New rules introduced for taxpayers shifting business locations
What's the story
The Central Board of Indirect Taxes and Customs (CBIC) has announced a new procedure for taxpayers shifting their principal place of business. Under this, all ongoing tax proceedings will now be transferred to the new jurisdictional authority. The CBIC clarified that any action taken by the previous authority would remain valid even if the taxpayer moves to another tax jurisdiction.
Jurisdictional authority
New jurisdictional authority to take over proceedings
The CBIC clarified in a circular that the new jurisdictional authority will take over and proceed with all pending proceedings related to the taxpayer. This includes investigations, audits, show cause notices, and adjudications under the Central GST law. The board said any action or proceeding undertaken by the tax officer having jurisdiction over the registered taxpayer on that date (transferor jurisdictional authority) would remain valid even if they later shift to another tax jurisdiction (transferee jurisdictional authority).
Transfer responsibilities
Transferee authority will act on earlier valid action
The CBIC further clarified that the transferee jurisdictional authority will act on and proceed on the basis of such earlier valid action taken by the transferor jurisdictional authority, as if it had itself initiated the same. This is to ensure continuity in tax proceedings and avoid any disruption due to a change in business location. The board also addressed queries from field formations seeking clarification on this matter.
Further action
Guidelines for new jurisdictional authority
The CBIC has also issued guidelines for the new jurisdictional authority. If a fresh issue comes to light after the taxpayer has shifted, the tax officer should 'intimate' it to the new jurisdictional officer for further action. If a taxable person migrates during any action or proceeding initiated by the transferor jurisdictional authority, the transferee jurisdictional authority will take over and conclude from where it was at migration/transfer time.