GST Series: Part 1 Section 3 to Section 6 of CGST Act 2017

1. A series of articles on the provisions of Goods & Services Tax (GST) Act 2017 are being planned to be posted on this forum. The aim of starting the series is to present the contents of each section of the Central Goods & Services Tax (CGST) Act in a simplified manner, A care is being exercised to minimize the use of legalese so that everyone can understand and implement the provisions in their respective area of work.  The series of articles will cover section 3 to section 174 of CGST Act 2017. Section 1 & 2 of the Act pertains to introduction and definitions. The articles will indicate the provisions, amendments & notifications issued in respect of each section.

Also Read- GST Series–Part 2 Supply-Section 7 of CGST Act 2017

1.1. At times , the amendment issued to one section has effect and implication on other provisions of the Act Such amendment  need to be co-related and read in conjunction to understand & grasp the total implication of  GST provisions. The related provisions , sections and references will also be indicated in the article .

2. The Part 1 of the series covers section  3 to section 6 of CGST Act 2017 which deals with appointment of the officers, power and authorization given to the officers under the GST Act.

2.1 A taxable person is required to pay both Central Goods & Services Tax (CGST) and State Goods & Services Tax (SGST) for intra State supplies. For Inter State Supplies, Integrated Goods & Services Tax ( IGST ) need to be paid.

2.2 The CGST Act and SGST Act are identical in most of the provisions. The CGST and IGST is  administered by department of CGST [present Central Excise and service tax Department] and SGST is administered by Commissioner of GST of each State and officers subordinate to him.

Section 3 – (Officers under CGST Act 2017)

Legal Provision :- 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 shall be deemed to be the officers appointed under the provisions of this Act

The officers appointed under the CGST Act 2017 can be broadly classified in seven categories. The area of work for the officers appointed has been ascertained  vide Notification No. 02/2017-Central Tax, dated the 19^th June, 2017 . The designations and tasks allocation to the officers under GST Act are as follows :-

3.1 Principal Chief Commissioner / Chief Commissioner CGST:- Principal Chief commissioner/ Chief commissioner are  the senior most officer who has administrative control over all the officers within his zone . For the purpose of the Act , country is divided in 21 Zones and each zone is under supervision of Principal Chief commissioner or Chief Commissioner of Central Zone . Senior grade Chief Commissioner will be designated as Principal Chief Commissioner, though both have same powers

3.2 Director General  – Offices of Director General have been created for monitoring some specified functions ie , DG GST Intelligence, DG GST Audit Etc .Powers have been delegated to them vide Notification No. 14/2017-CT dated 1-7-2017

3.3 Principal Commissioner/Commissioner of Central Tax : Notification No 2/2017 –CT dated 19.06.2017 notified 107 commissionerates in each 21 Zones and Principal Commissioner/Commissioner of Central Tax is Administrative  in-charge of the Commissionerates.

3.4 First Appellate Authority of Central Tax – These are Commissioner of Central Tax (Appeals) or Additional Commissioner of Central Tax (Appeals) or Joint Commissioner of Central Tax (Appeals).

3.5 Commissioner of Central Tax (Audit) The Government vide notification No. 2/2017-CT dated 19-6-2017 has appointed 48 Commissioners of Central Tax (Audit) for the purpose of GST Act.

3.6 Additional and Joint Commissioners: There are Additional Commissioner/s and Joint Commissioner/s of Central Tax in each Commissionerate.

3.7 Deputy Commissioner, Assistant Commissioner and Superintendent – Each Commissionerate is divided into divisions and each division is under administrative control of ‘Deputy Commissioner of Central Tax’ or ‘Assistant Commissioner of Central Tax’.

