Detailed Explanation & Examples with case Laws of CGST Act, Section 1 to 6

“Unlock the intricacies of CGST Act Sections 1 to 6 with detailed explanations, examples, and case laws. Navigate the preliminary and administrative provisions for comprehensive insights.”

Detailed Explanation With Examples, Notifications, Case Laws of Part –I (Section 1 To 6) – Preliminary & Administration

Gain a thorough understanding of Part I (Section 1 to 6) of the Central Goods and Services Tax (CGST) Act, 2017. This article provides a detailed explanation, supported by examples, notifications, and relevant case laws. Dive into the preliminary and administrative provisions of the Act for comprehensive insights.

Section 1 of the CGST Act covers the short title, extent, and commencement provisions. It outlines the Act’s official name, its applicability throughout India, and the date of its enforcement. Understanding Section 1 is crucial to grasp the basic framework of the Act.

Moving on to Section 2, it provides definitions for various terms used in the CGST Act. These definitions are essential for interpreting and applying the Act correctly. The section is further supported by relevant rules, notifications, circulars, and case laws, which offer comprehensive insights into the definitions and their practical implications.

Additionally, Section 3 focuses on the officers appointed under the CGST Act. It establishes the hierarchy and roles of these officers in administering and enforcing the Act. This section is complemented by related rules and provides an overview of the appointment process and the responsibilities of different officer ranks.

Finally, Section 4 addresses the appointment of officers under the Act. It grants the government the power to appoint officers at various levels, ensuring the smooth functioning and enforcement of the CGST Act. Understanding this section helps taxpayers and stakeholders navigate the hierarchical structure of officers and their respective roles.

Section 5 and Section 6 of the Central Goods and Services Tax (CGST) Act, 2017 are provisions of Indian tax law. They outline the powers of officers appointed under the Act and the authorization of officers from the State tax or Union territory tax departments to act as proper officers under the CGST Act. These sections are specific to the Indian tax system and may not be directly applicable to other countries or jurisdictions.

1. SECTION 1 – SHORT TITLE, EXTENT AND COMMENCEMENT

(1) This Act may be called the Central Goods and Services Tax Act, 2017.

(2) It extends to the whole of India. 1[except the State of Jammu and Kashmir]

(3) It shall come into force on such date as the Central Government may, by 2 notification in the Official Gazette, appoint:

 Provided that different dates may be appointed for different provisions of this Act and any reference in any such provision to the commencement of this Act shall be construed as a reference to the coming into force of that provision.

1 Omitted vide the Central Goods and Services Tax (Extension To Jammu And Kashmir) Act, 2017 No. 26 of 2017 w.e.f. 8-7-2017, before it was read as, “except the State of Jammu and Kashmir.”

w.e.f. 8th July, 2017

2 Different sections were notified on different dates:-

> The provisions of sections 1, 2, 3, 4, 5, 10, 22, 23, 24, 25, 26, 27, 28, 29, 30, 139, 146 and 164 of the said Act came into force w.e.f. 22/06/2017-. Notification No. 1/2017 – Central Tax dated 19/06/2017.

> The provisions of sections 6 to 9, 11 to 21, 31 to 41, 42 except the proviso to sub-section (9) of section 42, 43 except the proviso to sub-section (9) of section 43, 44 to 50, 53 to 138, 140 to 145, 147 to 163, 165 to 174 of the said Act, came in to force w.e.f. 01/07/2017. Notification No. 9/2017 – Central Tax dated 28/06/2017.

> Section 51(1) has been notified with effect from 18th September, 2017 vide Notification No. 33/2017 Central Tax, dated 15/09/2017 with respect to persons specified under clauses (a) and (b) and the persons specified below under clause (d). Section 51 has been finally notified and made effective from 01/10/2018 vide Notification No. 50/2018 CT, dated 13/09/2018.

> Section 52 came into force with effect from 1st October 2018. Notification No. 51/2018 – Central Tax dated 13/09/2018.

> Date of Notifications of other sections have been provided in the foot notes of such section.

The Central Goods and Services Tax (CGST) Act, 2017 is a crucial legislation that governs the levy and administration of the central goods and services tax in India. A detailed overview of Section 1 of the CGST Act, including its explanation, relevant rules, notification, circulars, and case laws:

1. Explanation: Section 1 of the CGST Act, 2017 contains the short title, extent, and commencement provisions of the Act. It states that the Act may be called the Central Goods and Services Tax Act, 2017. The Act extends to the whole of India, including Jammu and Kashmir, and it came into force on July 1, 2017.

