[BREAKING] CBIC mandates Virtual Hearing for Indirect Tax - GST, Customs, Excise and Service Tax Appeals [Read Instructions]

In a significant development, the Central Board of Indirect Taxes and Customs ( CBIC ) has issued instructions mandating virtual hearings for appeals under the Goods and Services Tax ( GST ), Customs, Excise, and Service Tax laws, effective immediately.

As per the latest CBIC instruction, all personal hearings related to the Central Goods and Services Tax ( CGST ) Act, Integrated Goods and Services Tax ( IGST ) Act, Customs Act, Central Excise Act, and Chapter V of the Finance Act, 1994, are now to be conducted solely via video conferencing. This policy reinstates the earlier instruction dated August 21, 2020, which promoted virtual hearings as the standard.

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The instructions, prescribing the Guidelines for conduct of personal hearings under CGST Act, 2017, IGST Act, 2017, Customs Act, 1962, Central Excise Act, 1944 and Chapter V of Finance Act, 1994 stated as follows: —

“Kind attention is invited towards Board's instruction dated 21.08.2020 on the subject cited above.

The instruction dated 21.08.2020, was amended vide Instruction dated 28.07.2022, whereby the said para 5, had been substituted as under:

"The conduct of personal hearing by adjudicating/ appellate authority shall be done in the virtual mode only at the request of the assessee. The virtual mode of hearing shall not be mandatory. For the assesses not opting for the virtual mode, the personal hearing shall be taken in physical mode.”

The instruction in the subject matter, as amended, has been re-examined in the light of representations received subsequently. On re-examination of the subject matter, the amendment dated 28.07.2022 has now been withdrawn. With this change, the original instruction dated 21.08.2020 has been reinstated, making it mandatory for all departmental quasi-judicial/appellate authorities to conduct personal hearing for proceedings under the specified Acts through Video Conferencing (VC), i.e., in the Virtual Mode. Exception to allow personal hearing in Physical mode by the concerned authorities may be resorted to on receipt of specific request from the party concerned, and after recording the reasons for the same in writing.”

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In a reversal of the July 2022 amendment, the CBIC has re-established that all departmental quasi-judicial and appellate authorities must conduct personal hearings exclusively through virtual conferencing. This decision underscores CBIC’s commitment to digital transformation and the modernization of tax administration processes.

While virtual hearings are now mandatory, an exception allows for physical hearings upon specific request from the concerned party. This exception, however, requires the adjudicating authority to document the reasons in writing, justifying the need for an in-person hearing.

Impact and Implications

The move is expected to significantly reduce the backlog of cases by making hearings more accessible and efficient. Virtual hearings eliminate travel requirements, allowing quicker scheduling and reducing delays. Industry stakeholders, especially businesses with operations in multiple states, are likely to benefit from this digital-first approach, which aligns with the broader objectives of "Digital India."

To Read the full text of the Instructions CLICK HERE

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