified for
Authorised Representative
come forward for payment of such tax and penalty] Offence by Companies / Certain other person
Authorised Representative
confiscate
Note: On payment of above amount all relatedproceedings shall be deemed to be concluded.
PAY Red. Fine Auction, Dispose-
along with storage off etc. Person Incharge as well Company = shall be Deemed to be guilty.
* Relative Govt. Employee: Dismissed/ Confiscation: Where the person transporting any goods or the owner of the goods fails to pay the amount of CHARGES , Penalty, Senior People like MD/ Director / Manager / Secretary/ karta / partner / trustee etc. = Also deemed to be guilty
* Regular employee Removed tax and penalty within 7 days of such detention or seizure, further proceedings shall be initiated in accordance Other Charges . (If consent or connivance or negligence of such persons - Involved
Order (but not refer back)
* Practicing Advocate. with the provisions of section 130, however where the detained or seized goods are perishable or hazardous in [Max. Red. Fine. = MP of the goods – To be excluded: IF proof – Offence was committed without his knowledge.
Person convicted under an nature or are likely to depreciate in value with passage of time, the said period of 7 days may be reduced by the Tax thereon.] -- He had exercised due diligence.
* Practicing CA/CMA/CS Pre deposit by Assessee APPELLATE
offence under GST / Custom / Revisional proper officer.
* GST practitioner Self-admitted dues @ 100% Authority
Excise / Service Tax /Sales Tax Authority
*Retired Tax officer (Grade B or more for 2 year ) Disputed ka @ 10% of OIO
* Any persons specified by Council. Adjudicating Appeal:3M+1M
Adjudged as an Insolvent (during Authority
the period of insolvency) (OIO) Review by
Commissioner * Engaged in Transporting contra-banned goods. Confiscation of Conveyance -
Found Guilty of miscount by Departmental appeal: 6M +1M (& owner – does not prove it was used without his/Agent’s Knowledge)
prescribed Authority May Redeem on Payment of
Redemption fine
Note AT THE END: CIVIL liability does not affect CRIMINAL liability. Tax Payable on Goods Being
Transported