NEW DELHI: The government has clarified that both the state and central authorities handling the goods and services tax have enforcement powers over all assessees in a state, triggering fears that the industry may get caught in a crossfire between the two.
The central tax and state tax authorities are allowed to initiate intelligence-based enforcement action on the entire taxpayer base, irrespective of the administrative assignment of the taxpayers to any authority, Central Board of Indirect Taxes and Customs member Mahendra Singh wrote to officials, citing the minutes of a meeting of the Goods and Services Tax Council.
At present, for assessment purposes, there is a clear division between the Centre and state officials. States have exclusive control over businesses with a turnover of up to Rs 1.5 crore, while those with a greater revenue have been divided as per an agreed formula.
“The authority which initiates such action is empowered to complete the entire process of investigation, issuance of show cause notices, adjudication, recovery, filing of appeal, etc., arising out of such action,” according to the letter.
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