Is Circular issued by CBIC binding upon state officer

[SHARAD ANADA]

Various circulars were issued by CBIC. Whether all the circulars (if no seperate circular is issued by state on the subject matter) are binding upon state?

[Alkesh Jani]

Shri

The query raised by you is highly technical. my view on the matter is that CGST Act is enacted by Central Govt. and SGST Act is enacted by State Govt. Therefore, Notifications, Circulars, Instruction, Orders are required to be issued under the power given under the provisions of respective law. The Officers are appointed under respective law, therefore, only appointed officers can exercise the power conferred under respective law.

It is also observed that enacting law in the respective state language provision becomes contestable while it is clear in the Central law.

Concluding, I am of the view that any Circulars, notification etc issued under CGST is for CGST only and State is required to issue under the State law.

Thanks

[Ganeshan Kalyani]

Say CGST is 9% is reduced to 6% by Central Government by way of notification. State Government is yet to publish the notification, then, will the taxpayer is required to charge - CGST 6% & SGST 9%. GSTN calculates the tax after typing taxable value under respective tax head. Here, taxpayer has to type taxable against 18% or 12% but not both. So it is practically understood that if central government issues notification then state government is also to follow the same. The reduction is rate of tax (for instance) is recommended by GST Council where FM is chairman and all State FM are the members. So logicall State government also agrees to the change in tax law. Hence, my view is notification issued by central government is binding on the state government as well. But not the vice-versa.

[Shilpi Jain]

Gst law was introduced with a view to have one tax for the nation. Also applying that a particular clarification is applicable for cgst only and not sgst component, will lead to absurd results.

Ideally the circulars issued under cgst, just like the notifications, should be replicated under sgst also (may not be vice versa).

Also off late we see some instructions and circulars or SOPs being issued by the state tax departments ( Tamil Nadu, Maharashtra).

[Alkesh Jani]

Hon'ble Experts,

The views expressed is logical in nature and not backed by any legal force. limiting the discussion for circular, it settled law that Circulars are clarification in nature and not binding to Court or assessee, it is binding to the department.

For technical issue, relevant portion of an article and its link is given below

"Article 246 clearly demarcates the subject matters where the Union and the States have their legislative competence and Article 254 deals with the issues of inconsistency or repugnancy of laws made by the Parliament and the State Legislatures. Article 246(2) does not provide for concurrent levy of tax, it lists the subject matters where both the States and Centre have legislative capacity but the laws made by them are independent of one another..."

"The Ministry of Finance (Department of Revenue) clarified their position with the narrative that they agree to the fact that both Centre and States will have power to simultaneously levy GST on supply of goods and services but this power was not being given through an entry in the Concurrent List but through insertion of an Article in the main body of the Constitution itself..."

Link :-An Article

Lastly from myside, the views given by me may be out of blue or within the blue but is debatable, if it is debatable, it is admissible, and if it is admissible, it the court to give the verdict. I am lucky to have Experts to give their expert views in this forum, but I am unlucky to get verdict from this forum.

Thanks

AI Summary

Binding effect of central circulars: they clarify CGST administration but are not judicially binding and states should issue SGST equivalents.
Circulars issued by the CBIC function as departmental clarifications under central law applicable to the CGST component and are administratively binding on the issuing department but not judicially binding on courts or taxpayers. States are formally required to issue SGST equivalents under their statutory powers, though GST Council recommendations and administrative practice commonly produce practical uniformity; several states have begun issuing their own circulars, instructions or SOPs to replicate or align with central guidance.