ALL INDIA CENTRAL EXECUTIVE COMMITTEE MEETING HELD AT BANGALORE ON 11TH AND 12TH OF JUNE 2022 ...
FLASH AIASCT IS NOW THE ONLY RECOGNISED ASSOCIATION FOR SUPERINTENDENTS OF CENTRAL TAX

Friday, September 25, 2020

Suggestions on guidelines for scrutiny of GST Returns

Letter on scrutiny -PDF 

Data sheet suggested

Ref. No: CBIC/34/2020 Date: 25.09.2020


To

Shri. M. Ajit Kumar,

Chairman, CBIC, New Delhi.

Sir,


Sub: Prescription of guidelines for scrutiny of GST returns – certain pre-conditions submitted for improving efficiency- reg.


It has come to our notice that an Officers’ Committee has been constituted with Officers of the rank of Joint Commissioners to Commissioners, vide F. No. 20/06/18/2020-GST dated 4.09.2020 for suggesting guidelines for scrutiny of GST returns.

The said committee has been mandated to submit its report before 25.09.2020.

The Proper Officer prescribed under Section 61 of the CGST Act, 2017 for scrutiny of GST Returns as on date, is the Central Tax Officer (Superintendent). However, no prescriptions have been made so far relating to the percentage of scrutiny and the elements or extent of scrutiny, so far. Hence, if these were the aspects that were expected to be considered by the committee, it could have required the Superintendents and Inspectors who are currently in the field and have hands on knowledge on the complexities involved in such a scrutiny to have been included in the committee. Since the committee has been constituted only with Joint Commissioners, Additional Commissioners and Commissioners, it is therefore presumed that the Committee has been constituted with the objective of prescribing certain ‘roles’ for Officials of these ranks/cadre.

In this regard, this Association would like to place on record the following points as pre-requisites for any prescription of scrutiny of GST Returns:

1)  Since already the Range Officers are heavily burdened with numerous works pertaining to various verifications, cross-verifications, generation of reports, attending to calls of the Tax Payers and Higher Officers, giving reply to Audit Paras, preparation of SCNs/ Draft SCNs etc, without the requisite infrastructure and without manpower as could be comparable with their counterparts in the State GST, no further prescriptions should be made to increase the present work load for the Superintendents. The main work that is at present attended to by the Ranges is enclosed as Annexure A.

2) Officers of the cadres of Assistant Commissioners and above, to be directly assigned such duties of scrutiny, should be notified as Proper Officer under Section 61 of the CGST Act, so that the assigned duties for these higher officials do not flow back to the Superintendent (Central Tax Officer) practically, though on paper it will remain only to justify the existence of the higher posts. This exercise will also have to be linked to adjudicating powers.

3) Scrutiny powers will have to be assigned according to the revenue basis/turn over basis, found practically feasible, in such manner that the entire prescribed scrutiny will be done by these officials, only with the assistance of Inspector or Steno. No Superintendents should be again involved in this work to assist the re-defined proper Officers. It should be made clear that the entire scrutiny and work related to any correspondence, issue of SCN, Draft SCN, reply to Audit paras, reports on the work performed etc, related to these scrutinies, will have to be done ONLY BY THESE DESIGNATED OFFICIALS and SHOULD NOT BE PUSHED DOWN AGAIN TO THE RANGES. It is pertinent to emphasise that for any system to be effective, the underlying maxim should be that a position carrying higher authority should also be yoked to a higher level of responsibility and accountability. That can be ensured only if the defined duites of the post, just as its powers, cannot be delegated.

4) It is our experience from earlier instances that whenever some original work has been assigned to the higher posts on revenue basis, either it was not performed or it was again delegated, officially or unofficially to the lower cadres, ultimately making the Inspectors then and Superintendents later to do that work also thereby defeating the declared purpose for such prescriptions. Even today, a majority of the Group A Officers are directing their subordinates to operate the system on their behalf. Hence, scrutiny to be prescribed for the higher officials, should be mandated to be done through the AIO or system only and any Official using the USER ID and PASS WORD of another Officer or asking another officer to use it should be strictly brought under the ambit of the definition of ‘Corrupt practice’ so that if any such instances are noticed or reported, action should be initiated against the Official who has allowed the others to use their User Id or Password. This has to be made specific because, it will otherwise lead to either harassment of the already burdened cadre of Superintendents or will lead to corruption, favouritism, etc.

5) The percentage of scrutiny to be undertaken by each of the above said officials, as per the revenue limits prescribed, should be decided according to the availability of the posts for such purposes and to the extent practically possible for those posts as detailed earlier, with revenue limits of higher amount prescribed for higher officials. Similarly, risky and sensitive commodities have to be assigned to the higher officials depending upon the risk element or sensitivity involved.

