CGST Section 108 — Powers of Revisional Authority
CGST Act · Powers of Revisional Authority
Quick Answer
Section 108 of the CGST Act, 2017 governs Powers of Revisional Authority. It provides the core statutory basis, outlining the essential legal principles, rights, and liabilities under Indian indirect tax law. Section 108 GST: Powers of Revisional Authority — eligibility, conditions, case laws and compliance impact under Indian tax law.
Plain-English Explanation
Section 108 of the CGST Act, 2017 grants specific powers to a 'Revisional Authority' to review decisions or orders made by their subordinates under the GST law. This authority is tasked with ensuring that these decisions are correct and don't negatively impact government revenue.
This section applies to all officers subordinate to the Revisional Authority who have passed an order or decision under the CGST Act, SGST Act, or UTGST Act. The Revisional Authority can act either on their own initiative, based on information received, or upon a request from the Commissioner of State Tax or Union Territory Tax. The aim is to correct errors that prejudice the revenue's interest due to decisions being illegal, improper, or overlooking crucial facts.
Here's a breakdown of the key conditions and exceptions outlined in Section 108:
- Grounds for Revision: The Revisional Authority can intervene if the original decision is:
- Erroneous, leading to prejudice to the revenue.
- Illegal or improper.
- Hasn't considered significant material facts (whether available at the time of the original order or discovered later).
- Influenced by observations from the Comptroller and Auditor General of India (CAG).
- Opportunity to be Heard: Before passing any revised order, the affected person must be given a fair chance to present their case. The Revisional Authority must also conduct any further inquiries they deem necessary. This is a crucial aspect of natural justice.
- Powers of the Revisional Authority: The Revisional Authority has broad powers to:
- Stay the original decision or order temporarily.
- Enhance (increase the tax liability), modify (change the terms), or annul (completely cancel) the original decision.
- Limitations on Revisional Powers: The Revisional Authority cannot exercise its powers if:
- The order has already been appealed under Sections 107 (Appeals to Appellate Authority), 112 (Appeals to Appellate Tribunal), 117 (Appeal to High Court), or 118 (Appeal to Supreme Court) of the CGST Act.
- The appeal period under Section 107(2) hasn't expired or more than three years have passed since the original decision/order was made.
- The order has already been taken up for revision under Section 108 at an earlier stage.
- The order was passed by an officer already exercising revisional powers under Section 108(1).
- Exception to Limitations (Proviso): Even if an appeal has been filed, the Revisional Authority can still issue an order on a specific point not raised and decided in that appeal. However, this must be done within one year from the date of the appeal order or before the general three-year revision limitation, whichever is later.
- Finality of Order: The order passed in revision is final and binding, subject to provisions related to appeals to the Appellate Tribunal, High Court, or Supreme Court (Sections 113, 117, 118).
- Exclusion of Time: If the decision involves an issue already decided by the Appellate Tribunal or High Court, and an appeal is pending in the High Court or Supreme Court, the period between these decisions is excluded when calculating the three-year limitation period. Similarly, any stay order issued by a court or tribunal is also excluded from this limitation.
- Definition of Record and Decision: 'Record' includes all documents relating to the proceedings under the GST Act available at the time of examination. 'Decision' includes any intimation given by an officer lower in rank than the Revisional Authority.
Practical Examples:
- Incorrect Tax Calculation: A GST officer incorrectly calculates the tax liability of a business, leading to a lower tax demand. The Revisional Authority, upon reviewing the records, notices the error. They can revise the order to reflect the correct tax liability after giving the business an opportunity to explain.
- Missed Input Tax Credit (ITC): A company's ITC claim is rejected by an assessing officer due to a misinterpretation of the law. The Commissioner of State Tax requests the Revisional Authority to examine the case. If the Revisional Authority finds the rejection erroneous, they can modify the order to allow the ITC.
- CAG Observation: The CAG points out that a particular GST exemption was incorrectly granted by a junior officer. The Revisional Authority, acting on this observation, can revise the order to withdraw the exemption, after providing the business with a hearing.
