Amended and updated notes on section 174 of CGST Act, 2017. Detail discussion on provisions and rules related to repeal and saving.
Chapter XXI (Sections 143–174) of the Central Goods and Services Tax Act, 2017 deals with the provisions related to miscellaneous. Section 174 of CGST 2017 provides for repeal and saving.
Recently, we have discussed in detail section 173 (Amendment of Act 32 of 1994) of CGST Act 2017. Today, we learn the provisions of section 174 of Central GST Act 2017.
Section 174 of the Central Goods and Services Tax Act, 2017 has been notified by the Ministry of Finance vide Notification No. 1/2017-Central Tax, G.S.R. 605(E), dated 19.06.2017. This notification was come into force from 22nd June, 2017 i.e. the commencement date of section 174 is 22-6-2017.
| Name of Act | The Central Goods and Services Tax Act 2017 |
|---|---|
| Enacted by | Parliament of India |
| Administered by | Central Board of Indirect Taxes & Customs |
| Governing body | GST Council |
| Number of Chapters | 21 |
| Number of Sections | 174 |
| You are reading: | |
| Chapter No. | XXI |
| Chapter Name | Miscellaneous |
| Section No. | 174 |
| Section Name | Repeal and saving |
| Updated 2024 Edition | GST Law Book PDF |
Section 174 of Central GST – Repeal and saving1
Section 174 of CGST Act 2017 shall come into force on 22.06.2017 vide Notification No. 1/2017-Central Tax, G.S.R. 605(E), dated 19.06.2017.
Section 174(1) of CGST Act
Section 174(1): Save as otherwise provided in this Act, on and from the date of commencement of this Act, the Central Excise Act, 1944 (except as respects goods included in entry 84 of the Union List of the Seventh Schedule to the Constitution), the Medicinal and Toilet Preparations (Excise Duties) Act, 1955, the Additional Duties of Excise (Goods of Special Importance) Act, 1957, the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978, and the Central Excise Tariff Act, 1985 (hereafter referred to as the repealed Acts) are hereby repealed.
Section 174(2) of CGST Act
Section 174(2): The repeal of the said Acts and the amendment of the Finance Act, 1994 (hereafter referred to as “such amendment” or “amended Act”, as the case may be) to the extent mentioned in the sub-section (1) or section 173 shall not—
(a) revive anything not in force or existing at the time of such amendment or repeal; or
(b) affect the previous operation of the amended Act or repealed Acts and orders or anything duly done or suffered thereunder; or
(c) affect any right, privilege, obligation, or liability acquired, accrued or incurred under the amended Act or repealed Acts or orders under such repealed or amended Acts:
Provided that any tax exemption granted as an incentive against investment through a notification shall not continue as privilege if the said notification is rescinded on or after the appointed day; or
(d) affect any duty, tax, surcharge, fine, penalty, interest as are due or may become due or any forfeiture or punishment incurred or inflicted in respect of any offence or violation committed against the provisions of the amended Act or repealed Acts; or
(e) affect any investigation, inquiry, verification (including scrutiny and audit), assessment proceedings, adjudication and any other legal proceedings or recovery of arrears or remedy in respect of any such duty, tax, surcharge, penalty, fine, interest, right, privilege, obligation, liability, forfeiture or punishment, as aforesaid, and any such investigation, inquiry, verification (including scrutiny and audit), assessment proceedings, adjudication and other legal proceedings or recovery of arrears or remedy may be instituted, continued or enforced, and any such tax, surcharge, penalty, fine, interest, forfeiture or punishment may be levied or imposed as if these Acts had not been so amended or repealed;
(f) affect any proceedings including that relating to an appeal, review or reference, instituted before on, or after the appointed day under the said amended Act or repealed Acts and such proceedings shall be continued under the said amended Act or repealed Acts as if this Act had not come into force and the said Acts had not been amended or repealed.
Section 174(3) of CGST Act
Section 174(3): The mention of the particular matters referred to in sub-sections (1) and (2) shall not be held to prejudice or affect the general application of section 6 of the General Clauses Act, 1897 with regard to the effect of repeal.
Analysis of CGST Section 174
Section 174 of CGST Act 2017 come into force on 1st July, 2017. The provisions of CGST section 174 have to be read along with the Transition provisions in chapter XX.
This would ensure that the rights, powers, liabilities, duties, privileges, obligations etc. created under the old laws are intact and are not affected by the enactment of new law by repealing the old laws.
State sales tax and VAT laws would continue to apply in respect of goods covered by Entry 54 of State List of VII Schedule to the Constitution. Central Excise law would continue to apply in respect of goods covered by Entry 84 of Union List of VII Schedule to the Constitution.