2. Relevant Rules: Along with the Act, various rules have been prescribed to facilitate the implementation and administer the CGST Act. Some relevant rules include:

a. Central Goods and Services Tax Rules, 2017: These rules provide detailed provisions on various aspects such as registration, invoicing, input tax credit, payment of tax, returns, refund, etc.

b. Central Goods and Services Tax (Registration and Turnover) Rules, 2017: These rules prescribe the criteria for registration under the CGST Act and determine the turnover limits for mandatory registration.

c. Central Goods and Services Tax (Refund) Rules, 2017: These rules lay down the procedures and conditions for claiming a refund of taxes paid under the CGST Act.

d. Central Goods and Services Tax (Payment of Tax) Rules, 2017: These rules govern the manner and time of payment of taxes under the CGST Act.

e. Central Goods and Services Tax (Input Tax Credit) Rules, 2017: These rules provide guidelines for availing input tax credit on inputs, capital goods, and input services.

3. Notifications: The government issues notifications under the CGST Act from time to time to bring about changes, prescribe procedures, or grant exemptions. Notifications may relate to rates of tax, amendments in rules, exemptions, or procedural requirements. It is essential to refer to the latest notifications issued under the Act for up-to-date information.

4. Circulars: The Central Board of Indirect Taxes and Customs (CBIC) issues circulars to clarify the provisions of the CGST Act and provide guidance on various issues. These circulars aim to bring uniformity and address queries related to the interpretation and implementation of the Act. They serve as important reference material for taxpayers and tax authorities.

5. Case Laws: Over time, various legal disputes related to the interpretation and application of the CGST Act have been brought before courts and tribunals. The judgments delivered by these authorities form an essential source of reference for understanding the legal implications of the Act. They provide precedents and insights into the judicial interpretation of the provisions.

It is important to note that the CGST Act, being a comprehensive legislation, comprises several sections covering diverse aspects of the goods and services tax. Each section, along with the relevant rules, notifications, circulars, and case laws, contributes to the overall understanding and implementation of the Act.

SECTION 2 – DEFINITIONS

Section 2 of the Central Goods and Services Tax (CGST) Act, 2017 provides definitions of various terms used throughout the Act. Understanding these definitions is crucial for the proper interpretation and application of the Act.  However, I have given earlier 138 pages of Definitions Under Section 2 of CGST Act, 2017- Detailed Analysis  on each definition is published in taxguru. A detailed overview of Section 2, including its explanation, relevant rules, notifications, circulars, and case laws:

1. Explanation: Section 2 begins with a comprehensive list of definitions that clarify the meanings of different terms used in the CGST Act. These definitions cover a wide range of concepts, including taxable persons, goods, services, supply, input tax, output tax, tax invoice, reverse charge, input service distributor, recipient, place of supply, and more. The explanations provided in this section help in interpreting the provisions of the Act correctly.

2. Relevant Rules: While Section 2 provides the definitions, various rules under the CGST Act further elaborate on the operational aspects related to these definitions. Some relevant rules include:

a. Central Goods and Services Tax Rules, 2017: These rules, as mentioned earlier, provide detailed provisions on registration, invoicing, input tax credit, payment of tax, returns, refund, etc., which are aligned with the definitions provided in Section 2.

b. Central Goods and Services Tax (Composition Rules) 2017: These rules explain the conditions and procedures for opting for the composition scheme, which is available to certain eligible taxpayers under the CGST Act.

c. Central Goods and Services Tax (Determinations of Value of Supply) Rules, 2017: These rules prescribe the methods and principles for determining the value of supply of goods or services for the purpose of levying tax under the Act.

3. Notifications: The government issues notifications under the CGST Act to provide further clarity or make specific provisions. Some notifications may modify the definitions provided in Section 2 or add new categories or exemptions. It is important to refer to the relevant notifications to understand any changes or additions to the definitions.

4. Amendments / Insertions:

Substituted for ―Central Board of Excise and Customs by The Finance Act, 2018 (No. 13 of 2018) – Brought into force w.e.f. 29th March, 2018

Substituted for ―Central Board of Excise and Customs by The Central Goods and Services Tax (Amendment) Act, 2018 (No. 31 of 2018) – Brought into force w.e.f. 01st February, 2019.

