POWER OF OFFICERS UNDER GST?

 🔥 Powers of Officers under the CGST Act – A Deep Dive

When it comes to the effective implementation and enforcement of the Goods and Services Tax (GST) in India, the role of officers under the Central Goods and Services Tax (CGST) Act is not just pivotal but also empowered by law with a comprehensive suite of authorities. These powers are designed to ensure smooth administration, compliance, assessment, and resolution processes within the GST regime.
Under Section 5 of the CGST Act, 2017, officers are vested with the authority to act within the boundaries of power as defined and limited by the Central Board of Indirect Taxes and Customs (CBIC). From initiating refunds and assessments to delegating responsibilities and withholding dues—officers play a critical enforcement and facilitative role.
Let’s explore in detail how these powers are structured and executed under various subsections of the Act.

🔹 Section 5 – General Powers of Officers

I. Powers of Officers – Section 5(1)

According to Section 5(1) of the CGST Act:

"Subject to such conditions and limitations as the Central Board of Indirect Taxes and Customs (CBIC) may impose, an officer of Central Tax may exercise the powers and discharge the duties conferred or imposed on him under this Act."

👉 Key Takeaway: Officers act under the guidance and restrictions laid down by CBIC, ensuring centralized supervision and control.

II. Exercising Powers of Subordinates – Section 5(2)

According to Section 5(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.

👉 Key Takeaway: Senior officers can step into the shoes of subordinates, ensuring flexibility and continuity in administration.

III. Delegation of Powers – Section 5(3)

According to Section 5(3):

"The Commissioner may, subject to such conditions and limitations as may be specified by him, delegate his powers to any other officer who is subordinate to him."

👉 Key Takeaway: Power can cascade down the hierarchy, ensuring decentralized and efficient decision-making.

IV. Restriction on Appellate Authorities – Section 5(4)

According to Section 5(4):

"Notwithstanding anything contained in Section 5, an Appellate Authority shall not exercise the powers and discharge the duties conferred or imposed on any other officer of central tax."

👉 Key Takeaway: Appellate Authorities are barred from using powers meant for original or lower adjudicating authorities—preserving impartiality in appeals.

💼 Powers of Officers under Specific Sections of the CGST Act

Let’s now look at the specific functional powers granted under the CGST Act that are crucial for tax administration. The CGST Act, through Section 54, not only provides a framework for refund claims but also confers specific powers upon the proper officers for processing, sanctioning, withholding, and adjusting refunds. These powers ensure proper checks, balances, and control in the refund mechanism.

🔹 Section 54(5) – ✅ Power to Order Refund

If the proper officer, after scrutiny of the refund application and documents, is satisfied that the whole or part of the refund is due, they may pass an order accordingly.

🔹 The amount so determined is credited to the Consumer Welfare Fund under Section 57 unless it falls under exceptions (like unjust enrichment not applicable).

🛠️ Officer’s Power:

• Examine refund eligibility

• Pass refund order (full or partial)

• Credit the amount appropriately

🔹 Section 54(6) – 💸 Power to Sanction Provisional Refund (90%)

The proper officer may, in case of zero-rated supply, provisionally refund 90% of the total claim (excluding provisionally accepted ITC) within 7 days of acknowledgment.

🛠️ Officer’s Power:

• Sanction provisional refund for exporters (zero-rated supplies)

• Ensure timely payment without waiting for final verification

• Reserve right to later conduct full scrutiny

🔹 Section 54(10) – ✋ Power to Withhold Refund

The proper officer may withhold payment of refund due under Section 54(3), if:

• The applicant has defaulted in furnishing any return, or

• Is liable to pay any tax, interest, or penalty (not stayed by any authority).

🛠️ Officer’s Power:

• Withhold refund until compliance is ensured

• Protect revenue interests in cases of non-compliance

🔹 Section 54(11) – 💳 Power to Deduct Dues from Refund

The proper officer may deduct from the sanctioned refund amount any outstanding dues (tax, interest, penalty, fee) under CGST or existing laws.

🛠️ Officer’s Power:

• Recover government dues by adjusting from refundable amount

• Avoid delay in revenue recovery

🔹 Section 54(12) – 💰 Interest on Withheld Refund (Subject to Officer’s Decision)

Where a withheld refund is subsequently sanctioned, the applicant shall be entitled to interest under Section 56.

🛠️ Officer’s Power (Implied):

• Has discretion to initially withhold the refund

• Triggers obligation to grant interest once refund is approved later

🧠 In Summary – Officer’s Powers Under Section 54

Clause	Officer's Power
54(5)	Pass refund orders (fully or partially)
54(6)	Sanction 90% provisional refund for zero-rated supplies
54(10)	Withhold refund due to non-compliance
54(11)	Adjust refund against outstanding dues
54(12)	Grant interest on refund if withheld earlier

📊 B. Powers Related to Provisional Assessment [Section 60, CGST Act]

1. Power to Allow Payment on Provisional Basis – Sections 60(1) & 60(2)

If a taxable person is unable to determine the value of goods/services or the applicable tax rate, they may request provisional assessment.

