The Central Board of Indirect Taxes and Customs (CBIC) has asked field offices to draw up an action plan so that no case of GST evasion is pending investigation beyond one year.

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In an instruction to field formations, the CBIC has also asked GST officers to speed up investigation and issue show-cause notices in evasion cases, so that enough time is left with adjudicating authority to pass orders.

It said that the last date for filing the Annual Returns for 2017-18, 2018-19 and 2019-20 financial years is already over.

The instruction by the CBIC follows a detailed analysis of cases of GST evasion and fraudulent input tax credit (ITC) availment booked viz-a-viz number of show-cause notices (SCNs) issued for 2017-18, 2018-19 and 2019-20 financial years.

The analysis showed that in GST evasion and fraudulent ITC cases booked, SCNs have been issued only in a few cases.

The CBIC observed if the issuance of SCNs is pushed to close proximity of the end dates/last dates, it may leave very little time with the adjudicating authority to pass orders. This might result in a situation where either the adjudicating authority is not able to pass orders within the prescribed time period or quality of adjudication suffers.

"It is felt that the present situation warrants for extra efforts on the part of field formations and strict monitoring at supervisory level," the CBIC said.

The last date for filing Goods and Services Tax (GST) annual returns for 2017-18 fiscal was February 5 and February 7, 2020 (varying across states), while for 2018-19 and 2019-20 it was December 31, 2020 and March 31, 2021, respectively.

Under GST law, jurisdictional officers are required to pass orders within 3 years of the last date of filing annual returns in cases where there is no proof of malafide intention of tax evasion. In other cases, the time limit is 5 years.

The CBIC asked the Principal Director Generals/Principal Chief Commissioners/Chief Commissioners within their jurisdiction to take stock of the pending investigation cases/other cases which warrant issuance of show-cause notices and take appropriate action to ensure timely completion of investigations and issuance of SCNs well before the last date.

"The respective Pr. Chief Commissioners/Chief Commissioners may draw an action plan so that no case is pending investigation beyond one year. Needless to mention that once SCN (show-cause notice) is issued, timely adjudication must follow," the CBIC instruction said.

AMRG & Associates Senior Partner Rajat Mohan said in numerous detected cases of ITC frauds and GST evasion, notices under GST law have not been issued to taxpayers, squeezing the time available for the due adjudication process. Such delay would either make the adjudication time-barred or impact the quality of orders, hurting the business ecosystem of the country.

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"The government machinery needs to responsibly assume the task of adjudication so that neither taxpayers nor exchequer has to suffer due to paucity of time. The GST ecosystem needs to appreciate that the due adjudication process will reduce litigation and speed up the recovery process," Mohan added.

In the April-June quarter of the current financial year, 818 ITC fraud cases were booked involving Rs 4,002 crore. During the period, Rs 175.21 crore of ITC fraud has been recovered and 19 SCNs were issued.