CBIC issues instructions for issuing SCNs in time bound manner

CBIC issues instructions for issuing SCNs in time bound manner

Reetu | Sep 23, 2021 |

CBIC issues instructions for issuing SCNs in time bound manner

CBIC issues instructions for issuing SCNs in time bound manner

The Central Board of Indirect Taxes and Customs (CBIC) has released guidelines for the timely issuance of Show Cause Notices (SCNs).

SCNs have been issued in just a few cases of GST evasion and fraudulent ITC availment booked during the FY 2017-18 (w.e.f. July 2017), 2018-19, and 2019-20, according to a detailed examination of trends in cases of GST evasion and fraudulent ITC availment booked vs. number of SCNs issued.

The subject was investigated by the Board in the context of the issuance of SCNs in a small percentage of cases booked/detected, as noted above. As can be seen, the deadline for filing Annual Returns for the fiscal years 2017-18, 2018-19, and 2019-20 has passed. As a result, the three-year/five-year time limit for issuing orders under Sections 73 and 74 of the CGST Act, 2017 has already begun.

The provisions of Section 74 of the CGST Act, 2017 appear to cover incidents of ITC fraud or GST evasion (the extended period clause). However, there may be additional circumstances in which a notification under Section 73 of the CGST Act, 2017 is appropriate.

The Board stated that the Principal Director General/Director General(s)/Principal Chief Commissioner(s)/Chief Commissioner(s) within their jurisdiction may assess the pending investigation cases/other cases that warrant issuance of show cause notices and take appropriate action to ensure timely completion of the investigation(s) and issuance of SCNs well before the deadline. The respective Pr. Chief Commissioners/Chief Commissioners may devise an action plan to ensure that no case remains open for more than a year. It goes without saying that once the SCN is issued, quick adjudication is required.

If SCNs are issued close to the end dates/last dates, the adjudicating body may have very little time to pass orders within the timeframe specified in sub-section (10) of Section 73/74. As a result, the adjudicating authority may be unable to issue orders within the necessary time frame, or the quality of the adjudication may suffer. The current scenario, it is believed, necessitates more efforts on the side of field formations, as well as close supervision at the supervisory level.

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