6) Since the Government has declared that no new posts can be created now, for the above work, the department can utilise the services of Superintendents who are already drawing salaries equivalent to the salaries of ACs/DCs/JCs, etc, (only due to the acute stagnation in the cadre of Inspector/Superintendents) by a mere re-designation of the posts so that the above said scrutiny could be achieved without creating additional posts and also by utilising the available man power without incurring additional expenses. In this case it is also pertinent to note that the GST formations in most of the States and UTs have re-designated their officials. The DGHRM also in its’ Cadre Restructuring proposal recommended a Branch B Service on the model of the State GST. This therefore will be a logical extension of the same policy without creation of posts or incurring additional expenditure.

7) The work load in the Ranges will have to be reduced for the above purposes, by making the automation proper so that most of the verifications and cross-verifications between returns are done by the system. Detailed suggestions for these are enclosed as Annexure B.

8) The nature of details to be covered in the scrutiny should be properly laid down in such a manner as to not give room for CERA objections or other agencies questioning certain aspects not taken into account. In other words, scrutiny should be confined only to the submitted data and documents.

9) The details of modalities in the course of Scrutiny should be well advertised since it is expected to be faceless without calling the Assessee in person and/or calling for Documents from Assessees.

10) To facilitate proper scrutiny, all officers should have access to a Centralized data warehouse with analysing access.

11) Scrutiny should be system driven i.e. returns should be chosen randomly and should be openly marked as ‘not scrutinised’ ‘scrutiny initiated’ and ‘scrutiny done’.

12) A System based flagging mechanism should be devised so that the scrutiny prescribed and carried out does not overlap with audit, which is one of the terms of reference for the ‘Scrutiny Committee’.

13) The check list for scrutiny should be System based and if hyperlinks are provided in the check lists then it would be not only easier for the field officers to scrutinize but also will result in focused analysis and quality work. Presently the details of Risk Parameters/Flags are provided through separate letters/circulars and only Serial Numbers are mentioned in Data provided to field officers. Due to frequent transfers of field officers and due to lack of awareness about updated parameters, many field officers face difficulty and may result in omissions due to oversight. It is suggested that check list should therefore be so devised that hyperlinks to risk flags/parameters are available by hitting the Risk Flag/Parameter number in the check list itself. Similarly if various tables/columns/rows of GST Returns, which affects any entry, are also hyperlinked then it will not only improve the quality but also save man hours.

14) A computerised data capturing system as in the DDM should be designed so that every Show Cause Notice is entered in the system with complete details by the issuing authority and every formation should be able to update the status depending upon the stage at which it is pending. This will enable every demand to be traced from its genesis up to its closure, either by payment of due or by any order against the demand coming to be accepted by the department. This will also enable monitoring the arrears of revenue at different stages simultaneously, without again and again calling for reports from lower formations.


It is hoped that the Committee would take into consideration our suggestions above so that the entire exercise would ensure that the to-be designated Proper Officers for scrutiny of GST Returns as per revenue/turn-over basis or risk/sensitivity parameters will usher in a new work culture.

It is also requested that before the issue is finalised, the Board could discuss the issue with this Association because we represent the main cadre of Superintendents who are at the cutting edge of the executive in the field.



Thanking you,

Yours truly,

Encl : Annexures A, B & additional sheet




(R. Manimohan)

Secretary General

Copy submitted for information and necessary action to:

Shri. Rajeev Kapoor, Commisisoner, GST Pune, Convenor,

Committee on suggesting guidelines for scrutiny of GST returns




(R. Manimohan)

Secretary General




ANNEXURE A

A brief on the present work load in Ranges (only illustrative)

At the time of launch of GST, it was widely speculated that the work in GST era is going to be decreased substantially. However this expectation has been vastly belied.

Currently Range Officers are having enormous work pressure, mainly owing to some of the following items of work:

1) GST filer/non-filer check (In respect of non-filers, although the SCNs are issued in bulk, the adjudication is required to done individually based on individual case-wise compliances)

2) Various reports of different hues and columns called for by different authorities/Directorates.

3) GSTR 1 vs GSTR 3B mismatch

4) ITC reconciliation

5) Cancellation of Registration (Suo-Moto cancellation of Non-filers beyond 6 month period requires immense monitoring and checking)

6) Giving reasons for shortfall in revenue (practically not possible without approaching the TPs and recording their verbal communication for submission to higher formations)

7) Revocation of cancellation verification report including No Due certificate.

8) Action against an unregistered Tax Payer consequent to TPs being permitted to file cancellation of registration and as per current instructions cancellation of registration happens without recovery of dues which are then required to be recovered subsequently.

9) DGARM related reports and compliance.

10) Revenue augmentation drive

11) Scrutiny of returns

12) ST3 pending scrutiny

13) Service Tax verification of Third party information

14) Arrear recovery

15) Audit SCN and para-wise comments (not Range work per se, but loaded)

16) Processing amendment of registration and change of mail id/mobile number from their users. (Though this appears not a complicated task, but the system caters this job poorly and hapless TPs frequently continue to visit Ranges or calling over phone as the raising of tickets on Grievance portal often leads to stereotype resolution to contact jurisdictional officer although RO has no facility to resolve the issue.)

