New Delhi, 27 October (H.S.): The Central Board of Indirect Taxes and Customs (CBIC) has issued eight circulars addressing various aspects of the Goods and Services Tax (GST) regime, including registration, tax demands, adjudication proceedings and export payments. The measures are intended to simplify tax compliance, bring greater uniformity to the functioning of tax authorities and provide taxpayers with greater procedural clarity.

The guidelines, issued on October 26, include a detailed list of documents required for GST registration, along with prescribed formats for consent letters, affidavits and declarations. The move is expected to reduce the need for tax officials to seek additional documents or clarifications while processing registration applications, thereby helping expedite the process.

The circulars follow decisions taken at the GST Council’s meeting earlier this month. The Council is the principal body responsible for making recommendations on GST-related matters.

The CBIC has also issued guidelines on tax demands, adjudication and appeal proceedings under the Central Goods and Services Tax (CGST) Act. According to the guidelines, taxpayers should, wherever feasible, be given an opportunity to explain their position before a show-cause notice is issued. Such notices should clearly specify the allegations against the taxpayer and the grounds on which the proposed action is based.

The Board has further clarified that tax authorities must establish the taxpayer’s intention to evade tax before invoking stricter provisions relating to fraud, wilful misstatement or suppression of facts. These provisions cannot be applied merely on the basis of an alleged tax shortfall without establishing the requisite grounds.

The circulars also address the use of artificial intelligence (AI) and other technological tools in tax adjudication. They require human oversight and independent verification of the accuracy of AI-generated information before it is relied upon or incorporated into an adjudication order.

In a separate clarification concerning exporters, the CBIC has recognised permissible adjustment arrangements under the Foreign Exchange Management Act (FEMA). In accordance with the Reserve Bank of India’s directions, where export proceeds are adjusted against payments for imports, the receipt-of-payment condition prescribed under the Integrated Goods and Services Tax (IGST) law for the export of services will be treated as fulfilled, provided the arrangement complies with the applicable requirements.

Commenting on the circulars, Saurabh Agrawal, Tax Partner at EY India, said the clarification would bring greater certainty to cross-border transactions and align the GST framework with permitted methods of settling foreign exchange transactions.

At its 57th meeting, the GST Council had approved several proposed changes aimed at decriminalising certain offences and simplifying legal and procedural requirements. These included proposals to remove arrest powers available to tax officials and raise the threshold for initiating prosecution from Rs. 1 crore to Rs. 5 crore.

The proposed legal amendments will require parliamentary approval and are expected to take effect from April 1, 2027. In contrast, changes relating to administrative procedures are being implemented through circulars issued by the CBIC.

---------------

Hindusthan Samachar / Jun Sarkar