Substituted for ―the Appellate Authority and the Appellate Tribunal by The Central Goods and Services Tax (Amendment) Act, 2018 (No. 31 of 2018) – Brought into force w.e.f. 01st February, 2019.

Substituted for ―(h) services provided by a race club by way of totalisator or a licence to book maker in such club; and, by The Central Goods and Services Tax (Amendment) Act, 2018 (No. 31 of 2018) – Brought into force w.e.f. 01st February, 2019.

Omitted -(18) ―business vertical means a distinguishable component of an enterprise that is engaged in the supply of individual goods or services or a group of related goods or services which is subject to risks and returns that are different from those of the other business verticals, by The Central Goods and Services Tax (Amendment) Act, 2018 (No. 31 of 2018) – Brought into force w.e.f. 01st February, 2019

Substituted for ―clause (c) by The Central Goods and Services Tax (Amendment) Act, 2018 (No. 31 of 2018) –Brought into force w.e.f. 01st February, 2019.

Inserted by The Central Goods and Services Tax (Amendment) Act, 2018 (No. 31 of 2018) – Brought into force w.e.f. 01st February, 2019.

Substituted for ―(c) Dadra and Nagar Haveli; (d) Daman and Diu;‖ by The Finance Act, 2020 (No. 12 of 2020)–Brought into force w.e.f 30.06.2020

5. Circulars: The Central Board of Indirect Taxes and Customs (CBIC) issues circulars to address queries, provide clarifications, or offer guidance on the interpretation and implementation of the CGST Act. These circulars may relate to specific definitions used in Section 2 and provide practical insights and explanations for their application.

6. Case Laws: As legal disputes arise in relation to the interpretation of the definitions and their applicability in specific situations, courts and tribunals deliver judgments that serve as precedents. These case laws offer guidance on the correct interpretation and understanding of the terms defined in Section 2.

Hon’ble High Court of Madhya Pradesh, Bench At Indore Writ Petition No.8204/2020 (Smt. Kanishka Matta Vs. Union of India and Others) held that a conjoint reading of Section 2(17), 2(31), 2(75) and 67(2) makes it clear that money can also be seized by authorized officer.

Hon’ble High Court of Gujarat at Ahmedabad R/Special Civil Application No. 13238 Of 2018 with R/Special Civil Application No. 13243 of 2018 Material Recycling Association Of India Versus Union Of India & 2 other(s) held that It cannot be said that the provision of Section 13(8)(b) r.w. Section 2(13) of the IGST Act, 2017 are ultra vires or unconstitutional in any manner.

Hon’ble Supreme Court of India in Civil Appeal No. 1390 of 2022 Union of India & Anr Versus M/s Mohit Minerals Pvt. Ltd.  Held that On a conjoint reading of Sections 2(11) and 13(9) of the IGST Act, read with Section 2(93) of the CGST Act, the import of goods by a CIF contract constitutes an “inter-state” supply which can be subject to IGST where the importer of such goods would be the recipient of shipping service;

Hon’ble  SUPREME COURT OF INDIA, Civil Appeal No. 1390 of 2022 Union of India & Anr Versus M/s Mohit Minerals Pvt. Ltd.Held that On a conjoint reading of Sections 2(11) and 13(9) of the IGST Act, read with Section 2(93) of the CGST Act, the import of goods by a CIF contract constitutes an “inter-state” supply which can be subject to IGST where the importer of such goods would be the recipient of shipping service.

The impugned levy imposed on the ‘service’ aspect of the transaction is in violation of the principle of ‘composite supply’ enshrined under Section 2(30) read with Section 8 of the CGST Act. Since the Indian importer is liable to pay IGST on the ‘composite supply’, comprising of supply of goods and supply of services of transportation, insurance, etc. in a CIF contract, a separate levy on the Indian importer for the ‘supply of services’ by the shipping line would be in violation of Section 8 of the CGST Act.

Related Rule:  11, 56, 89

SECTION 3 – OFFICERS UNDER THIS ACT.

