Guidelines for provisional attachment of property under section 83 of the CGST Act, 2017
GST
Dated:- 23-2-2021
Government of India
Ministry of Finance
Department of Revenue
Central Board of Indirect Taxes and Customs
GST Policy Wing
CBEC-20/16/05/2021-GST/359
Dated: 23.02.2021
To.
The Principal Chief Commissioners/Chief Commissioners/Principal Commissioners/ Commissioners of Central Tax (All)
The Principal Director Generals Director Generals (All)
Subject: Guidelines for provisional attachment of property under section 83 of the CGST Act, 2017-Reg.
I am directed to refer to the section So of the Central Goods and Services Tax Act. 2017 (hereinafter referred to as "the Act") This section provides for provisional attachment of property for the purpose of protecting the interest of revenue during the pendency of any proceeding under section 62 or section 63 or section 64 or section 67 or section 73 or section 74 of the Act.
2. Doubts have been raised by
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sary so to do. he may, by order in writing attach provisionally any property, including bank account, belonging to the taxable person in such manner as may be prescribed
(2) Every such provisional attachment shall cease to have effect after the expiry of a period of one year from the date of the order made under sub-section (1) "
3.1.2 Perusal of the above provision of the law suggests that the followings grounds must exist for resorting to provisional attachment of property under the provisions of section 83 of the Act:
(i) There must be pendency of a proceeding against a taxable person under the sections mentioned in section 83 of the Act.
(ii) The Commissioner must have formed the opinion that provisional attachment of the property belonging to the taxable person is necessary for the purpose of protecting the interest of the Government revenue.
3.1.3 For forming an opinion under section 83. it is important that Commissioner must exercise due diligence and duly consider
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e, extraordinary , has to be resorted to with utmost circumspection and with maximum care and caution.
3.2 Procedure for provisional attachment of property
3.2.1 In case, the Commissioner forms an opinion to attach any property, including bank account, of the taxable person in terms of section 83. he should duly record on file the basis, on which he has formed such an opinion. He should, Thereafter, pass an order in FORM GST DRC-22 with proper Document Identification Number (DIN) mentioning therein the details of property being attached.
3.2.2 A copy of the order of attachment should be sent to the concerned Revenue Authority or Transport Authority or Bank or the relevant Authority to place encumbrance on the said movable or immovable property. The property, thus attached, shall be removed only on the written instructions from the Commissioner.
3.2.3 A copy of such attachment order shall be provided to the said taxable person as early as possible so that objections, if any, to the
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e property was or is no longer liable for attachment, he may release such property by issuing an order in FORM GST DRC-23.
3.2.5 Each such provisional attachment shall cease to have effect after the expiry of a period of one year from the date of the order of attachment,
3.2.6 If the provisionally attached property is of perishable/hazardous nature, then such property shall be released to the taxable person by issuing order in FORM GST DRC-23, after taxable person pays an amount equivalent to the market price of such property or the amount that is or may become payable by the taxable person, whichever is lower, and submits proof of payment. In case the taxable person fails to pay the said amount, then the said property of perishable/hazardous nature may be disposed of and the amount recovered from such disposal of property shall be adjustable against the tax. interest, penalty. fee or any other amount payable by the taxable person. Further, the sale proceeds thus obtained must be dep
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supplied any goods or services or both without issue of any invoice, in violation of the provisions of the Act or the rules made there under, with an intention to evade tax: or
b. issued any invoice or bill without supply of goods or services or both in violation of the provisions of the Act, or the rules made there under: or
c. availed input tax credit using the invoice or bill referred to in clause (b) or fraudulently availed input tax credit without any invoice or bill: or
d. collected any amount as tax but has failed to pay the same to the Government beyond a period of three months from the date on which such payment becomes due; or
e. fraudulently obtained refund; or
f. passed on input lax credit fraudulently to the recipients hut has not paid the commensurate tax
3.3.2 The above list is illustrative only and not exhaustive. The Commissioner, may examine the specific facts of the case and take a reasoned view in the matter.
3.4 Types of property that can be attached
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otect the interests of revenue.
3.4.5 As far as possible, it should also be ensured that such attachment does not hamper normal business activities of the taxable person. This would mean that raw materials and inputs required for production or finished goods should not normally be attached by the Department.
3.4.6 In cases where the movable property, including bank account, belonging to taxable person has been attached, such movable property may be released if taxable person offers, in lieu of movable property, any other immovable property which is sufficient to protect the interest of revenue. Such immovable property should be of value not less than the tax amount in dispute. It should also be free from any subsisting charge, liens, mortgages or encumbrances, property tax fully paid up to date and not involved in any legal dispute. The taxable person must produce the original title deeds and other necessary information relating to the property, for the satisfaction of the concerned
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cerned taxable person in properly belonging to him and another as co-owners, the provisional attachment shall be made by order to the concerned person prohibiting him from transferring the share or interest or charging it in any way
3.8 Property exempt from attachment
All such property as is by the Code of Civil Procedure, 1908 (5 of 1408). exempted from attachment and sale for execution of a Decree of a Civil Court shall be exempt from provisional attachment
4. It may be noted that an amendment to section 83 has been proposed in Finance Bill 2021. However, such proposed amendment shall come into effect only from a date to be notified in future. The present guidelines, which are based on the existing provisions of section 83 of the Act. shall stand modified according to the amended provisions of section 83. once the said amendment comes into effect.
5.. Difficulty, if any. in the implementation of the above guidelines may please be brought to the notice of the Board.
(Sanjay Manga
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