 Section  4 – Appointment of Officers. :

Legal Provision : (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

4.1 Central Board of Indirect Taxes and Customs (CBI&C ) is  called ‘Board‘ under CGST Act . It has been formed with headquarters at New Delhi. This Board, consisting of six/seven members, headed by Chairman, has powers to administer the CGST law. CBI&C functions under Ministry of Finance, Government of India [Till 29-3-2018, the Board was known as Central Board of Excise and Customs – CBI&C, The name has been changed to CBI&C w.e.f. 29-3-2018]

4.2 CBI&C is empowered to appoint officers in addition to the officers as may be notified by the Government under section 3 of CGST Act – Sec 4(1) of CGST Act .

4.3 CBI&C may, by order, authorise any officer (referred to in section 3) to appoint officers of central tax  below the rank of Assistant Commissioner of central tax for the administration of this Act. Sec 4(2) of CGST Act.

Section 5 : Power of Officers under CGST Act, 2017

Legal Provision : (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

5.1 The Central Tax officer ,while discharging his duties and exercising powers under the CGST Act is also abide by conditions and limitations imposed by the Board ( CBI&C)

5.2 The Central Tax officer may also exercise the powers and discharge the duties imposed on his subordinate under CGST Act .- sec 5(2) of CGST Act

5.3 The commissioner can delegate the powers to his subordinate with specified conditions and limitation – section 5(3) of CGST Act.

5.4 An Appellate Authority shall not exercise the powers and discharge the duties conferred or imposed on any other officer of central tax – section 5(4) of CGST Act

Section 6 : Authorisation of officers of State tax as proper officer in certain circumstances

Legal Provision : (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.

7. Administration of SGST : Administration of SGST in every State will be under Ministry of Finance of that State. The Officers will be Principal/Chief Commissioner of SGST, Special Commissioner of SGST, Additional Commissioner of SGST, Joint Commissioner of SGST, Deputy Commissioner of SGST, and Assistant Commissioner of SGST.

8. Proper Officer : “Proper officer” in relation to any function to be performed under this Act, means the Commissioner or the officer of the central tax who is assigned that function by the Commissioner in the Board – section 2(91) of CGST Act.

8.1 The ‘proper officer’ has been specified vide CBI&C circular No. 1/1/2017-GST dated 26-6-2017 and No. 3/3/2017-GST dated 5-7-2017 as amended by CBI&C circular No. 31/05/2018-GST dated 9-2-2018

9. Proper Officer of CGST and SGST are appointed under respective Act .The officers appointed under the State Goods and Services Tax Act (SGST ) can exercise powers and discharge duties as ‘proper officer’ for purpose of Central Goods and services Tax (CGST) and vice versa – Section 6(1) of CGST Act

9.1 Proper officer shall issue order  under CGST Act shall also issue order under SGST Act under intimation to the jurisdiction of the State .- Section 6(2) of CGST Act

9.2 Where a proper officer under the SGST 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.- Sec 6(2) of CGST Act

9.2.1. However , in Dadhichi Iron And Steel Pvt. Ltd. Vs Chhattisgarh GST (Chhattisgarh High Court) it has been held that proceeding against issue of Fake Invoice to illegally avail ITC not hit by Limitation under Section 6(2)(1)(b) of CGST Act 2017

10. GST Council vide circular No. 1/2017-GST dated 20-9-2017  prescribed guidelines for division of taxpayers between Centre and State to ensure single interface under GST.

11. Enforcement action can be initiated either by State or by Central tax authorities – Though taxable persons are bifurcated between Central and State authorities for administration purposes (to avoid dual control), both Central and State tax authorities are authorized to initiate intelligence based enforcement against taxpayers, irrespective of the administrative assignment of taxpayer to any authority.

11.1 The initiating authority can complete entire process of investigation, issue of SCN, adjudication, recovery, filing of appeal etc. arising out of such action – DOF No. CBEC/20/43/01/2017-GST dated 5-10-2018.

12. Any proceedings for rectification, appeal and revision, wherever applicable, of any order passed by an officer appointed under CGST 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(3) of CGST Act.

Part 2 of the series will cover the topic “ Supply” under section 7 of the CGST Act .

The Author can be approached at caanitabhadra@gmail.com