The following laws would be repealed, as the taxes are subsumed by GST law:
State laws (refer section 173 of State GST Act):
- Entry Tax laws;
- Entertainment Tax laws;
- Luxury Tax laws;
- Value added Tax laws;
- Laws on Advertisement;
- Laws on lottery, Betting and Gambling;
- CST Act.
Central laws:
- Duty of Excise on Medicinal and Toilet Preparation Act;
- Chapter V of the Finance Act, 1994 (Service Tax law);
- Central Excise Act,1944;(except in respect of goods included in entry 84 of the seventh schedule to the constitution)
- Additional duties of Excise (Goods of Special Importance Act, 1957);
- Additional duties of Excise (Textile and textile products Act,1978);
- Additional Custom Duty (CVD);
- Special Additional Duty of Customs(SAD).
- Medical & toilet preparations (excise duties) Act,1955
- Central excise tariff Act,1985
It would be interesting to refer to the Supreme Court (SC) decision in Kolhapur Cane sugar Works Limited Vs UOI, 2000 (119) ELT 257 (SC), which has explained the effect and importance of repeal or saving clause by referring to section 6 of the General Clauses Act, 1887. Since there is a special provision in the GST Act, it would apply. Wherever the specific provision does not address a particular issue relating to repeal or saving, it is necessary to fall back on the provisions of General Clauses Act.
Section 6 in The General Clauses Act, 1897
Effect of repeal. Where this Act, or any Central Act or Regulation made after the
commencement of this Act, repeals any enactment hitherto made or hereafter to be made, then, unless a different intention appears, the repeal shall not —
- (a) revive anything not in force or existing at the time at which the repeal takes effect; or
- (b) affect the previous operation of any enactment so repealed or anything duly done or suffered thereunder; or
- (c) affect any right, privilege, obligation or liability acquired, accrued or incurred under any enactment so repealed; or
- (d) affect any penalty, forfeiture or punishment incurred in respect of any offence committed against any enactment so repealed; or
- (e) affect any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment as aforesaid, and any such investigation, legal proceeding or remedy may be instituted, continued or enforced, and any such penalty, forfeiture or punishment may be imposed as if the repealing Act or Regulation had not been passed.
Understanding Section 174 of the GST Act: Saving Clauses amidst Change
The introduction of the Goods and Services Tax (GST) in 2017 marked a significant shift in India’s indirect tax landscape. However, transitioning from the previous regime to the new system required addressing existing liabilities and ongoing legal proceedings. This is where Section 174 of the Central Goods and Services Tax Act (CGST Act) comes into play.
What is Section 174?
Section 174, titled “Repeal and saving,” serves as a crucial saving clause within the CGST Act. It outlines the consequences of repealing several pre-GST laws, ensuring continuity and safeguarding certain rights and obligations acquired under the previous regime.
Key Provisions of Section 174:
- Repeal of pre-GST laws: The section repeals various central excise and other tax laws that existed before GST. This includes the Central Excise Act, 1944, and several other acts.
- Saving of rights and obligations: Despite the repeal, Section 174 protects certain rights, privileges, obligations, and liabilities incurred under the repealed laws. This applies to:
- Taxes, duties, surcharges, penalties, fines, and interest already levied or imposed.
- Ongoing investigations, inquiries, verifications, audits, and assessments.
- Legal proceedings related to the repealed laws.
- Continuation of ongoing processes: Any proceedings initiated under the repealed laws, such as assessments, appeals, and revisions, can continue under the same laws as if the GST Act had not been implemented.
- Recovery of dues: The government retains the power to recover any arrears or dues payable under the repealed laws.
Significance of Section 174:
Section 174 provides much-needed stability and clarity during a major tax reform like GST. It ensures that:
- Businesses are not unfairly penalized for actions taken under the previous regime.
- The government can continue ongoing assessments and recover outstanding dues efficiently.
- Legal disputes arising from pre-GST transactions can be resolved smoothly.
However, it’s important to note that Section 174 has limitations:
- It only applies to specific rights and obligations accrued under the repealed laws.
- It doesn’t revive any exemptions or benefits that were withdrawn under GST.
- Complexities and ambiguities in interpretation can lead to litigation.
Conclusion:
Section 174 of the CGST Act plays a vital role in ensuring a smooth transition from the pre-GST regime to the new system. It safeguards essential rights and obligations, facilitates the continuation of ongoing proceedings, and enables efficient recovery of dues. However, it’s crucial to understand its limitations and seek professional guidance for specific situations.
Disclaimer: This article is for informational purposes only and should not be taken as legal advice. Please consult a qualified tax professional for any specific concerns regarding Section 174 of the GST Act.
- Section 174 of CGST Act 2017 shall come into force on 22.06.2017 vide Notification No. 1/2017-Central Tax, G.S.R. 605(E), dated 19.06.2017. ↩︎