Month: September 2017

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Which are the places of business / premises which can be inspected by the CGST officer under this section?

CGST officer authorized by the proper officer not below the rank of Joint Commissioner shall have the powers to carry out inspection of any of the following places / premises:
(a) any place of business of a taxable person;
(b) any place of business of a person engaged in the business of transporting goods;
(c) any place of business of an owner or an operator of a warehouse or godown;
(d) any other place

(ICAI FAQ PUBLICATIONS : – 06-09-2017 -INSPECTION, SEARCH, SEIZURE AND ARREST  : FAQ NO.5)

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Who can authorize the act of carrying out ‘Inspection’ and under what circumstances?

As per Section 67(1), Inspection can be carried out by any officer of Central tax only upon a written authorization in Form GST INS-01 given by a proper  officer not below the rank of Joint Commissioner. Such proper officer can give such authorization only if he has reasons to believe that the person concerned has–
(a) suppressed any transaction of supply;
(b) suppressed stock of goods in hand;
(c) claimed excess input tax credit;
(d) contravened any provisions of this Act or rules made there under to evade tax;
(e) a transporter or an owner or operator of a warehouse or godown or any  place, has kept goods which have escaped payment of tax or has kept his
accounts or goods in a manner that is likely to cause evasion of tax.

(ICAI FAQ PUBLICATIONS : – 06-09-2017 -INSPECTION, SEARCH, SEIZURE AND ARREST  : FAQ NO.4)

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What is the meaning of the term “Seizure”?

  1. In Law Lexicon Dictionary, ‘seizure’, is defined as the act of taking possession of property by an officer under legal process.
  2. It generally implies taking possession forcibly contrary to the wishes of the owner of the property or who has the possession and who was unwilling to part with the possession.

(ICAI FAQ PUBLICATIONS : – 06-09-2017 -INSPECTION, SEARCH, SEIZURE AND ARREST  : FAQ NO.3)

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What is the meaning of the term “Inspection”?

It is a softer provision than search to enable officers to access any place of business of a taxable person and also any place of business of a person engaged in transporting goods or who is an owner or an operator of a warehouse or godown.

(ICAI FAQ PUBLICATIONS : – 06-09-2017 -INSPECTION, SEARCH, SEIZURE AND ARREST  : FAQ NO. 2)

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What is the meaning of the term “Search”?

  1. The term ‘search’, in simple language, denotes an action of a government machinery to go, look through or examine carefully a place, area, person, object etc. in order to find something concealed or for the purpose of discovering evidence of a crime.
  2. The search of a person or vehicle or premises etc. can only be done under proper and valid authority of law.

(ICAI FAQ PUBLICATIONS : – 06-09-2017 -INSPECTION, SEARCH, SEIZURE AND ARREST  : FAQ NO. 1)

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How are the expenses of audit determined and paid?

The expenses of, and incidental to, the examination and special audit of records under Section 66(1), including the remuneration of such chartered accountant or cost accountant, shall be determined and paid by the Commissioner and that such determination shall be final.

(ICAI FAQ PUBLICATIONS : – 06-09-2017 -SPECIAL AUDIT : FAQ NO. 13)

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Is the taxable person relieved from audit under Section 66 if the accounts of the taxable person have already been audited under any other provision of this Act or any other law?

The provision of Section 66(1) shall have effect notwithstanding that the accounts of the taxable person have been audited under any other provision of this Act or any other law for the time being in force or otherwise.

(ICAI FAQ PUBLICATIONS : – 06-09-2017 -SPECIAL AUDIT : FAQ NO. 12)

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What is the time limit to submit a report of the audit?

  1. The Chartered Accountant or Cost Accountant nominated to conduct the audit under Section 66, shall submit a report, within a period of 90 days from the date of communication in writing by an officer not below the rank of Assistant Commissioner to get the audit of records of such registered person.
  2. The said period of ninety days can be extended by another period of 90 days on an application made in this behalf by registered person or the Chartered Accountant or Cost Accountant or for material and sufficient reason.

(ICAI FAQ PUBLICATIONS : – 06-09-2017 -SPECIAL AUDIT : FAQ NO. 11)