The Government shall, by notification, appoint the following classes of officers for the purposes of this Act, namely:––

(a) Principal Chief Commissioners of Central Tax or Principal Directors General of Central Tax,

(b) Chief Commissioners of Central Tax or Directors General of Central Tax,

(c) Principal Commissioners of Central Tax or Principal Additional Directors General of Central Tax,

(d) Commissioners of Central Tax or Additional Directors General of Central Tax,

(e) Additional Commissioners of Central Tax or Additional Directors of Central Tax,

(f) Joint Commissioners of Central Tax or Joint Directors of Central Tax,

(g) Deputy Commissioners of Central Tax or Deputy Directors of Central Tax,

(h) Assistant Commissioners of Central Tax or Assistant Directors of Central Tax, and

(i) any other class of officers as it may deem fit:

 Provided that the officers appointed under the Central Excise Act, 1944 (1 of 1944) shall be deemed to be the officers appointed under the provisions of this Act.

Section 3 of the Central Goods and Services Tax (CGST) Act, 2017 deals with the officers appointed under the Act. It outlines the hierarchy and roles of these officers in the administration and enforcement of the CGST Act. A detailed explanation of Section 3, along with the related rule:

1. Explanation: Section 3 establishes the structure and functions of officers under the CGST Act. It defines various categories of officers and their respective roles in the administration and enforcement of the Act. These officers are responsible for implementing the provisions of the Act, ensuring compliance, conducting audits, carrying out inspections, and taking necessary actions against non-compliance or tax evasion.

2. Related Rule: The relevant rule associated with Section 3 is Rule 3 of the Central Goods and Services Tax Rules, 2017.

This rule provides further details regarding the appointment and jurisdiction of officers under the CGST Act. It specifies the various ranks and designations of officers, their powers, and the areas or zones for which they are appointed. The rule also outlines the reporting structure and the powers of supervision and control exercised by higher-ranking officers over their subordinates.

Additionally, Rule 3 mentions the composition and jurisdiction of the Appellate Authority for Advance Ruling, which is responsible for adjudicating disputes arising from advance rulings issued under the Act.

The rule also includes provisions for the assignment of functions and powers among officers, delegation of powers, and the procedure for exercising these powers.

The officers appointed under the CGST Act, as outlined in Section 3 and Rule 3, play a crucial role in the effective administration and enforcement of the Act. They have powers to conduct audits, inspections, searches, seizures, arrest individuals involved in tax evasion, and initiate legal proceedings against offenders.

THE HIERARCHY OF OFFICERS UNDER GST ARE AS UNDER:

i) Principal Chief Commissioners of Central Tax or Principal Directors General of Central Tax: These are the highest-ranking officers responsible for overseeing the entire administration of the CGST Act within their respective jurisdictions.

ii)  Chief Commissioners of Central Tax or Directors General of Central Tax: These officers report to the Principal Chief Commissioners or Principal Directors General and have administrative control over a particular zone or region.

iii)  Principal Commissioners of Central Tax or Principal Additional Directors General of Central Tax: These officers are responsible for the administration of the CGST Act within a specific zone, reporting to the Chief Commissioners or Directors General.

iv) Commissioners of Central Tax or Additional Directors General of Central Tax: These officers manage the administration of the Act in a particular zone or region, working under the guidance of the Principal Commissioners or Principal Additional Directors General.

v) Additional Commissioners of Central Tax or Additional Directors of Central Tax: These officers assist the Commissioners or Additional Directors General in discharging their duties under the CGST Act.

vi) Joint Commissioners of Central Tax or Joint Directors of Central Tax: These officers work jointly with the Additional Commissioners or Additional Directors in administering the provisions of the CGST Act.

vii) Deputy Commissioners of Central Tax or Deputy Directors of Central Tax: These officers support the higher-ranking officers in the implementation of the Act.

viii) Assistant Commissioners of Central Tax or Assistant Directors of Central Tax:

These officers assist the Deputy Commissioners or Deputy Directors in carrying out their responsibilities under the CGST Act.

xi) Any other class of officers as deemed fit by the Government: This provision allows the Government to appoint other classes of officers if it deems necessary for the proper implementation of the Act.

Further, the proviso at the end of Section 3 states that officers appointed under the Central Excise Act, 1944, will be considered as officers appointed under the CGST Act. This clause helps ensure a smooth transition for officers already working under the Central Excise Act and facilitates the efficient administration of the CGST Act.

These officers are entrusted with the responsibility of ensuring compliance with the provisions of the CGST Act, identifying tax evasion or fraudulent activities, and taking appropriate action to protect the interests of the revenue and maintain the integrity of the taxation system.

Related Rule : 89, 96

SECTION 4 – APPOINTMENT OF OFFICERS

Section 4 (1) The Board may, in addition to the officers as may be notified by the Government under section 3, appoint such persons as it may think fit to be the officers under this Act.

