The Supreme Court has directed the GST Council to recommend to all the States, implementation of document identification number (DIN) on all notices sent by State GST Officers. It has also asked all States to implement this at the earliest.

While Karnataka and Kerala have already implemented the system for electronic (digital) generation of a DIN in the indirect tax administration, now Andhra Pradesh has issued instructions to implement this. Earlier, Central Board of Direct Taxes (CBDT) introduced DIN in communication. Now, experts feel a similar mechanism in indirect tax will bring in transparency.   

Giving judgement on a Public Interest Litigation (PIL), a division bench of Justices MV Shah and BV Nagarathna said, “We dispose of the present writ petition by directing the Union of India/GST Council to issue advisory/instructions/ recommendations to the respective States regarding implementation of the system of electronic (digital) generation of a DIN in the indirect tax administration, which is already being implemented by Karnataka and Kerala.” 

For transparency, accountability

Further, the bench also impressed upon the concerned States to consider implementing the system for electronic (digital) generation of a DIN for all communications sent by the State Tax Officers to taxpayers and other concerned persons so as to “bring in transparency and accountability in the indirect tax administration at the earliest.“ This is second major ruling in GST by the apex court, after it directed to reopen GST portal for filing claims of transitional credit.

The bench said the GST Council could also issue advisories to the States for implementation of the DIN system, which shall be in the larger public interest for efficient governance. It noted that even the Central Government has implemented the DIN system of Central Board of Direct Taxes, and on and from October 1, 2019, every CBDT communication will need to have DIN.

’Need of the hour’

Commenting on the ruling, Pawan Arora, Partner with Athena Law Associates says implementation of DIN in the State Tax Department is need of the hour. It will bring accountability of the State Tax Department as well especially when in GST they are at common platform with Centre. “DIN is also helpful for bringing transparency in adjudication proceedings,” he ssaid.

Saket Patawari, ED (Indirect Tax) at Nexdigm said that DIN generation shall bring more transparency in communication from tax authorities’ side especially when a lot of notices/enquiries are sent through non-office email-ids. “Gearing up on the technology infrastructure and training officers to correctly generate DINs could be a big challenge for state authorities. They may leverage upon the learnings from CBDT to incorporate this healthy practice. Hope to see all the State Governments adopt this practice,” he said.

Abhishek Jain, Partner, Indirect Tax, KPMG aid that CBDT had implemented DIN on all communications made by income tax officers a while back to ensure better transparency. “This SC order directing the GST Council to issue instructions to other states (apart from Karnataka and Kerala) to implement DIN system will be much appreciated by the industry at large, and if successfully implemented, will go a long way in facilitating transparency and ease of doing business,” he said.