GST

Summons under GST: Rights and Duties of a Taxpayer

Under GST law, GST officers can issue summons to any taxpayer requiring their attendance. There has been numerous cases wherein tax authorities issued summons to various companies, employees and key managerial persons and they had to appear before GST officers. When summons is issued under GST, the one to whom such summons have been issued are duty bound to appear before the GST officers. However, taxpayers get intimidated on receiving summons as they are unaware of how to deal with such summons. They are oblivious of their rights and duties. In view of that, this article seeks to apprise its readers about their rights and duties with respect to summons under GST but before we delve into this subject let’s understand the meaning of Summons under GST.

What is Summons under GST?

A Summon refers to an order of the court or any administrative body of the government to any person to appear in court or in the concerned office in person at a specified place and time regarding any investigation or enquiry on any matter. As per the GST law, section 70 of the CGST Act, 2017^[1] empowers GST officers to issue summon to any person to appear before them, if it is necessary in the course of an inquiry to record statements or produce some documents. In case of failure to appear before the concerned officer, penalty can be imposed.

Who can issue summons under GST?

If you have received a summon under GST, then you should find out who has issued such summon. Find out whether summon has been issued by a proper officer under GST law or not. The officers of the audit wing cannot issue summons under GST however, the DGGI has been bestowed with vast powers in all of India to exercise this power. DGGI refers to Directorate General of GST Intelligence. It is the topmost intelligence and investigative agency which deals in matters relating to violation of the Goods & Services Tax, Central Excise Duty and Service Tax.

What are the duties of a taxpayer?

Just like judicial proceedings under Indian Penal Code, summon proceedings under GST are equally relevant. Hence as a taxpayer, you should exercise due caution while dealing with the tax authorities and officials. In such proceedings, the officers of the tax authorities may ask for production of documents and also record statements of employees or directors or key managerial persons of a company.

While making submissions before the GST officers, taxpayers should be aware about the ramifications of their submissions. Unlike in the case of submissions made before police officers, the statements made before GST officers can be admitted as evidence against the taxpayer. Supreme Court in a case had held that custom officers do not constitute as a police officer hence any statement made before them can be admissible as evidence. Moreover, when a matter of similar nature under GST law came up before the Telangana HC, it held that GST officers are not police officers hence any statement made before GST officers shall have evidentiary value. The crux of the matter is that taxpayers should remain cautious before they make any statement as such statements can for a basis for taking action against them.

A taxpayer cannot say just anything to the GST officers. What they submit before the officials should be accurate and should not involve any false or misleading statements. Therefore as a taxpayer, you should provide information to the best of your knowledge when asked by tax officers.

Rights of a taxpayer

A taxpayer needs to be aware of their rights to prevent harassment by GST officers. In this segment, we provide in-depth understanding through which taxpayers can protect themselves from unwanted actions from GST officials.

The CBIC had issued detailed regulations to regulate summon proceedings which includes a rule that states summons should be used only as a last resort in case where the taxpayer is not cooperating, and it should be used against senior management if investigation proves their involvement and summons should not be issued warranting appearance at odd hours. Further, the language used in the summons should not be harsh to cause stress or harassment to the taxpayer. It should justify the reasons for its issuance.

Apart from the above mentioned rules, as a taxpayer you should be aware about some other crucial rights in respect of summons under GST.

• Right of Retraction

What happens is that officials tend to put a lot of undue pressure on taxpayers causing them to be intimidated and cause them to submit inaccurately. In such cases, taxpayers can exercise the right to retract the statement made earlier which is incorrect and substitute it with a correct statement. This right safeguards taxpayers from action to be taken against them by tax authorities on such incorrect submissions.

• Right to remain silent

There may be times when a taxpayer is not 100% sure about a question raised hence in such situation, the taxpayer can choose to remain silent. This right is a constitutional right given to a taxpayer. Remaining silent doesn’t constitute an offence as said by Supreme Court and High Courts.

• Right to cross examine

The GST officials may try to manipulate the person who has been summoned by giving reference to the adverse statements made by a third person who can be his colleague, vendor/dealers of the company etc. In such cases, the taxpayer against whom such statement has been made can cross examine the other person to verify such statements made by him.

Other Rights

While recording a statement, the taxpayer is allowed to refer Books of Accounts or other documents and then make a statement as he is not expected to remember everything.

Takeaway

A taxpayer should be aware of his or her rights and duties in respect of summons under GST. It will prevent such taxpayer from falling into adverse situations or succumbing to pressure mounted by the authorities.  There have been cases where taxpayers were ignorant about their rights and were harassed by officials. As a taxpayer, if you receive a summon, then make sure to verify whether summon has been issued by a proper officer under GST law or not. If required, take help from a professional.

Read our Article:Applicability of GST on supplies under CSR