The Central Board of Indirect Taxes and Customs (CBIC) has recently issued an instruction to GST officers conducting audits, urging them to refer cases with conflicting interpretations of tax law provisions to the board. This proactive step aims to promote uniformity, reduce unnecessary litigation, and align policies to focus on ease of doing business. Deloitte India Partner and Leader Indirect Tax, Mahesh Jaising, emphasized the importance of this initiative in maintaining consistency and clarity in the application of GST laws.
The instruction from CBIC highlights the challenges faced by industries during GST audits, particularly concerning the inconsistent interpretations of tax laws by different audit authorities. These discrepancies have often led to conflicting decisions, prolonged disputes, and increased compliance costs for businesses. Rajat Mohan, Executive Director at Moore Singhi, emphasized the need for standardizing the audit process to address these issues and minimize the impact on businesses.
One of the key aspects of the CBIC’s instruction is the requirement for Zonal Principal Chief Commissioners to consult with the relevant policy wing of the Board (GST Policy or TRU) before concluding any investigation where multiple interpretations of the law exist. This consultation process is crucial in ensuring a uniform interpretation of GST laws across different jurisdictions, thereby reducing the likelihood of unnecessary litigation and providing clarity for businesses.
Mahesh Jaising praised this proactive step by CBIC, highlighting its significance in promoting policy alignment, ease of doing business, and reducing unnecessary litigation by maintaining uniformity. By addressing conflicting interpretations of tax laws during audits, the CBIC’s initiative aims to streamline the audit process, minimize disputes, and enhance compliance for businesses operating under the GST regime.
Overall, the CBIC’s instruction represents a positive development in the realm of GST audits, signaling a commitment to improving the clarity and consistency of tax law interpretations. By fostering collaboration between audit authorities and policy wings, this initiative seeks to create a more conducive environment for businesses, ultimately contributing to a smoother and more efficient tax compliance process.