The Tax Department will actively conduct a consultation prior to issuance of show-cause notices to evaders and assessees of GST so as to facilitate the easier resolution of tax disputes and prevent the increasing number of litigation.
The Central Board of Indirect Taxes and Customs (CBIC) has clarified that such consultations with the assessee, prior to issuance of show-cause notice (SCN) in case of demands of duty is above Rs 50 lakh (except for preventive/offence related SCNs), is mandatory and shall be done by the SCN-issuing authority.
The process will involve tax authorities holding talks with assessees on the tax demand raised by them and how it could be settled.
All clarifications regarding the unsettled tax demand will be provided and all effort made to settle the issue before a show-cause notice is issued.
The consultation process will be followed in cases of adjudication of demands of duty/tax or recovery of CENVAT Credit by different authorities.
The adjudicating authority in the cases will be Additional Commissioner/Joint Commissioner-level officers for cases involving duty/tax or recovery of CENVAT Credit of above Rs 50 lakh but not exceeding Rs 2 crore.
Cases involving duty/tax or recovery of CENVAT Credit above Rs 2 crore are to be adjudicated by the Commissioner.
The CBIC said that with changes in monetary limits of adjudication and to lend clarity on this issue, it is hereby clarified that "pre-show-cause notice consultation with the assessee, prior to issuance of SCN in case of demands of duty is above Rs 50 lakh shall be done by the SCN-issuing authority".
