GST Notice: CBIC to Take Actions to Remove Duplicate Notices from both Centre and State GST Depts.

The Section 6(2)(b) of the CGST Act empowers to prohibit parallel proceedings
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The Central Board of Indirect Taxes ( CBIC ) has instructed its field officers to develop an internal process aimed at eliminating duplicate Goods and Services Tax ( GST ) notices sent to companies and individuals already under investigation by state goods and services tax authorities.

According to the reports, there are instances where the taxpayers are getting notices from both Central and State GST departments. The same has been challenged before different high courts. Thus, to reduce the same, the CBIC is planning to take measures to control this redundancy.

The Calcutta High Court in Raj Metal Industries & Anr. V.UOI & Ors. stayed the summons issued and proceedings initiated thereunder against assessee by the State GST Authorities since the proceedings were already pending on same subject matter under Central Goods and Services Tax Act, 2017 (the CGST Act). Held that, the summons issued is, prima facie, in violation of Section 6(2)(b) of the West Bengal Goods and Services Tax Act, 2017 (“the WBGST Act”)

Read More: Proceedings pending before CGST Dept: Calcutta HC quashes proceedings initiated by State GST Dept

The Madras High Court, in the matter of M/s. VGN Projects Estates Private Limited v. Assistant Commissioner ( State Taxes ) and others, has instructed the taxpayer to respond to the Show Cause Notice issued by the State Tax Authority. This directive comes as parallel proceedings had been commenced by the State Tax Authorities on a similar issue already under consideration by the Central Tax Authority.

The court ruled that if the defects outlined in the SCNs are alike, they should be disregarded, and no further action should be taken against the taxpayer regarding these defects, as they are already being addressed by the Central Tax Authority.

According to Section 6(2)(b) of the CGST Act, “where a proper officer under the Central Goods and Services Tax Act has initiated any proceedings on a subject matter, no proceedings shall be initiated by the proper officer under this Act on the same subject matter.”

Likewise, the court has issued directives regarding simultaneous proceedings conducted by both the Central and State GST departments. Officials emphasised that although state GST authorities have not fully embraced technology, redundant notices could be prevented through effective digital record-keeping of investigations.

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