Tax Practice, Procedure and Professional Ethics in Indirect Taxation
This domain tests how an indirect tax professional accepts work, verifies facts, advises on GST and customs positions, represents clients, and maintains ethical standards.
Engagement and due diligence
Professional work should begin with a written engagement letter defining scope, responsibility and fees. Before certifying a refund, GSTR-9C reconciliation or appeal, the professional must verify invoices, ledgers, returns, e-way bills, shipping bills and accounting records. Advice should cite the relevant section, rule, notification or circular and record the facts assumed. Oral assurances and undocumented assumptions are a recurring source of professional risk.
Representation and conduct
Appearance before GST and customs authorities is regulated by the Chartered Accountants Act, 1949 and the ICAI Code of Ethics. Independence, confidentiality, competence and avoidance of conflicts of interest are core duties. Touting, misleading advertising and sharing fees with non-members are prohibited. Fees should reflect the work, not the outcome of a tax dispute. Where a client proposes a position that is not supported by law, the professional should explain the risk, decline certification, and document the refusal.
Verification and certification
Certification must be based on actual verification, not merely client representations. For refunds and export documents, the professional should reconcile invoices, shipping bills, FIRC/BRC and GSTR-1. For customs valuation, underlying contracts, invoices, freight and insurance should be examined.
Worked example
A client asks for ITC on an invoice where goods were never received. Section 16 requires receipt of goods, and claiming credit would attract section 122 penalty and possible section 132 prosecution. The professional should refuse to certify, explain the statutory conditions, and record the advice in the file.
Traps
- Certifying without checking primary records.
- Accepting a success-fee arrangement in a tax appeal.
- Advising on the basis of an unverified oral circular or outdated notification.