17) Investigation/verification in respect of ITC fraud, Registration fraud, etc.

18) Verifications in respect of Risky exporters.

19) Issuing a certificate under seal for the assessees who were issued SVLDRS 3 but could not /did not pay the amount under proper link provided but made the payment through general payments (and thus exposing them to remain vulnerable to any future fraud).

20) Answering to queries of TPs in person or over phone.

21) Answering the higher ups over phone or attending meetings from time to time for ‘assessment of performance’.

22) Preparation of data for such meetings and also whenever ACs have to attend meeting with their higher ups.



All the above works get more compounded and complicated due to:

i. the un-manageable number of Tax Payers in many of the Ranges;

ii. non-distribution of the Tax Payers in any uniform pattern even within the CGST Ranges;

iii. non-existence of proper infrastructure and manpower (to the extent that NOT EVEN ONE INSPECTOR IS AVAILABLE IN SEVERAL RANGES);

iv. The system being very slow and poor when compared to that of the GST of State/UT where their back end provides them with a 360% view of any TP (with end to end data) within minutes of accessing the information; and

v. Additional charges given to the Superintendents of other Ranges/formations and/or also as AOs.




ANNEXURE B

(Suggestions to improve performance and efficiency 

and decrease wastage of man-power in Range work)

1) The value declared in the GSTR 3B should be auto-populated from the net taxable value (i.e after any corrections) from GSTR1.

2) Necessary columns should be added to the Annual Returns to enable the system to auto calculate the interest amount along with the liability, if any past dues or ineligible ITC is declared in the GSTR3B or the Annual returns. The Annual return should be permitted to be filed only after payment of liability along with interest. (Income tax returns already have this facility).

3) Whenever a Return is not filed within a due date, the system itself should be envisaged to send bulk SMS/EMAIL to the Tax Payers.

4) Generation of reports also should be made properly automated so that every time for each data the Ranges should not be disturbed. With the levels of computerisation achieved, this should be a primary pre-requisite.

5) The GSTN and private soft wares (though subscription based) are already available to the taxpayers for matching/for analysis of discrepancies but there is no such mechanism available with the Departmental officers. Such access should be provided by the GSTN to the Departmental Officers also. The GST back end of the States and UTs provide them with a 360% view of any TP (with end to end data) within minutes of accessing the information.

6) There are so many Returns in GST like GSTR-1, GSTR-2A, GSTR-3B, GSTR-9, GSTR-9C etc. and all of these contain lot of tables/columns/rows. Moreover e-way bill data is also there. It is very difficult and time consuming to reconcile all these Returns. Therefore System based matching/data analysis by GSTN with access at Range/field officer level is required.

7) There are many differences in Return filing Procedures if compared with Central Excise/Service Tax era because in that era only 2 ST Returns per year and maximum 12 CE Returns were there for any Financial Year. Even the revised return could be filed within 90 days. But in GST era there are so many returns and amendment is possible till September of next financial year (if time limit not extended). What is more cumbersome is that the amendment is possible through Debit/Credit Notes and through many tables of GST Returns. Even the entries in GSTR-2A are fluctuating depending upon the GSTR-1s filed by the suppliers. System based analysis of Data is the only solution.

8) Taxpayer are able to download year wise data of 3Bs, 2A, 3B vs 1M/Q etc in tabular form. Similar facility should be provided to departmental officers also since the departmental officers are at present required to submit month-wise request for GSTR2A that too separately for B2B, ISD, Import, etc.

9) Towards improving the IT back end in our department, this Association had vide its Ref. No. 01/RS/2019 dated 04.03.2019 addressed to the Revenue Secretary, with copy marked to the Chairman and Member (IT) of the Board and DG Systems, given elaborate suggestions. It is learnt that till date, they have not been addressed.

Hence, for completion of the work for the past period, the GSTN back end should be enabled to create the data sheets in the attached format so that computation and issue of SCNs will be quickened as a result of which not only precious manpower will be saved, but revenue will also be generated. 

 

6 comments:

  1. Under Section 73 and 74 of CGST Act also Superintendent is prescribed as proper officer.

    But, Adjudication is divided as per monetary limit.

    That's way even if the Superintendent is prescribed as proper officer for scrutiny it means all officers above the rank of Superintendent also the proper officer for scrutiny of returns.

    ReplyDelete
  2. Mark all letters to the Finance Minister also.

    ReplyDelete
  3. Sir, please update the status of re-designation of Superintendents issue

    ReplyDelete
  4. One day Insprs will be Commissioners,but not now.Due to RR of Insprs to Supdts in 2yrs as happened in Bhubaneswar Com Zone and other Zones

    ReplyDelete
  5. First , the association try to get NFUG for Supdt completing 4 years in normal course of service in Chennai, madurai, tvl.

    ReplyDelete

Please leave your Name, email and phone number so that we can get in touch with you for any clarification.

Congratulations, celebrations and retrospection.

 Dear Member and Friends, Hearty Congratulations to all the Superintendents who are promoted as Assistant Commissioners in the order dated 1...