Important Amendments: There haven't been major amendments to Section 108 since the inception of GST. The core principles and powers remain consistent.
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Browse all case laws →Frequently Asked Questions
What powers does the Revisional Authority have under CGST Section 108?
Under Section 108 of the CGST Act, the Revisional Authority can, on its own motion or upon information received, call for and examine the record of any proceeding, and if it considers that the order passed therein by a subordinate officer is erroneous insofar as it is prejudicial to the interest of revenue, it may, after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as it deems necessary, pass such order as it thinks fit, including an order enhancing, modifying, annulling, reversing or setting aside the order passed or remitting the case back to the adjudicating authority for fresh adjudication.
What is the time limit for the Revisional Authority to exercise its powers under CGST Section 108?
The Revisional Authority must pass the revision order within three years from the date of the decision or order passed by the subordinate officer, or within six months from the date of receipt of the record called for, whichever is later. This is subject to exclusions provided under the law.
Under what circumstances can a Revisional Authority invoke Section 108 of the CGST Act?
The Revisional Authority can invoke Section 108 when it finds that the order passed by a subordinate officer is erroneous and prejudicial to the interests of revenue. This typically involves situations where the order results in an underassessment of tax, wrong availment of ITC, or improper refund.
Is there a right to be heard before the Revisional Authority passes an order under Section 108?
Yes, the assessee (taxpayer) is entitled to a fair opportunity of being heard before the Revisional Authority passes any order under Section 108 that is prejudicial to their interests. This ensures adherence to the principles of natural justice.
Can an order passed by the Revisional Authority under Section 108 be appealed against?
Yes, an order passed by the Revisional Authority under Section 108 is generally appealable. The appeal would lie to the appropriate appellate authority as specified under the CGST Act, usually the GST Appellate Tribunal.
What is considered 'prejudicial to the interest of revenue' for the purpose of invoking Section 108?
'Prejudicial to the interest of revenue' is a broad term that includes situations where the correct amount of tax has not been levied, assessed, or paid due to errors in the subordinate officer's order. This could encompass incorrect application of law, factual errors leading to reduced tax liability, or failure to properly investigate relevant facts.
What are the limitations on the Revisional Authority's powers under Section 108?
The Revisional Authority cannot exercise its powers if an appeal has already been filed against the order of the subordinate officer. Also, revision is typically not permitted where the order has already been subject to revision at a higher level. The power must be exercised judiciously, considering the facts and circumstances, and not arbitrarily.
Key Conditions & Requirements
| Condition | Details |
|---|---|
| Initiation of Revision | The Revisional Authority can initiate revision on its own motion, upon receiving information, or on request from the Commissioner of State tax or Union territory tax. |
| Grounds for Revision | The decision or order being revised must be: (a) erroneous, (b) prejudicial to the interest of revenue, and (c) illegal or improper or has not taken into account certain material facts, including facts available later or observation by CAG. |
| Opportunity of Being Heard | The person concerned must be given an opportunity of being heard before the Revisional Authority passes an order. |
| Restrictions on Exercise of Power | The Revisional Authority cannot exercise power if: (a) the order has been subject to appeal under Section 107, 112, 117 or 118; (b) the appeal period under Section 107(2) has not expired or more than three years have expired after the order; (c) the order has already been taken for revision; or (d) the order was passed in exercise of revisional powers. |
| Appeal Exception | The Revisional Authority can pass an order on a point not raised in an appeal before the expiry of one year from the date of the appeal order or before the expiry of three years from the date of the original order, whichever is later. |
| Exclusion of Time for Limitation | If a decision involves an issue on which the Appellate Tribunal or High Court has given a decision and an appeal is pending, the period between the dates of these decisions shall be excluded when computing the limitation period. |
| Stay by Court or Tribunal | If the issuance of an order under sub-section (1) is stayed by the order of a court or Appellate Tribunal, the period of such stay shall be excluded when computing the limitation period. |
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