The Central Board of Indirect Taxes and Customs (CBIC) has guided their officials to not take any coercive action against assesses during search and seizure operations to recover Goods and Services Tax (GST) dues. It has also been instructed that if it occurs, the tax official may face disciplinary action.
The investigation wing has issued a detailed investigation outlining the dos and don'ts. This was done in response to reports of some taxpayers alleging use of force and coercion by officers during the course of a search or investigation after voluntarily depositing their GST liability. Some taxpayers have also approached the High Court in this regard.
The tax officer should, however, inform the taxpayers regarding the provisions of voluntary tax payments through DRC-03. There is no prohibition on taxpayers making voluntary payments based on the determination of their liability for non-payment/short payment of taxes prior to or at any stage of such proceedings.
According to the board, a taxpayer can deposit the tax voluntarily by submitting DRC-03 on the GST portal. Only the taxpayer can initiate such voluntary payments by logging into the GST portal with their login ID and password. It is permissible to pay taxes voluntarily prior to the issuance of a show cause notice.
This allows taxpayers to discharge their admitted liability, whether self-ascertained or determined by the tax officer, without having to bear the burden of interest for late payment of tax, and may also save him from a higher penalty imposed following the issuance of a show cause notice.