The proper officer shall:

• Pass an order within 90 days of receiving the request,

• Allow payment on a provisional basis at a rate/value deemed fit.

🔐 Condition: The taxable person must execute a bond with suitable surety or security, binding them to pay any differential tax arising from final assessment.

🔹 2. Final Assessment Order – [Section 60 (3)]

After provisional assessment, the officer must finalize the assessment.

🛠️ Power of Proper Officer:

• Must pass a final assessment order within 6 months from the communication of provisional order.

• Can extend this period for up to 4 years with proper approval (via Section 60(4)).

🔹 3. Best Judgment Assessment – Non-Filers – [Section 62]

Applies when a registered person fails to file return even after being served a notice under Section 46.

🛠️ Power of Proper Officer:

• May assess tax liability to the best of his judgment based on available material.

• Must issue the order within 5 years from the due date of annual return (as per Section 44) for the concerned financial year.

📋 C. Powers Related to Audit – [Section 65]

Audit is a tool to verify correctness of turnover declared, taxes paid, and ITC claimed.

🛠️ Powers of Commissioner or Authorized Officer:

• May undertake audit of any registered person via general or specific order.

• Audit may be conducted at:

  • Taxpayer’s place of business, or

  • Officer’s premises.

• Must issue a notice at least 15 working days before the audit.

• Audit must be completed within 3 months from its commencement (extendable to 6 months).

🔍 D. Powers Related to Inspection, Search, Seizure & Arrest

🔹 1. Power of Inspection – [Section 67 (1)]

Granted to a Joint Commissioner or higher-ranking officer.

🛠️ Power:

• May authorize any CGST officer (in writing) to inspect:

  • Any place of business of a taxable person.

  • Premises of transporters or warehouse operators.

• Triggered by a reason to believe that tax evasion or irregularity exists.

🔹 2. Power of Search and Seizure – [Section 67 (2)]

Exercised by a Joint Commissioner or above, based on reason to believe.

🛠️ Power of Proper Officer:

• May authorize or personally conduct search and seizure if:

  • Goods liable for confiscation, or

  • Documents, books, or things relevant to proceedings are suspected to be hidden.

• May restrict dealing with goods (if seizure not feasible) by issuing an order to the owner/custodian.

• Seized documents/books must be returned after maximum of 30 days post proceedings unless required further (as per Section 67(3)).

🔹Power to Seal or Break Open – [Section 67(4)]

If access to premises or containers is denied or obstructed, the authorized officer has the power to:

• Seal the premises or container, or

• Break open the door of:

  • A premises

  • An almirah

  • An electronic device

  • A box or receptacle suspected to contain goods, accounts, registers, or documents.

🛠️ Officer’s Power:

• Use forceful access, including breaking open locks or enclosures to secure evidence during inspection or seizure.

🔹 3. Power to Seize Accounts or Documents – [Section 67(ii)]

If the proper officer has reason to believe that a person has evaded or is attempting to evade tax, they may:

• Seize accounts, registers, or documents produced before them,

• Provide a receipt for the items seized,

• Retain them as long as required for legal proceedings or prosecution.

🛠️ Officer’s Power:

• Seize financial and operational records based on suspicion of tax evasion.

• Take possession for legal evaluation or evidence in prosecution.

 🔹 4. Power to Inspect Goods in Movement – [Section 68(1)]

The Government mandates that conveyances transporting goods above a specified value must carry:

• Prescribed documents (like e-way bill), and

• Prescribed devices (like RFID, if applicable).

🛠️ Power of Proper Officer:

• Intercept any vehicle transporting goods.

• Require the person in charge to produce documents/devices.

• Inspect the goods physically for verification against documents.

📌 Objective: Prevent clandestine movement or tax evasion during transit.

Power to Arrest – [Section 69] 

The Commissioner can authorize arrest in case of serious tax evasion offenses.

🛠️ Power of Commissioner:

• May authorize a CGST officer to arrest a person if there’s reason to believe that the person committed an offense under Section 132.

• Offenses must be cognizable and non-bailable (as specified).

• If the Commissioner has reason to believe that a person has committed an offence under:

  • Clause (a) – Supply of goods/services without invoice

  • Clause (b) – Issue of invoice without actual supply

  • Clause (c) – Availing/utilizing ITC without actual receipt

  • Clause (d) – Collecting GST but not depositing with govt.

  and the offense is punishable under Section 132, he may:

  • Authorize any officer of central tax to arrest that person by order.

