CGST Act 2017 Section 167

The Central Goods and Services Tax Act, 2017 is a comprehensive legislation governing the levy and collection of GST in India. It provides detailed provisions on various aspects such as registration, supply, tax payment, assessment, and enforcement. Section 167 of the CGST Act, 2017 specifically deals with the provisional attachment of property in cases where tax evasion is suspected.

Understanding Section 167 is crucial for taxpayers, businesses, GST officers, and legal professionals. The CGST Act empowers authorities to provisionally attach property to prevent its disposal or transfer during investigations. This section plays a vital role in safeguarding government revenue and ensuring compliance with GST laws.

Central Goods and Services Tax Act, 2017 Section 167 – Exact Provision

Section 167 empowers GST officers to provisionally attach goods, documents, or property suspected to be involved in tax evasion. This attachment prevents disposal or transfer while investigations proceed. The provisional attachment lasts up to one year unless confirmed by the jurisdictional authority. The authority must hear the affected person before confirming or revoking the attachment. This ensures a fair process balancing revenue protection and taxpayer rights.

• Allows provisional attachment of goods, documents, or property suspected of tax evasion.

• Attachment period limited to one year unless confirmed.

• Requires application to jurisdictional authority within seven working days.

• Authority must provide hearing before confirmation or revocation.

• Final order on confiscation or release within six months of confirmation.

Explanation of CGST Act Section 167

Section 167 outlines the process for provisional attachment of property under GST law. It applies to goods, documents, or other property suspected to be liable for confiscation.

• States that proper officer can attach property provisionally if tax evasion is suspected.

• Applies to registered persons, unregistered persons, and others holding goods or documents.

• Attachment is temporary and must be confirmed by jurisdictional authority.

• Triggering event is belief of possession of liable goods or documents.

• Allows due process with opportunity of hearing before confirmation.

• Attachment helps prevent disposal or transfer during investigation.

Purpose and Rationale of CGST Act Section 167

The section aims to protect government revenue by preventing the disposal of goods or property involved in tax evasion. It balances enforcement with taxpayer rights by requiring confirmation and hearing.

• Ensures uniform enforcement of GST laws.

• Prevents tax evasion and revenue leakage.

• Streamlines investigation process by securing evidence.

• Promotes compliance through deterrence.

• Supports recovery of dues by safeguarding assets.

When CGST Act Section 167 Applies

This section applies during investigations where tax evasion or confiscation risk is suspected. It is relevant for goods or documents related to taxable supply.

• Applicable to goods or documents liable for confiscation.

• Relevant during investigation or audit stages.

• Focuses on intra-state and inter-state supplies.

• Triggered when proper officer suspects evasion or concealment.

• Does not apply after final adjudication or release orders.

Tax Treatment and Legal Effect under CGST Act Section 167

Provisional attachment does not itself create tax liability but restricts disposal of property. It safeguards government interest pending final adjudication. The attachment interacts with assessment and confiscation provisions.

The tax liability is determined separately through assessment. Attachment ensures property remains available for recovery if dues are confirmed. It does not grant ownership rights but restricts transfer or use.

• Restricts disposal of attached goods or property.

• Supports recovery of tax, interest, and penalties.

• Does not substitute assessment or adjudication process.

Nature of Obligation or Benefit under CGST Act Section 167

Section 167 creates a compliance obligation on persons holding attached property. It imposes restrictions but also protects government revenue. The obligation is mandatory once attachment is ordered.

The provision benefits tax authorities by securing assets. Taxpayers must comply or face legal consequences. The section does not provide exemptions but safeguards due process.

• Creates mandatory compliance obligation on affected persons.

• Restricts transfer, disposal, or use of attached property.

• Benefits government revenue protection efforts.

• Requires cooperation during investigation.

Stage of GST Process Where Section Applies

Section 167 applies primarily during investigation, audit, or inquiry stages before final adjudication. It is a procedural step to secure evidence and assets.

• Investigation or inquiry stage.

• Before or during assessment proceedings.

• Not applicable during return filing or payment stages.

• Precedes confiscation or penalty orders.

