Those not filing GST returns may face attachment of property, bank accounts

Those not filing GST returns could face attachment of their properties, including bank accounts, by tax officials. 

According to the standard operating procedure (SoP) issued by the Central Board of Indirect Taxes and Customs (CBIC), the GST commissioner may resort to provisional attachment under the section 83 of the Central GST Act.

Subsequently, he may also cancel registration in cases where the return has not been furnished for a "specified" period, according to the SoP. The duration of the specified period is yet to be decided.

Under the section, the commissioner can attach any property, including bank account of assessees. For this, he needs to pass an order in the specified form to that effect mentioning the details of property which is attached.

However, experts say that under the pre-GST state-level value added regime, cancellation of registration rarely happened. Tax officials used to make the registration dormant in case of non-filing of returns for more than one year. As such, cancellation of registration is too harsh under SoP, they said. 

The SoP was issued to adress the issue of divergent practices being followed by the tax department of the Centre and states in case of non-furnishing of GST returns. 

Under it, a clarification was issued to ensure uniformity in respect of the appropriate procedure to be followed in case of non-furnishing of returns. 

SoP clarified that the notice to a defaulter is to be issued in GSTR-3A and no separate notice is required to be issued for best judgment assessment. 

The circular says that a system-generated message will be sent to registered persons three days before the due date to nudge them to file returns and the notice in GSTR-3A will be issued five days after due date of furnishing returns.

"Having a standard procedure in department initiated proceedings is always good, as it leaves no room for divergent practices or any personal bias,” said Harpreet Singh, Partner, KPMG.