  🛠️ Commissioner’s Power:

  • Initiate arrest for serious offenses (e.g., fraud, willful default).

  • Grant authorization to subordinate officers to execute the arrest.

  🛑 These powers are applicable only for cognizable and non-bailable offenses exceeding prescribed monetary thresholds (usually ₹2 crore+).

🔹 7. Power to Summon Persons – [Section 70]

The proper officer under CGST has the same powers as a civil court under the Code of Civil Procedure, 1908 for the purpose of:

• Summoning any person whose attendance is necessary,

• Obtaining evidence or compelling the production of documents or other items,

• Enforcing attendance for the purposes of inquiry under the Act.

🛠️ Officer’s Power:
Treats non-compliance with summons seriously—can enforce attendance and production legally like a court.

🔹 8. Power to Access Business Premises – [Section 71(1)]

Any CGST officer, authorized by a proper officer not below the rank of Joint Commissioner, may access a registered person’s business premises to:

• Inspect:

  • Books of accounts,

  • Documents,

  • Computers or software systems,

  • Any relevant item available at such premises.

📌 Purpose: To conduct audit, scrutiny, verification, and checks that are essential to safeguard revenue.

🔹 9. Power to Demand Records for Audit – [Section 71(2)]

Every person in charge of a registered business must:

• On demand, make available all records and documents to the officer authorized under Section 71(1), or to:

  • The audit party deputed by proper officer,

  • A cost accountant or chartered accountant nominated under Section 66.

🛠️ Officer’s Power:
Compel the business to furnish all data, records, software access, etc., necessary for scrutiny and analysis.

🔹 10. Power to Seek Assistance from Other Officers – [Section 72]

Officers under CGST Act can seek help and assistance from the following categories of officers:

• Police officers,

• Railway officers,

• Customs officers,

• Revenue officers (e.g., those involved in land or property tax collection),

• State tax and Union territory tax officers,

• Any other officers notified by the Government.

📌 Objective: Ensures smooth enforcement by allowing cross-departmental cooperation.

🔹 11. Arrest-Related Powers – [Section 69 & 132]

📌 Section 69 – Power to Arrest:

The Commissioner may authorize arrest of a person by any CGST officer, if he has reason to believe the person has committed an offence under Section 132(1).

➡️ Such a person must be:

• Informed of the grounds of arrest, and

• Produced before a Magistrate within 24 hours, as per standard legal process.

⚖️ Section 132 – Offences Punishable with Imprisonment:

The following offences empower the Commissioner to order arrest:

• Clause (a): Supplying goods/services without invoice to evade tax.

• Clause (b): Issuing fake invoices without actual supply, leading to wrongful ITC/refund.

• Clause (c): Availing ITC using fake invoices.

• Clause (d): Collecting tax but not paying it to Government within 3 months of due date.

🛠️ Officer’s Power:
Initiate criminal prosecution, with arrest authority, for high-value or fraudulent GST offenses.

⚖️ F. Powers Related to Imposition of Penalties – CGST Act

🧾 1. Power to Impose Penalty for Return Default – [Section 123]

If a person fails to furnish a return under the CGST Act within the specified time:

• The officer may impose a penalty, up to ₹100 for every day during which the failure continues.

🛠️ Officer’s Power:
Enforce compliance with timely return filing through monetary penalty.

📊 2. Power to Fine for Not Furnishing Statistics – [Section 124]

If a person:

• Fails to furnish statistical information required under the CGST Act,

• Or furnishes false information knowingly,

Then the proper officer may impose:

• A fine up to ₹10,000, and

• In case of continuing offence, a further fine up to ₹100 per day (subject to a ceiling of ₹25,000).

🛠️ Officer’s Power:
Ensure accurate data collection for audits, research, or policy through fines for non-cooperation.

🔥 Conclusion: The Power Behind the Uniform

The CGST Act doesn’t just assign responsibility—it arms its officers with a robust legal arsenal. From ordering refunds and sealing premises, to inspecting digital records and even putting tax evaders behind bars, these officers are not just bean counters—they're gatekeepers of the nation’s economic integrity. 💼💣

Every section—from 54 to 132—acts like a chapter in a playbook designed to detect, deter, and demolish any attempt at tax evasion or manipulation. Whether it’s auditing the books, intercepting goods in motion, summoning culprits, or sealing doors—they don’t just check compliance, they enforce it with authority and precision. ⚖️🔍

In a world where financial crimes are getting smarter, the CGST Act makes sure its officers stay smarter, faster, and legally empowered. So, next time you hear the term “proper officer,” just remember—it’s not just a title, it’s a tax-powered force trained to keep the country’s revenue wheel turning. 💰