This Tax Alert summarizes recent Circulars and Instructions issued by Central Board of Indirect Taxes and Customs (CBIC) prescribing guidelines pertaining to issuance of summons and arrests under Goods and Services Tax (GST) and revising monetary threshold for prosecution, arrest and bail under Customs Act.
The key highlights are:
- Arrest should not be made in routine and mechanical manner even if all the legal conditions precedent to arrest are fulfilled.
- Arrest should not be resorted to in cases of technical nature i.e., where the demand of tax is based on a difference of opinion in interpreting law.
- Senior management officials of the company should be summoned only when there are clear indications of their involvement in the decision-making process resulting in loss to the Revenue.
- Authorities should avoid issuing summons seeking statutory documents which are digitally available on the GST portal.
- The present monetary thresholds for launching of prosecution, arrest and bail in relation to offences punishable under Customs Act, 1962 have been revised.
Comments
- Guidelines and instructions may go a long way in alleviating the industry's fear concerning revenue authority's powers to arrest a person for offences. Further, revision in threshold for prosecution proceedings under Customs is a welcome move.
- Presently, different practices are being followed by field formation with respect to issuance of summons. Guidelines may ensure consistency in administrative procedure for issuing summons and push the Government's ease of doing business agenda.
- Restricting the issuance of summons to senior management personnel for routine matters is likely to provide much needed relief to businesses.
- Instructions on certain aspects dealing with arrests could give rise to subjectivity that may result in divergent practices and unwarranted litigation.
- Government may consider the representation made by industry on decriminalization of offences under GST and Customs.
