Analysis of Section 169 to 174 of CGST ACT 2017

Simplified GST Series- Section 168-174/CGST ACT 2017

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Article analyses Section 168- Power to issue instructions or directions, Section 169- Service of notice in certain circumstances, Section 170- Rounding off of tax, etc., Section 171- Anti-profiteering measure, Section 172- Removal of difficulties, Section 173- Amendment of Act 32 of 1994 and Section 174- Repeal and Saving.

Section 168- Power to issue instructions or directions

This Section empowers the Competent Authority to issue orders, instruction or directions to the lower authorities to bring in uniformity in the implementation of the Act.

There are three aspects to the provision, namely:

• authority issuing the instruction;
• persons whom it binds, and
• its efficacy.

It is the Competent Authority who is empowered to issue the orders, instruction or directions.

The purpose is to bring in uniformity in the implementation of the Act; and it is binding on all GST officers.

Section 169- Service of notice in certain circumstances

This Section details the mode of service that is considered valid.

• Communication: Any decision, order, summons, notice or other communication under the Act or the rules.
• Modes of Communication: The above documents can be served on the assessee in the following modes:
• Mode 1 – Physical Delivery
• Mode 2 – Regd. Post /speed post or Courier with acknowledgement due
• Mode 3 – Electronic Means
• Mode 4 – Media
• Mode 5 – Other Modes: If above modes fail, then it can be served by affixing it in some conspicuous place at his last known place of business or residence
• Date of service- Normal Cases: The above communications shall be treated as served on the date on which it is tendered or published or a copy thereof is affixed
• Registered or Speed Post: If such communications are sent by registered/ speed post, it shall be treated as received by the addressee at the expiry of the normal period taken by such post in transit
  

Section 170- Rounding off of tax, etc.

The amount of tax, interest, penalty, fine or any other sum payable, and the amount of refund or any other sum due, under the provisions of this Act shall be rounded off to the nearest rupee and, for this purpose, where such amount contains a part of a rupee consisting of paise, then, if such part is fifty paise or more, it shall be increased to one rupee and if such part is less than fifty paise it shall be ignored.

Section 171- Anti-profiteering measure

(1) Any reduction in rate of tax on any supply of goods or services or the benefit of input tax credit shall be passed on to the recipient by way of commensurate reduction in prices.

(2) The Central Government may, on recommendations of the Council, by notification, constitute an Authority, or empower an existing Authority constituted under any law for the time being in force, to examine whether input tax credits availed by any registered person or the reduction in the tax rate have actually resulted in a commensurate reduction in the price of the goods or services or both supplied by him.

(3) The Authority referred to in sub-section (2) shall exercise such powers and discharge such functions as may be prescribed.

(3A) [Where the Authority referred to in sub-section (2) after holding examination as required under the said sub-section comes to the conclusion that any registered person has profiteered under sub- section (1), such person shall be liable to pay penalty equivalent to ten per cent. of the amount so profiteered:

Provided that no penalty shall be leviable if the profiteered amount is deposited within thirty days of the date of passing of the order by the Authority.

Analysis- The registered person is expected to reduce the price on account of availment of input tax credit or reduction in tax rates. An authority would be notified for this purpose, who wouldexercise powers and discharge functions in a prescribed manner.

Section 172- Removal of difficulties-

(1) If any difficulty arises in giving effect to any provisions of this Act, the Government may, on the recommendations of the Council, by a general or a special order published in the Official Gazette, make such provisions not inconsistent with the provisions of this Act or the rules or regulations made thereunder, as may be necessary or expedient for the purpose of removing the said difficulty:

Provided that no such order shall be made after the expiry of a period of [five years] from the date of commencement of this Act.

(2) Every order made under this section shall be laid, as soon as may be, after it is made, before each House of Parliament.

Analysis- If the Government identifies that there is a difficulty in implementation of any provision of the GST Legislations; it has powers to issue a general or special order, to carry out anything to remove such difficulty. Maximum Time limit for passing such order shall be 5 years from the date of effect of the CGST Act.

Section 173- Amendment of Act 32 of 1994

Save as otherwise provided in this Act, Chapter V of the Finance Act, 1994 shall be omitted.

Section 174- Repeal and Saving –

• Whenever an enactment is repealed or substituted by a new enactment then the new enactment should provide for a clause relating to repeal or saving of certain provisions under the old law.
• This would ensure that the rights, powers, liabilities, duties, privileges, obligations etc. created under the old laws are intact and are not affected by the enactment of new law by repealing the old laws.
• For the said purpose, the General Sales Tax/VAT / CST laws and Central Excise Act,1944 and Central Excise Tariff Act, 1985 would continue to apply – E.g. Certain petroleum products, tobacco products.
• Thus, these laws would operate even after the GST is introduced to the extent they continue to operate in respect of goods that still remain under the earlier laws, as amended by the Taxation Laws Amendment Act, 2017.
• Subject to the above comments the following laws would be repealed, as the taxes are subsumed by GST law:

State laws (refer section 173 of State GST Act):

(i) Entry Tax laws;

(ii) Entertainment Tax laws;

(iii) Luxury Tax laws;

(iv) Value added Tax laws;

(v) laws on Advertisement;

(vi) laws on lottery, Betting and Gambling;

(vii) CST Act.

Central laws:

(i) Duty of Excise on Medicinal and Toilet Preparation Act;

(ii) Chapter V of the Finance Act, 1994 (Service Tax law);

(iii) Central Excise Act,1944;(except in respect of goods included in entry 84 of the seventh schedule to the constitution)

(iv) Additional duties of Excise (Goods of Special Importance Act, 1957);

(v) Additional duties of Excise (Textile and textile products Act,1978);

(vi) Additional Custom Duty (CVD);

(vii) Special Additional Duty of Customs(SAD).

(viii) Medical & toilet preparations (excise duties) Act,1955

(ix) Central excise tariff Act,1985

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