TS Plans to Reopen Closed Tax Cases Unnerves Bizmen

Hyderabad: An internal note circulated by the commercial tax department to the joint commissioners of all divisions in the state has created unease among GST paying traders under the purview of FTCCI (Federation of Telangana Chambers of Commerce and Industry).

The note issued as per section 108 of the Telangana GST Act, 2017 veering away from the path set by the GST Council not to put hardships on businesses and ease the compliance burden, seems to be treading its own path.

The note, along with asking the joint commissioners to revise the orders passed for the previous financial years by re-opening the already closed proceedings, enjoins the joint commissioners to recommend the names of officials for disciplinary action who have passed irregular orders that caused the revenue loss.

Commenting on the note, chartered accountant (CA) Mohd. Irshad Ahmed, chairman, GST and Customs Committee, FTCCI, said, “Disciplinary action on tax officers is a rare phenomenon, and if such action is taken on them, there is a high risk that officers will be hesitant to issue orders in favour of the taxpayers on this pretext, and this will further hurt the tax payers in the long run.”

Generally, in revenue matters, it is difficult to blame an official for any unfavourable order since they are issued after undertaking detailed verification of records and other information submitted by the taxpayers. The officers enjoy indemnity for any genuine errors and there is no provision in the GST law for action against officials.

The Commercial Tax Department should also consider the implications for trade and industry, particularly small and medium enterprises, before resorting to reopening already completed proceedings. There has been a long pending demand of the industry to roll out an amnesty scheme for small and medium enterprises in respect of tax demands for the first two years of the introduction of GST law, i.e., for the FYs 2017-18 and 2018-19, which can also be taken up before the GST council.

Recently, the Central Board of Indirect Taxes and Customs (CBIC) has advised its officers to avoid issuing show cause notices under GST recklessly, as it will lead to litigations. Further, CBIC has also issued several circulars to the tax officers clarifying various matters and been giving relief to taxpayers in many procedural aspects including show cause notices.

“We are mulling giving a representation to the commercial tax department on the issue,” Mohd. Irshad Ahmed said.