• May be invoked during appeal or recovery if needed.

Penalties, Interest, or Consequences under CGST Act Section 167

Non-compliance with attachment orders can lead to penalties or prosecution. The section itself does not impose penalties but supports enforcement actions.

Interest and penalties arise from underlying tax defaults. Attachment helps prevent concealment or dissipation of assets, reducing risk of loss to revenue.

• Failure to comply may attract penalties under GST law.

• Prosecution possible for obstruction or concealment.

• Attachment supports recovery of interest and penalties.

• Non-compliance may lead to confiscation of goods.

Example of CGST Act Section 167 in Practical Use

Taxpayer X is under investigation for suspected tax evasion involving high-value goods. The GST officer finds that Taxpayer X holds goods likely to be concealed or transferred. The officer provisionally attaches these goods under Section 167 to prevent disposal.

The officer applies to the jurisdictional authority within seven days. After hearing Taxpayer X, the authority confirms the attachment. The goods remain attached until final adjudication. This prevents loss of government revenue and ensures compliance.

• Attachment prevents disposal of goods during investigation.

• Ensures taxpayer gets hearing before confirmation.

Historical Background of CGST Act Section 167

GST was introduced in 2017 to unify indirect taxes. Section 167 was designed to empower officers to protect revenue during investigations.

• Introduced as part of CGST Act, 2017 enforcement provisions.

• Aimed to curb tax evasion and asset dissipation.

• Amended through GST Council decisions to streamline procedures.

Modern Relevance of CGST Act Section 167

In 2026, Section 167 remains vital for digital GST compliance and enforcement. With e-invoicing and electronic records, attachment helps secure physical goods and documents.

• Supports digital compliance by securing physical evidence.

• Relevant for enforcement in complex supply chains.

• Ensures government revenue protection in evolving GST landscape.

Related Sections

• CGST Act, 2017 Section 7 – Scope of supply.

• CGST Act, 2017 Section 9 – Levy and collection of tax.

• CGST Act, 2017 Section 16 – Eligibility for input tax credit.

• CGST Act, 2017 Section 31 – Tax invoice.

• CGST Act, 2017 Section 39 – Furnishing of returns.

• CGST Act, 2017 Section 73 – Demand for non-fraud cases.

Case References under CGST Act Section 167

No landmark case directly interprets this section as of 2026.

Key Facts Summary for CGST Act Section 167

• Section: 167

• Title: Provisional Attachment of Property

• Category: Enforcement, Procedure

• Applies To: Taxpayers, GST officers, persons holding goods or documents

• Tax Impact: Restricts disposal of property suspected of tax evasion

• Compliance Requirement: Mandatory compliance with attachment orders

• Related Forms/Returns: Not directly linked to specific forms

Conclusion on CGST Act Section 167

Section 167 of the CGST Act, 2017 is a critical enforcement tool that empowers GST officers to provisionally attach goods, documents, or property suspected of being involved in tax evasion. This provision helps safeguard government revenue by preventing the disposal or transfer of assets during investigations.

While the attachment is provisional and subject to confirmation by the jurisdictional authority, it balances enforcement needs with taxpayer rights by ensuring due process. Understanding this section is essential for taxpayers and professionals to comply effectively and for officers to enforce GST laws efficiently.

FAQs on CGST Act Section 167

What is the purpose of provisional attachment under Section 167?

Provisional attachment prevents disposal or transfer of goods or property suspected of tax evasion during investigations. It safeguards government revenue until final adjudication.

Who can order provisional attachment under this section?

The proper officer authorized under the CGST Act can order provisional attachment if there are reasons to believe property is liable for confiscation.

How long does the provisional attachment last?

Provisional attachment can last up to one year unless confirmed earlier by the jurisdictional authority, which must decide within six months of confirmation.

Can the person affected by attachment be heard?

Yes, the jurisdictional authority must provide an opportunity of hearing before confirming or revoking the provisional attachment.

Does provisional attachment create a tax liability?

No, it does not create tax liability but restricts disposal of property to protect revenue pending assessment and adjudication.