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August 27, 2021

Suggestion to implement document identification number (DIN) system in Karnataka GST

by CA Shivam Jaiswal in GST

Suggestion to implement document identification number (DIN) system in Karnataka GST


Respected Madam,

The Karnataka State Chartered Accountants Association (R) (in short KSCAA’) is an Association of Chartered Accounts, registered under the Karnataka Societies Registration Act, in the year 1957. KSCAA is primarily formed for the welfare of Chartered Accounts and represents before various regulatory authorities to resolve the problems / hardships faced by Chartered Accountants and business community.

At the outset, we wish to place on record our sincere gratitude and congratulate to your good selves and to all other officers of your Department working across the Sta. for their sincere efforts in successfully steering the implementation of this GST Law which is still at a nascent stage albeit it is currently overshadowed by initial teething troubles and challenges being faced by not only the tax officers but also the taxpayers. With constant consorted efforts of the GST council and all the States, we sincerely anticipate that the nation should be able to weather these short term initial challenges, but in the long run our country would definitely derive massive benefits from unlocking of value by successfully implementing this mammoth GST Law in our country of ginormous size.

We have seen far-reaching and sweeping changes in the Indirect Tax arena ever since the GST Law was introduced on 1st July, 2017. Like any new legislation, GST legislation is also evolving over time and has so far made significant progress by bringing in the ease in the compliance process by tax payers, especially the MSMEs and it has also heralded greater accountability and transparency regime in the administration of this law by Tax department.

On the anvil of bringing in Accountability and Transparency in the tax administration through its officers, one very significant and historical step which was taken by CBIC was, its decision to implement Document Identification Process (DIN) IT system backbone and concomitant enabling process, which was unveiled though issuance of Circulars under section 168(1) of CGST Act, 2017 namely Circular No. 122/41/2019-GST dated 5th November, 2019 followed by Circular No. 128/47/2019 dated 23rd December, 2019. These circulars provided for Generation of DIN by officers of the Central tax on online portal “www.ccicddm.gov.in’ and also brought in a mandatory requirement of quoting DIN so generate. on the face of various notices, summons. letters, etc. issued by officers of the Central tax to tax payers and other concerned persons. This decision was taken by CBIC to leverage on the benefits of technology for bringing in greater accountability and transparency the working of tax officers especially in the process of generating various notices, letters, e.. by the tax officers directed towards taxpayers/other concerned persons. We applaud this noble initiative of CBIC which the entire nation, the tax payers, tax payers and other stakeholders would be pleased to welcome and it would act as a measure for building trust between tax payers and the revenue. This would also go a long way in curbing spurt of fake/unauthorized notices which could be issued by persons with tainted intentions.

However exception to states like Kerala, the DIN system and related process as discussed above is implemented and is fully operational only in Central GST offices and many states including Karnataka State has not yet implemented this system. When it is viewed from perspective of lay tax payers the country, it sounds weird and a thing difficult to conceive as to why such divergent and inconsistent practices and paths are being followed by Central and State GST offices when GST is a uniform law as propounded by Government right from the outset on the narrative of “One Nation One Tax.”. A question could also arise for not implementing DIN process so far, whether State tax department. do not appreciate the risks involved in the absence of such a system being operational. While a similar circular was ideally envisaged from all the States, only few States such as Kerala have followed the suit and implemented this DIN system. To align with the GST promotional narrative “One Nation One Tax. as mooted by our Hon’ble Prime Minister Shri Narendra Modi, it is important that the requirement of DIN should be made enforced for both Central officers and State officers of GST.

  • We would wish to reproduce the key benefits of DIN process, as espoused in above referred CBIC circulars:
    • Greater accountability and transparency.
    • Authenticity and genuineness of the documents.
    • Creation of a digital directory for maintaining a proper audit trail of communications sent to / received by tax payers.
  • Harmonization and standardization of the forma. of search authorizations, summons, arrest memos, inspection notices etc. issued by the GST formations across the country.

In case the DIN is not found to have mentioned on the notices, letters, etc. of the state departments, the taxpayers have the tendency of resorting to filing RTI petitions seeking the confirmation of authenticity of the source of such communications being received by them and that may eventually also lead to filing of complain. on the CPGRAM portal which ultimately reaches up to the Tax department for resolution of such queries. As a matter of fact, it is the right of the taxpayers to know whether the communication as received by them is really from a genuine and authentic source and whether they are obligated to act on the same. We live in Information Technology and Internet era where miscreants and fraudsters always try to find novel ways and means of sending misleading communications to their target. with the intention to defraud them. We may not rule out the chances of such persons personating tax officers with such tainted intentions to defraud innocent tax payers of our nation and it becomes all the more important for the State tax departments to appreciate the possible unwanted negative consequences of not having mitigating strategies in place against type of identified Risks in its sovereign tax administration function. Therefore the State tax department should consider implementation of DIN process similar to how CBIC has implemented it to pre-empt the negative consequences arising from such risks for the benefit of both tax payers and self.

For tax department well, the DIN process would provide immense help and aid in tracking various communications being sent by its officers to tax payers under various provisions of the statute including identification of communications sent are under incorrect/invalid sections or without indicating the section under which such communications are being sent DIN process could there act as an additional supervisory tool for the department whereby the officers could easily monitor the performance of their reporting subordinate officers in order to take corrective steps where situations so warrant.

In the light of above discussions, we may apprise your good selves that implementing DIN system in Karnataka will not only protect the rights of the taxpayers but also help the GST Department to maintain a proper track of summons/notices etc. sent to tax payers. This will create a win-win situation for both sides. At this juncture, we would like to draw your kind attention to similar systems having been already implemented and fully operational by the Central Board of Dire, Taxes (Income Tax Department), Institute of Chartered Accountants of India (ICAI) etc. and it has been immensely helping derive its benefits by all the stakeholders involved in the process. In fact, the Income Tax Department even came up with a promotional video with a message – “Throw Notices in Garbage, if they do not possess DIN...

Your good selves may kindly appreciate that the Circulars issued by CBIC, in their true spirit were introduced for implementation of DIN process for the entire nation, alas, due to the federal structure of our Constitution and separate GST legislations having being passed at Centre and State, the purpose of having DIN process could be left not served, unless State Departments comes on board and take necessary steps to implement DIN process by using the vested power for issuing circulars, instructions, etc. as conferred on the Commissioner under section 168 of the Karnataka GST Act 2017.

Our Representation:

We at KSCAA besiege to your good selves to kindly take cognizance of the merits of deploying DIN process as described by us herein above and implement the same as one of the significant and key part in the administration of GST law in the state of Karnataka. This step should go a long way in enhancing the trust and co-operation between the State tax Department on the one hand and the taxpayers on the other hand. We are optimistic that your good selves would definitely make an ‘all out’ effort to ensure that the necessary steps are being taken in the implementation of DIN process in Karnataka state very soon in the near future.

Yours sincerely,

For Karnataka State Chartered Accountants Association

CA. Kumar S Jigajirmi ( President )               

CA. Pramod Srihari ( Secretary )                      

CA. Ganesh V Shandage( Chairman ) Representation Committee

Copy to –

  • Shri. Basavaraj Bommai, Hon’ble Chief Minister and Finance Minister, Government of Karnataka
  • Smt Nirmala Sitaraman, Hon’ble Union Minister for Finance, Government of India
  • Shri. M Ajit Kumar, Chairman – Central Board of Indirect Taxes and Customs

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