What is DIN system?
DIN system refers to the Documentation Identification Number system that came into effect from 8th November 2019. This system is introduced by the Central Board of Indirect Taxes (CBIC) as per the direction of the Finance Minister.
DIN system has already been implemented by the CBDT in the Direct Tax regime from October 1 this year.
It is a mechanism that would automatically generate a DIN for all the communication that is sent to the taxpayers.
Areas of DIN:
In the initial phase, DIN will be used mainly in the following areas related to the investigation:
- Search authorization,
- arrest memo,
- inspection notices and
- letters issued in the course of any enquiry.
However, it is expected that by the end of the year 2019, this system would be extended to all communications.
Effects of non-quoting of DIN:
From 8th November, it is mandatory for all CBIC communications to have DIN quoted in the body of the document. No communication shall be issued by the tax officials without DIN until and unless it is mentioned under exceptional circumstances.
If any communication is made without a computer-generated DIN, then it would have the following consequences:
- The communication will not be treated as a valid communication,
- The communication will be deemed to have never been issued.
In case of exceptional circumstances, if any communication is issued without DIN, then:
- the reason of issuing such communication is required to be mentioned,
- written approval of the competent authority must be obtained within 15 days of issuing such communication.
Exceptional circumstances may include the following situations:
- Absence of technical facility required to generate DIN electronically,
- the communication has to be sent urgently,
- the communication needs to be issued at short notice.
Benefits of DIN System:
This system brings with itself a number of benefits to protect the interest of taxpayers under the indirect tax administration. Some of the benefits include:
- Increase in transparency and accountability.
- Taxpayer can verify the genuineness of the communications digitally by visiting CBIC’s website.
- Audit of such communication can be easily done online.
- Taxpayers can track the tax officers who have issued a communication.
- Taxpayers can easily communicate with the tax authorities.
- Honest taxpayers will be protected from harassment.
- Only authorized officers can generate CBIC-DIN from the utility developed by the DDM hosted on the CBIC’s online portal.
- Decrease in corruption.
- Communication that does not follow the guidelines prescribed by the CBIC will not be accepted.
Format of DIN:
The DIN will be generated in the following format:
CBIC-YYYY MM ZCDR NNNN, where,
yyyy stands for the year and MM for the month in which DIN is generated.
ZCDR refers to the Zone Commissionerate Division Range Code,
NNNN is the 6 digit alphanumeric code generated by the system automatically.