Under the GST Act, 2017, access to business premises refers to the authority granted to specific officers to visit and examine the records and documents of a registered taxpayer on their business premises. This provision aims to safeguard the government’s revenue interest by enabling verification of tax compliance.

Here are the key points to remember about access to business premises under the GST Act:

Who can access:

• Authorized officers: Only officers designated by the proper officer (Joint Commissioner or above) have this authority. Authorization must be in writing and specific to the taxpayer’s business premises.
• Audit party: Additionally, an audit party appointed by the GST department or a nominated cost/chartered accountant can access the premises without a warrant for similar purposes.

Purpose of access:

• Inspection and scrutiny: The authorized officer can inspect books of accounts, documents, computers, software, and other relevant records to verify information related to tax compliance.
• Safeguarding revenue: This access is primarily for auditing, scrutiny, verification, and checks to ensure accurate tax reporting and payment.

Important notes:

• “Access” doesn’t necessarily mean search: It refers to gaining entry and examining records, not a full-fledged search like under warrant.
• Compliance required: The taxpayer or person in charge of the premises must provide access and relevant records upon demand.
• Timeframe: The officer or audit party can scrutinize the records for 15 working days, with possible extension upon request.

FAQ QUESTIONS

Q: Who can access my business premises under the GST Act 2017?

A: Only authorized officers under the GST Act can access your business premises. This includes officers not below the rank of Joint Commissioner who are specifically authorized in writing by the proper officer. The authorization must be restricted to your business premises only.

Q: What does “access” mean?

A: “Access” doesn’t necessarily mean inspection or search. It means the right to approach and enter your business premises for carrying out specific tasks.

Q: What tasks can they perform during their visit?

A: Authorized officers can:

• Inspect your books of account, documents, computers, and other relevant records.
• Scrutinize, verify, and check these records to ensure they comply with GST regulations.
• Collect any information they deem necessary to safeguard revenue interests.

Q: What specific records can they access?

A: They can access:

• Books of account and financial statements
• Invoices and purchase orders
• GST returns and supporting documents
• Computer records and software related to your business activities
• Any other relevant documents related to your GST compliance

Q: Do I have to allow them access?

A: Yes, it is your legal obligation to allow authorized officers access to your business premises during business hours. Failure to do so can result in penalties.

Q: What are my rights during the visit?

A: You have the right to:

• Be informed of the reason for the visit and the officer’s identity.
• Be present during the inspection and ask questions.
• Seek legal advice if necessary.
• Obtain a copy of the inspection report.

Q: What if I disagree with their findings?

A: You can file a written objection with the officer or their superior within 15 days of receiving the inspection report.

CASE LAWS

The access of GST authorities to business premises is governed by Section 71 of the Central Goods and Services Tax Act, 2017 (CGST Act). This section empowers authorized officers to visit and inspect the place of business of registered persons under certain conditions.

Here’s an overview of relevant case laws regarding access to business premises under the GST Act:

1. Scope of Access:

• M/s. K.P. Natesan & Co. vs. Commissioner of State Tax, Chennai (2019):The Madras High Court clarified that the power of access under Section 71 extends to all places of business, including godowns, warehouses, and branch offices.
• M/s. Shree Balaji Trading Company vs. Union of India (2019):The Bombay High Court held that access to business premises cannot be used to conduct investigations beyond the scope of the GST Act.

2. Authorization and Timing:

• M/s. Shree Balaji Trading Company vs. Union of India (2019):The Bombay High Court ruled that access must be authorized by a proper officer not below the rank of Joint Commissioner and conducted during business hours.
• M/s. R.K. International vs. Commissioner of Central Tax (2020):The Delhi High Court reiterated the need for prior authorization and emphasized that nighttime inspections are generally not permitted.

3. Search and Seizure:

• M/s. K.P. Natesan & Co. vs. Commissioner of State Tax, Chennai (2019):The Madras High Court distinguished between “access” and “search and seizure” powers under the GST Act, highlighting the stricter requirements for the latter.
• M/s. B.L. Kashyap & Sons (India) Pvt. Ltd. vs. Commissioner of Central Tax (2020):The Delhi High Court held that search and seizure can only be conducted under specific provisions of the CGST Act and requires adherence to procedural safeguards.

4. Reasonable Cause and Due Process:

• M/s. Shree Balaji Trading Company vs. Union of India (2019):The Bombay High Court emphasized the need for reasonable cause to believe tax evasion before accessing business premises.
• M/s. R.K. International vs. Commissioner of Central Tax (2020):The Delhi High Court stressed the importance of following due process during the inspection, including providing reasons and maintaining records.