(2) Without prejudice to the provisions of sub-section (1), the Board may, by order, authorise any officer referred to in clauses (a) to (h) of section 3 to appoint officers of central tax below the rank of Assistant Commissioner of central tax for the administration of this Act.

Please note that the Territorial Jurisdiction of the Assam State Officers after 13/09/2022 is exhibited in the chapter “other relevant materials”

Section 4 of the Central Goods and Services Tax (CGST) Act, 2017 deals with the appointment of officers under the Act. It provides the authority and procedure for appointing officers responsible for administering and enforcing the provisions of the CGST Act. A detailed explanation with examples related to Section 4:

Explanation:

Section 4 of the Central Goods and Services Tax (CGST) Act, 2017 silhouette the provisions for the appointment of officers responsible for administering the Act. This section has two sub-sections, which provide the following details:

Section 4(1) of the CGST Act

The Board, which refers to the Central Board of Indirect Taxes and Customs (CBIC), has the authority to appoint additional officers under the CGST Act, 2017, besides those already notified by the Government under Section 3 of the Act. This provision allows the Board to have flexibility in appointing officers as needed for the effective administration of the Act.

Section 4(2) of the CGST Act

This sub-section empowers the Board to authorize any officer mentioned in clauses (a) to (h) of Section 3, which enumerates various ranks of officers responsible for enforcing the CGST Act. The Board may authorize these officers to appoint other officers below the rank of Assistant Commissioner of central tax. This provision helps in decentralizing the appointment process and streamlining the administration of the Act by enabling higher-ranked officers to appoint lower-ranked officers as required.

Section 4 grants the government the power to appoint officers at different levels to carry out various functions under the CGST Act. These officers are responsible for the implementation, administration, and enforcement of the Act. They have the authority to ensure compliance, conduct audits, inspections, searches, seizures, and initiate legal proceedings against non-compliant entities.

Example 1: Under Section 4, the government may appoint a Principal Chief Commissioner of Central Tax, who holds a senior position and oversees a large region or zone. This officer is responsible for coordinating the activities of other officers within the designated jurisdiction. They supervise the functioning of Chief Commissioners and Commissioners and play a crucial role in the effective implementation of the Act.

Example 2:  A Commissioner of Central Tax, appointed under Section 4, is responsible for administering the tax regime within a specific jurisdiction, such as a state or a region. They oversee the assessment, collection, and enforcement of tax liabilities within their assigned area. A Commissioner has the authority to issue notices, conduct audits, and take actions against non-compliant taxpayers.

Example 3: The government can appoint an Assistant Commissioner or Deputy Commissioner, Additional Commissioner of Central Tax under Section 4. These officers work under the supervision of Commissioners and are responsible for specific divisions or circles within a jurisdiction. They handle tasks like processing returns, conducting investigations, and resolving taxpayer queries. They have the authority to issue show-cause notices and undertake audits, assessments.

Example 4: Section 4 also allows for the appointment of Superintendents or Inspectors of Central Tax. These officers are involved in the day-to-day operations of tax administration. They may be assigned tasks like conducting field inspections, examining records, seizing goods in case of tax evasion, and assisting higher-ranking officers in their duties.

Example 5: The government may also appoint Tax Assistants or Tax Inspectors under Section 4. These officers perform clerical and support functions, including data entry, record maintenance, and assisting other officers in their tasks.

The appointment of officers under Section 4 ensures the smooth functioning of tax administration and compliance with the CGST Act. Each officer plays a specific role within the hierarchy, with varying levels of authority and reszonsibility.

It is important for taxpayers and stakeholders to be aware of the designated officers and their respective powers to ensure proper compliance with the provisions of the CGST Act. To conclude Section 4 of the CGST Act, 2017 deals with the appointment of officers to ensure the proper administration of the Act. The Board has the power to appoint additional officers and authorize higher-ranked officers to appoint officers below the rank of Assistant Commissioner. This ensures that there is a sufficient workforce to administer the Act and provides flexibility in the appointment process.

SECTION 5 – POWERS OF OFFICERS

Section 5(1) Subject to such conditions and limitations as the Board may impose, an officer of central tax may exercise the powers and discharge the duties conferred or imposed on him under this Act.

(2) An officer of central tax may exercise the powers and discharge the duties conferred or imposed under this Act on any other officer of central tax who is subordinate to him.

(3) The Commissioner may, subject to such conditions and limitations as may be specified in this behalf by him, delegate his powers to any other officer who is subordinate to him.

