“We want to provide faceless assessment for companies under the CGST system. This does not need GST Council approval as we are planning to do it only for the CGST registrations. We are not going to force this on states. Later, if the system works well, states can take it up,” a finance ministry source said, requesting anonymity.
The move aims to address a key administrative problem faced by large businesses with operations spread across multiple locations, which have to deal with notices, hearings and orders from different CGST jurisdictions, sometimes even within a state for the same entity.
Under the GST architecture, a business generally needs a separate registration in every state where it operates. The registration is then assigned to either the central or state tax administration. The Centre and states broadly share the registration base between themselves. Large businesses can also have multiple GST registrations within the same state for different sectors in which they operate, such as power and technology.
A second official said there are currently around 6.5 million GST registrations under the CGST administration. Of these, around 330,000 registrations under the central tax administration are currently dealing with more than one CGST jurisdiction, the official said, adding that all 6.5 million registrations will be offered faceless assessment.
The proposed system would draw from the success of faceless assessment used in income tax and Customs to reduce direct interaction between taxpayers and individual officers.
The government expects the unified mechanism to reduce duplication when the same company is audited by multiple central GST jurisdictions.
After finalising the architecture, the finance ministry will put it up for public discussion before implementation. “We want it to be practical for businesses. We hope to put it out for public consultation by December. Ideally, such changes should kick in from the new financial year beginning April 1,” the second official added.
Experts pointed out that reducing physical interface between taxpayers and GST authorities can happen across multiple processes, spanning registration, amendments to certain taxpayer information, audits and refund claims.
“Faceless interaction between businesses and GST authorities will significantly benefit taxpayers as it will reduce the time taken to ensure compliance and enable businesses to focus on their business activities,” said M S Mani, partner, Deloitte.
(Inputs from Gireesh Chandra Prasad)
