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GST: Arrest without warrant and no bail for tax evasion over Rs 5 cr

New Delhi: ax evasion exceeding an amount of Rs 5 crore under the Goods and Services Tax (GST) regime will be a non-bailable offence with the police having the authority to arrest persons without a warrant.

FM Arun Jaitley is working hard to deliver the GST promise.
FM Arun Jaitley is working hard to deliver the GST promise.

The Central GST (CGST) Act provides that if the offences relating to taxable goods and/or services where the amount of tax evaded or the amount of input tax credit wrongly availed or the amount of refund wrongly taken exceeds Rs 5 crore, then they will be cognizable and non-bailable.

In a 223-page FAQ (frequently asked questions) on GST, the Central Board of Excise and Customs (CBEC) has also stated that other offences under the act are non-cognizable and bailable.

The government has set a target date of July 1 for roll out of the GST, which will subsume central excise, service tax, VAT and other local levies.

According to the FAQ, cognizable offence means serious category of offences in respect of which a police officer has the authority to make an arrest without a warrant and to start an investigation with or without the permission of a court.

Non-cognizable offence means relatively less serious offences in respect of which a police officer does not have the authority to make an arrest without a warrant and an investigation cannot be initiated without a court order, it said.

However, as part of the safeguards that have been incorporated in the act, the FAQ states that if a person is arrested for a cognizable offence, he must be informed in writing of the grounds of arrest and he must be produced before a magistrate within 24 hours of his arrest.

If a person is arrested for a non-cognizable and bailable offence, the Deputy/ Assistant Commissioner of CGST/SGST can release him on bail and he will be subject to the same provisions as an officer in-charge of a police station under section 436 of the Code of Criminal Procedure, 1973.
T
he FAQ states that, if a person does not appear before a CGST/SGST officer who has issued the summon, he is liable to a penalty of up to Rs 25,000.

Also, the tax department have guidelines to ensure that summon provisions are not misused by field officers.

As per the guidelines, summons are to be issued as a last resort where assessees are not co-operating and this should not be used for the top management.

Also the language of the summons should not be harsh and legal which causes unnecessary mental stress and embarrassment to the receiver, it said.

Further, summons by the superintendents should be issued after obtaining prior written permission from an officer not below the rank of Assistant Commissioner with the reasons for issuance of summons to be recorded in writing.

Senior management officials such as CEO, CFO, General Managers of a large company or a Public Sector Undertaking should not generally be issued summons at the first instance.

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