(4) Notwithstanding anything contained in this section, an Appellate Authority shall not exercise the powers and discharge the duties conferred or imposed on any other officer of central tax.

Section 5 of the Central Goods and Services Tax (CGST) Act, 2017 pertains to the powers of officers appointed under the Act. It outlines the authority and responsibilities bestowed upon these officers for the administration and enforcement of the CGST Act. Here is a detailed explanation with examples related to Section 5:

Explanation:

Section 5 empowers the officers appointed under the CGST Act with various powers to carry out their functions effectively. These powers enable them to ensure compliance, conduct inspections, audits, searches, seizures, arrests, and initiate legal proceedings against non-compliant entities.

Section 5(1), states that an officer of central tax can exercise their powers and carry out their duties under the CGST Act, as long as they adhere to the conditions and limitations set by the Board (Central Board of Indirect Taxes and Customs). This provision gives officers the authority to enforce the provisions of the Act while maintaining accountability to the Board.

Section 5(2) of the CGST Act allows an officer of central tax to delegate their powers and responsibilities to a subordinate officer under the Act. This means that senior officers can assign tasks and delegate authority to their subordinates as needed to ensure efficient administration of the tax system.

Section 5(3) enables the Commissioner to delegate his powers to subordinate officers, subject to certain conditions and limitations that he may specify. This provision ensures that the Commissioner can distribute the workload effectively while maintaining control over the administration of the tax system.

Section 5(4) of the CGST Act acts as a safeguard, clarifying that Appellate Authorities cannot exercise the powers or discharge the duties assigned to other officers of central tax. This distinction is crucial in maintaining a separation of powers and preventing potential conflicts of interest, as Appellate Authorities are responsible for hearing appeals against decisions made by officers of central tax.

Example 1: One of the powers conferred upon the officers under Section 5 is the power to inspect premises. An officer may visit the business premises of a taxpayer to verify compliance with the provisions of the Act. During the inspection, the officer can examine books of accounts, records, documents, and any other relevant material to ascertain the accuracy of tax filings and identify potential tax evasion.

Example 2: Officers appointed under the CGST Act have the power to conduct audits. They can examine the records and financial statements of a taxpayer to verify the correctness of tax returns and ensure proper compliance with the Act. Audit powers allow officers to assess the accuracy of input tax credits claimed, the validity of tax payments, and other related matters.

Example 3: Section 5 grants officers the power to search premises, seize goods, and documents if they have reasonable grounds to suspect tax evasion or other violations of the CGST Act. For instance, if an officer receives information about the storage of goods without proper documentation, they may conduct a search operation and seize such goods.

Example 4: Officers appointed under the CGST Act possess the power to arrest a person if they have reasons to believe that the individual has committed a cognizable offense under the Act. The power of arrest is generally exercised in cases involving substantial tax evasion, fraudulent activities, or non-compliance despite repeated warnings.

Example 5: Officers have the power to initiate legal proceedings, including the filing of complaints, show-cause notices, and demand notices. They can issue notices to taxpayers, seeking explanations or evidence related to non-compliance, incorrect tax filings, or any other violations of the Act. These notices pave the way for adjudication, penalty imposition, or other necessary actions.

The powers granted to officers under Section 5 are crucial for the effective administration and enforcement of the CGST Act. These powers enable officers to ensure compliance, deter tax evasion, and protect the interests of the revenue.

Case laws:

Hon’ble  SUPREME COURT OF INDIA, Civil Appeal No. 1390 of 2022 Union of India & Anr Versus M/s Mohit Minerals Pvt. Ltd. Held that The IGST Act and the CGST Act define reverse charge and prescribe the entity that is to be taxed for these purposes. The specification of the recipient – in this case the importer – by Notification 10/2017 is only clarificatory. The Government by notification did not specify a taxable person different from the recipient prescribed in Section 5(3) of the IGST Act for the purposes of reverse charge;

Section 5(4) of the IGST Act enables the Central Government to specify a class of registered persons as the recipients, thereby conferring the power of creating a deeming fiction on the delegated legislation;

It is important for taxpayers and stakeholders to be aware of the powers vested in the officers to maintain proper compliance with the CGST Act. Compliance with the Act and cooperation with the designated officers help facilitate smooth tax administration cordially and promote a transparent taxation system.

