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GST Operationalisation : serious faux pas?

JUNE 20, 2017

By R K Singh

THE Central government issued Notification no. 1/2017 - Integrated Tax dated 19 June 2017 in terms of which Sections 1, 2, 3, 14, 20 and 22 of the IGST Act 2017 have been brought into force with effect from 22.6.2017. SimilarlyNotification no. 1/2017 - Central Tax dated 19.6.2017 has been issued bringing into force Sections 1, 2, 3,4,5, 10, 22, 23, 24, 25, 26, 27, 28, 29, 30, 139, 146 and 164 of the CGST Act 2017 with effect from 22.6.2017.

2. It is thus obvious that any power under the aforesaid Sections can be exercised only on or after 22.6.2017. In other words, any notification issued in exercise of the powers under any of the aforesaid Sections prior to 22 .6. 2017 will be a notification issued without the authority of law.

3. The Central government has issued Notification no. 2/2017 dated 19-6-2017 notifying jurisdiction of Central Tax officers by exercising the powers under Section 3 read with Section 5 of the CGST Act 2017, Notification no. 3/2017 - Central Tax dated 19-6-2017 notifying CGST Rules 2017 by exercising the powers under Section 164 of the CGST Act 2017, Notification no.4/2017 - Central Tax dated 19-6-2017 by exercising the powers conferred by Section 146 of the CGST Act 2017, Notification no. 5/2017 - Central Tax dated 19.6.2017 in exercise of the powers under Section 23 (2) of the CGST Act 2017, Notification no.6/2017-Central tax dated 19-6-2017 notifying modes of verification by exercising the powers under Section 26 (1) of the CGST Act 2017. Similarly Notification no. 2/2017 - Integrated Tax dated 19.6.2017 has been issued by exercising the powers under Section 3 of the IGST Act 2017.

3. As is evident, all the aforesaid notifications (except Notification no. 1/2017-Central Tax dated 19-6-2017 and Notification no. 1/2017-Integrated Tax dated 19-6-2017) have been issued on 19 June 2017 (i.e. before 22-6-2017) by exercising the powers under various Sections of IGST Act/CGST Act but on that day (i.e. on 19 June 2017) none of these Sections were in force. Thus all these notifications issued by exercising the powers under the respective Sections have been issued without the authority of law and therefore are invalid/non est. It is no consolation that these notifications clearly state that they will come into force on 22.6.2017 because they have been issued on 19.6.2017 which means it is on that date ( i.e.19-6-2017) that the powers have been exercised by the Central government in terms of respective Sections of IGST Act/CGST Act to issue the said notifications while on that date (i.e. 19.6.2017) the said Sections had not even come into force and therefore there was no powers available to the Central government under those Sections on the date of issue of the said notifications.

4. The net effect of the aforesaid analysis is that all the above mentioned notifications (except Notification no. 1/2017-Central Tax dated 19-6-2017 and Notification no. 1/2017-Integrated Tax dated 19-6-2017) have been issued without the authority of law and,therefore,are legally invalid /non est. In order to avoid the obvious and colossus consequences of these notifications being (declared) invalid/non-nest, it would be advisable that these notifications are re-issued on 22 June 2017 because on that date the Central government would have the required powers under the said Sections as on that date ( i.e. on 22-6-2017) these Sections will have full force of law by virtue of notification no. 1/ 2017 - Integrated Tax and Notification no. 1/2017 - Central Tax.

(The author is Retired Chief Commissioner/Member CESTAT and the views expressed are strictly personal.)

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