Clarifying Jurisdiction, Proper Officer Assignment, and Monetary Limits under Sections 74A, 75(2) and 122 of the CGST Act. CBIC Circular No. 254/11/2025-GST

The Central Board of Indirect Taxes and Customs (CBIC), vide Circular No. 254/11/2025-GST dated 27 October 2025, has issued critical clarifications on the assignment of “proper officers”, jurisdictional competence, and monetary thresholds for proceedings under sections 74A, 75(2), and 122 of the Central Goods and Services Tax Act, 2017, read with the Integrated Goods and Services Tax Act, 2017.

The circular addresses a long-standing administrative and legal vacuum, particularly with respect to the newly inserted section 74A, applicable from FY 2024–25 onwards, and aims to ensure uniformity, legality, and administrative efficiency in GST adjudication.

Legislative Background and Need for the Circular

While earlier CBIC circulars (June–July 2017 and February 2018) had assigned proper officers for most provisions of the CGST and IGST Acts, no express assignment existed for:

• Section 74A (new determination provision for tax short-paid, ITC wrongly availed, etc.),
• Section 75(2) (re-determination where fraud allegations fail),
• Section 122 (penalties for specified offences), and
• Rule 142(1A) (pre-SCN intimation via FORM GST DRC-01A).

Given judicial scrutiny around jurisdictional competence of officers, the absence of express assignment posed risks of invalid proceedings and litigation exposure. The circular remedies this defect by explicitly invoking section 2(91) read with section 5 of the CGST Actand section 20 of the IGST Act.

Assignment of Proper Officers: Section 74A, Section 122, and Rule 142(1A)

The Board has assigned the following officers as proper officers:

• Additional / Joint Commissioner of Central Tax
• Deputy / Assistant Commissioner of Central Tax
• Superintendent of Central Tax

for exercising powers under:

• Section 74A(1)–(10) (determination of tax for FY 2024–25 onwards),
• Section 122 (penalty proceedings), and
• Rule 142(1A) (pre-SCN consultation).

This assignment provides statutory backing to proceedings initiated under these provisions, strengthening their legal sustainability.

Monetary Limits under Section 74A: Jurisdictional Competence

To ensure optimal workload distribution and proportionality, the circular prescribes monetary thresholds for issuance of show cause notices and adjudication under section 74A:

Central Tax / IGST / Combined Tax (including cess)

• Superintendent
  – Up to Rs. 10 lakh (CGST) / Rs. 20 lakh (IGST or combined)
• Deputy / Assistant Commissioner
  – Above Rs.10 lakh up to Rs. 1 crore (CGST)
  – Above Rs. 20 lakh up to Rs. 2 crore (IGST or combined)
• Additional / Joint Commissioner
  – Above Rs.1 crore (CGST) / Rs. 2 crore (IGST or combined) with no upper limit

Key Clarifications

• Jurisdiction is determined on the combined amount of CGST and IGST, irrespective of individual tax components.
• Penalties are excluded when computing monetary limits.
• Where subsequent statements (under sections 73/ 74/ 74A(3) & (4)) exceed the original officer’s competence, jurisdiction shifts upward, and a corrigendum must be issued.

Continuity and Escalation in Multi-Period Demands

The circular introduces a structured mechanism for cases involving multiple tax periods:

• The highest tax amount across SCN and subsequent statements determines the competent officer.
• If escalation occurs due to higher demand in later periods, the earlier SCN must be made answerable to the higher adjudicating authority.
• Where there is no change in monetary competence, the same officer continues adjudication.

Special provision is made for cases initiated by Audit Commissionerates, ensuring adjudication remains with the jurisdictional Commissionerate, preserving administrative consistency.

Section 75(2): Re-determination Where Fraud Allegation Fails

Section 75(2) addresses situations where appellate authorities or courts hold that fraud, wilful misstatement, or suppression is not established, rendering a section 74 notice unsustainable.

The circular clarifies that:

• The same adjudicating authority who handled the original SCN under section 74 shall act as the proper officer for re-determination under section 73 (deemed).

This ensures procedural continuity, avoids jurisdictional conflict, and reduces administrative duplication.

Monetary Limits under Section 122: Penalty-Only Proceedings

For penalty-only notices under section 122, separate monetary thresholds are prescribed:

• Superintendent:
  – Up to Rs.10 lakh (CGST) / Rs.20 lakh (IGST or combined)
• Deputy / Assistant Commissioner:
  – Above Rs.10 lakh up to Rs.1 crore (CGST)
  – Above Rs. 20 lakh up to Rs. 2 crore (IGST or combined)
• Additional / Joint Commissioner:
  – Above Rs. 1 crore (CGST) / Rs. 2 crore (IGST or combined), without limit

Where penalties involve both CGST and IGST, jurisdiction is determined based on the combined penalty amount.

Legal and Practical Significance

This circular has far-reaching implications:

1. Cures jurisdictional defects that could invalidate SCNs and orders.
2. Enhances legal defensibility of proceedings under section 74A.
3. Brings predictability and uniformity in officer competence.
4. Reduces forum shopping and overlapping jurisdiction.
5. Provides clarity to taxpayers on who can issue notices and adjudicate disputes.

From a litigation standpoint, the circular will likely play a decisive role in defending departmental actions against challenges based on lack of authority or improper officer designation.

Conclusion

CBIC Circular No. 254/11/2025-GST is a foundational administrative instrument in the post-74A GST regime. By explicitly assigning proper officers, prescribing monetary limits, and clarifying procedural contingencies, it strengthens the rule of law, administrative discipline, and certainty in GST enforcement.

For taxpayers, professionals, and departmental officers alike, the circular serves as a compliance compass, ensuring that adjudication under the GST framework is not only efficient but also legally robust.