India’s top indirect taxes body told the goods and services tax (GST) officials not to issue summons to the top management of the companies. It says they should not, at first instance, issue haul for the CEOs.
Besides, it also said that the arrest could only happen with the written permission of the senior officials.
The Central Board of Indirect Taxes and Customs (CBIC) has issued detailed instructions on the same. On Thursday, to address the concerns of businesses on the excessive issue of summons and arrests provisions in the law.
It says that the officials should first call for evidence. Moreover, the arrest provisions in the GST law should be used only in exceptional circumstances. There must be some fraudulent activity or tampering with documents to take such a step.
The officials cannot be arrested for routine or technical matters. The cases of arrest involving differences of opinion on the interpretation of the law are wrong.
The CBIC took the move following the complaints by the industry and observations made by courts. The GST law states that a commissioner can arrest or authorise arrest only if there is sufficient reason to believe.
The person arrested should have committed offences such as not issuing an invoice to evade tax or fake invoices to claim input tax credit or refunds.
Many companies have complained of excessive use of the provisions in the law to deter evasion.
The Supreme Court has said in its August 2021 decision, “ A distinction must be made between the existence of the power to arrest and the justification to exercise it.”
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