Scope of a Revisional Authority's Powers Under Section 108 of the CGST Act 2017: Dropping Tax Demands

Introduction

The Central Goods and Services Tax Act 2017 (CGST Act 2017)

The Central Goods and Services Tax Act 2017 (CGST Act 2017) provides for the creation of a dedicated authority, herein referred to as the Revisional Authority (RA), which has the power to revise and potentially drop tax demands if certain conditions are met. This article delves into the scope and limitations of the RA's powers under Section 108 of the CGST Act 2017.

Source of Revision

The RA can initiate the revision process based on the following:

Own Motion Information Received Request from State/UT Commissioners

It is important to note that taxpayers do not have a direct right to approach the RA.

When to Revise

A demand issued by a subordinate officer can be revised by the RA if the following conditions are met:

The decision/order is erroneous and prejudicial to the revenue The decision/order is illegal The decision/order is improper The decision/order has ignored material facts, whether these facts were available at the time of issuance or not The decision/order has been made on account of an observation by the Comptroller and Auditor General of India

It is crucial to understand that Section 108 of the CGST Act is designed to benefit the interests of the revenue. Therefore, while the RA has the power to modify or annul a decision/order, it is unlikely to pass an order that benefits the taxpayer exclusively.

Section 108 of the CGST Act: Powers of Revisional Authority

The RA has the authority to call for and examine the record of any proceeding and may:

Evaluate and determine the supremacy of revenue interest Stay the operation of the decision/order if necessary Give the concerned person an opportunity to be heard Conduct further inquiry as needed Pass an order based on the substantiation of the aforementioned conditions

Subsection 2 of Section 108 lists scenarios where the RA may not exercise its power, including if the order has been appealed, is already under revision, or has been passed in exercise of the power under subsection 1.

Finality and Exception

Orders passed by the RA under subsection 1 are final and binding, subject to certain exceptions. The period of limitation is calculated from the date of the decision reviewed, with adjustments made based on pending appeals or court stays.

Conclusion

The RA's powers under Section 108 of the CGST Act 2017 offer a valuable legal mechanism for reviewing and potentially overturning tax demands. Taxpayers must carefully analyze their cases to determine if these powers can be effectively utilized.