New Delhi: Traders' body CAIT Friday warned that allowing central as well as state tax administrations to initiate action against any taxpayer irrespective of jurisdiction would lead to harassment of traders and complicate the tax system.

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Seeking Finance Minister Arun Jaitley's intervention in the matter, the CAIT in a letter claimed that the decision of the GST Council allowing jurisdiction to central as well as state tax administration over assesses "not only allows overlapping of jurisdiction and harassment of traders but will also complicate the taxation system"

Earlier this month, the Central Board of Indirect Taxes and Customs, in a communication to field formations, had said that "intelligence based enforcement action" against a taxpayer can be initiated by Central and state officials even if the assessee does not fall under the official's jurisdiction. 

The communication seeks to end the ambiguity regarding initiation of enforcement action by central tax officials in case the taxpayer is assigned to state tax authority or vice versa.

CAIT in the letter to Jaitley pointed out that assessment by two authorities at any given point of time will flout the principle of ease of doing business and traders will find it difficult to comply with the prescribed rules and regulations being answerable to two tax authorities.

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"We request you to please look into the matter in the light of its adverse ramifications and urge the GST Council to reconsider its decision and allow only one Authority to have jurisdiction on assesses," it said.

Under the Goods and Services Tax (GST) regime, which was rolled out from July 1, 2017, the taxpayers were assigned to Central and state officials on the basis of annual turnover. The GST Council in January 2017 decided that both the central and state tax administration would have the power to take intelligence-based enforcement action.