Inspection Process under GST

What is the circumstance when the inspection takes place under GST?

Under GST, a joint commissioner or an officer of higher rank can carry out GST inspection procedure if he/she has reason to believe that the taxpayer has done the following thing to evade tax:

1. Hidden any transaction of supply
2. Hidden stock in hand
3. Availed ITC (Input Tax Credit) in excess
4. Contravened any of the GST provisions
5. Maintaining books of account to evade tax
6. Any warehouse operator or transporter hiding goods without paying GST on them

In such a case the joint commissioner or any other officer of higher rank can authorize any person to inspect places of businesses of through furnishing FORM GST INS-01:

1. the taxpayer or
2. Warehouse operator or
3. the transporter

The officer can also inspect any other place if he/she deems fit.

Do an officer needs to mention a reason to believe in writing before issuing an inspection order?

No, there is no such provision under the GST Act that says the officer needs to state the reason to believe before issuing any order. The amendment  Section 132(1) & (1A) of Income Tax Act also states that the person needs not to mention the reason to believe to any person or the Appellate Authority or any other authority.

Who and when can order search under GST?

The joint commissioner or any other higher rank officer can order search inspection under GST or if he/she has a “reasons to believe”. The order can be passed under GST when:

1. Goods that need to be confiscated
2. Any books of accounts or documents that are hidden which can be useful for proceedings

Moreover, in such a case the joint commissioner or any other officer of higher rank can authorize any person to search and seize the goods.