According to the GST Council, recurring show-cause notices should only be issued by jurisdictional tax authorities.
- According to the Goods and Services Tax (GST) Council, only so-called jurisdictional tax authorities are required to issue recurring show-cause notices to those under investigation, even if the initial notice is issued by another authority, which could be central or state officials.
- The clarification reduces the compliance burden for both tax authorities and taxpayers.
- While a taxpayer is subject to enforcement action by both the federal and state tax authorities, the council stated in an office memorandum dated October 19 that repeated show-cause notices should be issued by the actual jurisdictional tax authorities administering the taxpayer.
- If the authority that took the enforcement action but does not administer the taxpayer is also required to issue recurring show-cause notices, it will place an unnecessary burden on the investigating authority to keep track of the matter and collect records.