Enhancing Tax Probe Protocol: CBIC’s Circular to DGGI Officials

Introduction:

The Central Board of Indirect Tax and Customs (CBIC) is set to introduce new guidelines aimed at refining the conduct of Directorate General of Goods and Services Tax Intelligence (DGGI) officials during tax investigations. This move, anticipated to be outlined in a forthcoming circular, seeks to address concerns raised by multinational corporations regarding the investigative process, particularly in relation to the interrogation of senior executives, as reported by The Economic Times.

Guidelines for Officials:

The circular is expected to direct DGGI officials to refrain from conducting questioning sessions with Chief Executive Officers (CXOs) during late hours and from collecting tax payments during search operations. This proactive measure underscores the CBIC’s commitment to fostering a more transparent and efficient tax investigation framework.

Feedback and Revision:

According to sources, the decision to issue the circular stems from feedback received from both industry stakeholders and departmental officials. A senior government official highlighted the need to revisit existing instructions on DGGI investigations to ensure a conducive environment for business operations. The proposed guidelines are being developed with a view to streamlining procedures and promoting ease of doing business.

Addressing Concerns:

The ET report also featured insights from a senior executive of a company who expressed concerns over the interrogation process, particularly emphasizing the need for respectful treatment and avoiding unnecessary inconvenience. The executive recounted instances of late-night questioning and reiterated the importance of fair treatment during investigations.

Government’s Response:

In response to such concerns, the government official acknowledged the need for a balanced approach, noting that instances of late-night questioning should be minimized, especially when companies are cooperating with investigations. The official reiterated the government’s commitment to addressing feedback and ensuring a more considerate approach towards companies and their senior management.

Conclusion:

The impending circular from the CBIC marks a significant step towards enhancing the protocol for tax investigations conducted by DGGI officials. By incorporating feedback from industry stakeholders and departmental officials, the government aims to strike a balance between effective enforcement and facilitating ease of doing business. This proactive measure underscores the government’s commitment to fostering a conducive business environment while maintaining robust tax compliance standards.