CBIC has issued guidelines on blocking of tax credits by goods and services tax (GST) sector authorities, saying such action should be based on ‘material evidence’ and not mere ‘suspicion’.
The Central Board of Indirect Taxes and Customs (CBIC) norms stipulate five specific circumstances in which such credit can be blocked by a senior tax officer. These include getting credit without invoice or valid document or getting credit by buyers on invoices on which GST has not been paid by sellers.
The CBIC said the commissioner, or an officer authorized by him, not below the rank of an assistant commissioner, shall be given an opinion to block the ITC only after “application of reasonable mind” considering all the facts of the case. Should be made “It is reiterated that the power to disallow debit of amount from electronic credit ledger should not be exercised mechanically and a careful examination of all the facts of the case shall determine suitable cases for exercising the power under rule 86A. important to do,” it said.
The government had introduced Rule 86A in the GST rules in December 2019, empowering taxpayers to block ITC available in the electronic credit ledger of taxpayers if the officer has “reason to believe” that ITC was fraudulently used. benefit was taken.
Till early last month, taxpayers had blocked ITC of Rs 14,000 crore of 66,000 businesses under this rule.
CBIC in its guidelines on November 2 said that debit of amount from electronic credit ledger being extraordinary in nature, should be resorted to with utmost care and utmost care and caution. It considers an objective determination based on intelligent care and evaluation as distinct from a purely subjective consideration of skepticism.
with PTI
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