Supreme Court wants states to make DIN mandatory for GST officers

The Supreme Court (SC) has directed the Centre and the Goods and Services Tax (GST) Council to issue advisory to states for implementing a digital system for all communication sent by GST officers to taxpayers. 

The move, if implemented, will bring in further transparency and accountability in the indirect tax administration and ensure that taxpayers are not harassed.

The central government had in October 2019 implemented electronic generation of Document Identification Number (DIN) for all communications made by income-tax officers to taxpayers. 

A DIN is a 20-digit identification code that is affixed to every communication sent to taxpayers by the government. 

At present, DIN is mandatory for every type of communication with the I-T department, be it a notice, a letter, an order, a summon, or any other correspondence. Without it, the document and communication will be deemed invalid.

The apex court observed, “It cannot be disputed that implementing the system for DIN for all communications sent by the state tax officers to taxpayers and other concerned persons would be in the larger public interest and enhance good governance.” 

The top court further said it will bring in transparency and accountability in the indirect tax administration, which are so vital for efficient governance.

The court noted that the Central Board of Direct Taxes (CBDT), the governing body for direct taxes had implemented DIN on all communications made by Income tax officers in 2019 to ensure better transparency.

However, in GST, only two states — Karnataka and Kerala —have implemented the system “which is laudable and to be appreciated,” it said.

“We impress upon the concerned states to consider implementing the system for generation of a DIN for all communications sent by the state tax officer to taxpayers and other concerned persons. This would bring in transparency and accountability in the indirect tax administration at the earliest,” the apex court said.

The top court was hearing a PIL filed by a chartered accountant, Pradeep Goyal, seeking steps to implement DIN for all communications sent by state tax officers to taxpayers.

The plea has sought direction to the GST Council to consider and take a policy decision in respect of implementing the system by all states.

It has also sought direction to the central government/Central Board of Indirect Taxes and Customs (CBIC) to introduce centralised DIN for the entire country.

“The apex court order directing the council to issue instructions to other states to implement DIN will be much appreciated by the industry at large. If successfully implemented, it will go a long way in facilitating transparency and ease of doing business,” said Abhishek Jain, partner – (indirect tax), KPMG India.

A bench of Justices M R Shah and B V Nagarathna had, in early July, issued notices to the ministry of finance, CBIC, GST Council and others, seeking their replies on the plea.