FM Sitharaman urges GST officials to provide clarity on classification-related issues

Finance Minister Nirmala Sitharaman has called upon goods and services tax (GST) officials to address classification-related concerns promptly. Speaking at the National Conference of Enforcement Chiefs of the State and Central GST Formations, Sitharaman emphasized the importance of engaging with stakeholders to understand their issues, improve compliance, streamline processes, and enhance transparency and efficiency within the tax system.

GST rates are determined based on the classification of goods and services using harmonized system of nomenclature (HSN) codes, often leading to disputes and litigation. These issues are typically resolved through various judicial and quasi-judicial forums, including GST commissioners and courts. The Central Board of Indirect Taxes and Customs (CBIC) issues circulars and FAQs to clarify classification issues based on GST Council recommendations.

Sitharaman also stressed the use of technology to plug loopholes and provide better taxpayer services, advocating for the sharing of best practices and seamless coordination across states. The conference featured presentations on various topics, including a crackdown on fake registrations and bogus billing, resulting in the detection of significant tax evasion.

In related news, the Income-tax Department has urged taxpayers to file updated returns for the assessment year 2021-22 by March 31, using the annual information statement (AIS) to address mismatches between filed returns and third-party data. Non-filers are also encouraged to submit updated returns to ensure compliance.