SECTION 6 – AUTHORISATION OF OFFICERS OF STATE TAX OR UNION TERRITORY TAX AS PROPER OFFICER IN CERTAIN CIRCUMSTANCES.

(1) Without prejudice to the provisions of this Act, the officers appointed under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act are authorised to be the proper officers for the purposes of this Act, subject to such conditions as the Government shall, on the recommendations of the Council, by notification, specify.

(2) Subject to the conditions specified in the notification issued under sub-section (1) –

(a) where any proper officer issues an order under this Act, he shall also issue an order under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act, as authorised by the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act, as the case may be, under intimation to the jurisdictional officer of State tax or Union territory tax;

(b) where a proper officer under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act has initiated any proceedings on a subject matter, no proceedings shall be initiated by the proper officer under this Act on the same subject matter.

(3) Any proceedings for rectification, appeal and revision, wherever applicable, of any order passed by an officer appointed under this Act shall not lie before an officer appointed under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act.

Section 6 of the Central Goods and Services Tax (CGST) Act, 2017 deals with the authorization of officers of State tax or Union territory tax as proper officers in certain circumstances. It provides provisions for authorizing officers from the State tax or Union territory tax departments to act as proper officers under the CGST Act. Here is a detailed explanation with examples related to Section 6:

Explanation:

Section 6 allows the government to authorize officers from the State tax or Union territory tax departments to act as proper officers under the CGST Act. This provision ensures coordination and collaboration between the central and state/union territory tax authorities for effective implementation and enforcement of the Act.

Section 6(1) of the CGST Act, States that officers appointed under the SGST Act or the UTGST Act are authorized to act as proper officers under the CGST Act, subject to conditions specified by the Government through a notification.

Section 6(2) of the CGST Act, clarifies that subject to the conditions specified in the notification issued under subsection (1):

a) If a proper officer issues an order under the CGST Act, they must also issue a corresponding order under the SGST Act or the UTGST Act, as applicable. This must be done with intimation to the jurisdictional officer of State tax or Union territory tax.

b) If a proper officer under the SGST Act or the UTGST Act has already initiated proceedings on a subject matter, no separate proceedings should be initiated by the proper officer under the CGST Act on the same subject matter. The State and Central Officers shall have coordination among them in order to reduce the litigation, confusion.

Section 6(3) of the CGST Act, specifies that any proceedings for rectification, appeal, and revision of any order passed by an officer appointed under the CGST Act cannot be brought before an officer appointed under the SGST Act or the UTGST Act. This maintains a clear jurisdictional separation between officers appointed under different Acts.

Example 1: Under Section 6, if a person is registered under both the CGST Act and the State Goods and Services Tax (SGST) Act, the government may authorize officers from the state tax department to act as proper officers for the purpose of the CGST Act. This authorization allows state officers to exercise powers and perform functions under the CGST Act, in addition to their powers under the SGST Act. It ensures seamless enforcement of both central and state tax provisions for the registered person.

Example 2: Suppose a taxpayer is engaged in intra-state supply within a specific state/union territory. In such a case, the government may authorize officers from the state/union territory tax department as proper officers for the CGST Act. These authorized officers can then enforce the CGST Act provisions within their respective jurisdiction. This authorization helps in effective administration and enforcement of the CGST Act at the state or union territory level.

Example 3: In situations where a taxpayer is registered only under the CGST Act but carries out taxable activities within a state/union territory, Section 6 allows the government to authorize officers from the state/union territory tax department as proper officers for the CGST Act. This authorization empowers state officers to enforce the CGST Act provisions within their jurisdiction, ensuring compliance with central tax provisions by such taxpayers.

Example 4: Suppose a taxpayer is involved in inter-state supply and registered under the Integrated Goods and Services Tax (IGST) Act. In such cases, the CGST Act and the SGST Act do not directly apply. However, if required, the government may authorize officers from the state tax department as proper officers under the CGST Act. This authorization enables state officers to perform specific functions under the CGST Act relating to inter-state supplies involving that state.

The authorization of officers from the state or union territory tax departments under Section 6 promotes cooperation and coordination between the central and state/union territory tax authorities. It ensures the effective implementation of the CGST Act provisions and facilitates seamless compliance and enforcement across different tax jurisdictions effectively.

Taxpayers and stakeholders should be aware of the authorized officers and their roles in enforcing the CGST Act within their respective jurisdictions. This understanding helps in maintaining compliance and cooperating with the designated officers for a smooth and streamlined tax administration.