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January 20, 2021

CBIC to set up large assembly of lawyers to fight increasing GST litigations

by CA Shivam Jaiswal in GST

CBIC to set up large assembly of lawyers to fight increasing GST litigations

The Central Board of Indirect Taxes and Customs (CBIC) is a part of the Department of Revenue under the Ministry of Finance, Government of India. It deals with the tasks of formulation of policy concerning levy and collection of Customs, Central Excise duties, Central Goods & Services Tax and IGST, prevention of smuggling and administration of matters relating to Customs, Central Excise, Central Goods & Services Tax, IGST and Narcotics to the extent under CBIC’s purview.

CBIC is facing a new challenge, apart from collecting more taxes and prompting people to comply with the tax law. The new challenge is the increasing number of litigations, especially related to Goods & Services Tax (GST). CBIC is now gearing up to put in place a large battery of lawyers to fight the increasing number of litigations, related to Goods & Services Tax (GST).

One of the key objectives to be achieved with the introduction of GST was to reduce litigation. GST as it is being perceived by industry, is falling short of success on a core parameter for judging tax reforms i.e., reduced litigation.

Despite efforts of the government and commitments, GST law has witnessed many litigations and disputes from its implementation stage to the introduction of e-way bill system. Problems related to transition issues, non-filling of returns, refunds of taxes, export and import duties and complexities, penalties, e-way bill structures, Advance Rulings and related to many more areas are still under litigations and creating a scope for future dispute and litigations. A few areas where the maximum litigations were filled are transitional input credit of various cheeses imposed prior to the introduction of GST, anti-profiteering, transitional credit, e-way bills etc.

CBIC in a communication to Principal Chief Commissioners, Chief Commissioners, Principal Director Generals and Director Generals said that it was deliberated that an increasing number of petitions related to GST and other taxation as well as policy matters were being filed before High Courts. Further, there is a growing trend of approaching High Courts directly, sometimes even against issue of summons, thereby bypassing the statutory appellate mechanism.

Further, it was mentioned that, for proper representation and defence, it was deliberated that the Department of Revenue should have a larger pool of resources in terms of a greater number of Counsels to appear in High Courts.

All the officials were urged to recommend more Senior and Junior Counsels for handling cases of indirect taxation pertaining before High Courts and other forums. The letter clearly says that names already recommended should not be sent again. Also, new names should be forwarded by March 31.

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