Central GST may roll out faceless tax assessment system soon

The Centre is planning to introduce a faceless assessment system for taxpayers under the Central goods and services tax (CGST) over the next few months.

Borrowing from the faceless assessment system in the direct tax regime, a similar scheme is likely to be rolled out for CGST assessees in the next three to four months on a trial basis, sources said.

“This will help cut down the interface between the tax department and the taxpayer and will enable ease of doing business,” sources said.

The proposal will be limited to CGST and, therefore, will not require the approval of the GST Council. However, depending on its impact, states could also choose to adopt the system by taking the proposal to the GST Council at a later date.

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Under the proposed faceless assessment scheme, scrutiny assessments will be conducted online, with cases selected and assigned randomly to officers using artificial intelligence and technology. This is expected to reduce physical interaction between the tax department and the assessee.

The proposal comes at a time when the GST administration is seeking to reduce the compliance burden on taxpayers and move towards a more technology-driven process.

Meanwhile, sources indicated that the issue of multiple audits of businesses by the states and the Centre is unlikely to be taken up at the upcoming meeting of the GST Council on October 8.

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“This is a separate discussion taking place at the Central level. It will be discussed in the Council at a later date,” a source said, adding that proposals to bring greater uniformity to the adjudication process will be discussed by the Council at its meeting this week.

Under GST laws, businesses operating in multiple states have to obtain separate registrations even if they have a single Permanent Account Number (PAN). This often means that every state in which a business is registered conducts parallel audits, resulting in a significant compliance burden and concerns over differing interpretations by tax officials across states.