Section 83 Provisional Attachment to protect revenue

Section 83 Provisional Attachment to protect revenue
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Overview

Section 83 of CGST Act,2017 empowers the Commissioner to provisionally attach the property including the bank account if it is required to protect the interest of Revenue. GST law has given a very drastic power in the hands of competent authorities but the same shall be exercised cautiously and only for the limited purpose as covered by section 83.

Once the amendment to this section is notified, it will widen the scope for Government. For that instance, if Commissioner is of the opinion that the taxpayer has failed to correctly self-assess the liability and it is necessary to protect the revenue of the Government, it may pass an order for provisional attachment u/s 83.

Section 83 of CGST Act,2017 – Provisional attachment to protect revenue in certain cases

(1) Where during the pendency after the initiation of any proceedings under section 62 or section 63 or section 64 or section 67 or section 73 or section 74, Chapter XII, Chapter XIV or Chapter XV  the Commissioner is of the opinion that for the purpose of protecting the interest of the Government revenue, it is necessary so to do, he may, by order in writing attach provisionally any property, including bank account, belonging to the taxable person or any person specified in sub-section (1A) of section 122 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).

Note: It was substituted by the Finance Bill 2021, but it will be made effective only after notification in this regard is issued after discussion in the GST Council Meeting.

Who is empowered to issue an order for provisional attachment?| Who can issue order u/s 83?

Commissioner is empowered to issue an order under section 83 if the Commissioner forms an opinion that provisional attachment of property including the bank account is necessary to protect the interest of revenue.

Note: Honourable Courts have emphasized that the context of the subjective satisfaction should be recorded in writing by the competent authority for issuing order  u/s 83. 

A snippet of the guidelines issued to Chief Commissioners and Commissioners by CBIC

When an order for provisional attachment can be issued? | When an order u/s 83 can be issued?

Before amendment 

After amendment
Order u/s 83 can be passed only during the pendency of proceedings u/s 62, 63, 64, 67, 72, 73, and 74.

Order u/s 83 can be passed only after the initiation of proceedings under chapter XII, XIV,  and XV.

 

Whose property including a bank account can be provisionally attached u/s 83?

Before amendment 

After amendment
Any property including the bank account which belonged to the taxable person.

Any property including the bank account which belonged to the taxable person.

or

Any property including the bank account which belonged to any person specified u/s 122(1A)

Who is the specified person u/s 122(1A)?

Any person who has retained the benefit of a transaction covered u/s 122(i), (ii), (vii), (ix)

AND

Any person on whose instruction/ guidance transactions covered u/s 122(i), (ii), (vii), (ix) were conducted.

Transactions covered u/s 122(i), (ii), (vii), (ix)

⇒ Where goods or services or both were supplied without the issuance of invoice or incorrect invoice or false invoice.

⇒ Where an invoice or bill of supply is issued without the actual supply of goods or services or both.

⇒Where input tax credit is taken or utilized without actual receipt of goods or services or both.

⇒ Where input tax credit is taken or distributed in contravention of section 20.

Penalty notified u/s 122(1A)

It will be equivalent to the amount of the tax evaded or input tax credit availed.

Note: Sub-section (1A) to section 122 was inserted by Finance Act 2020 which was brought in force on 1st January 2021 vide a CGST Notification no.1 dated 01.01.2021.

For how long the property including the bank account can be provisionally attached u/s 83?

Any provisional attachment will continue to be valid for a period of 1 year from the date of passing order u/s 83(1).

Scope of  invoking provisional attachment of property including bank account has been widened

 Before the amendment  After the amendment
 Sec 62: Assessment of non-filers of returns

Sec 63: Assessment of unregistered persons

Sec 64: Summary assessment in certain special cases

Sec 67: Power of inspection, search, and seizure

Sec 72: Officers to assist proper officers

Sec 73: Determination of tax for any reason other than fraud or any wilful misstatement or suppression of facts

Sec 74: Determination of tax for the reason of fraud or any wilful misstatement or suppression of facts

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Chapter XII – Assessment

Sec 59: Self-assessment

Sec 60: Provisional assessment

Sec 61: Scrutiny of returns

Sec 62: Assessment of non-filers of returns

Sec 63: Assessment of unregistered persons

Sec 64: Summary assessment in certain special cases

 Chapter XIV – Inspection, search, seizure, and arrest

Sec 67: Power of inspection, search, and seizure

Sec 68: Inspection of goods in movement

Sec 69: Power to arrest

Sec 70: Power to summon persons to give evidence and produce documents

Sec 71: Access to business premises

Sec 72: Officers to assist proper officers

 Chapter XV – Demands and recovery

Sec 73: Determination of tax for any reason other than fraud or any wilful misstatement or suppression of facts

Sec 74: Determination of tax for the reason of fraud or any wilful misstatement or suppression of facts

Sec 75: General provisions relating to the determination of tax

Sec 76: Tax collected but not paid to Government

Sec 77: Tax wrongfully collected and paid to Central Government or State Government

Sec 78: Initiation of recovery proceedings

Sec 79:  Recovery of tax

Sec 80: Payment of tax and other amounts in installments

Sec 81: Transfer of property to be void in certain cases

Sec 82: Tax to be the first charge on property

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About CA Ankita Khetan 161 Articles
Ankita is a Chartered Accountant in practice and holds a Diploma in IFRS (from ACCA, UK). She is also a Commerce PG and Certified Independent Director (from IICA). She holds a certification in Forex and Treasury Management. Her area of expertise is GST and Income tax. She is passionate about reading, writing, and sharing knowledge on areas related to finance and taxation.

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