GST Enforcement & Recovery Framework Operationalised

Notification No.: 15/2017 – Central Tax
Date of Notification: 1st July 2017
Relevant Sections and Rules:

• Central GST Act, 2017: Section 164
• Central GST Rules, 2017 (Amended/Inserted): Rules 44, 96, 96A, 117, 119, 138–162
• Integrated GST Act: Not directly applicable

Summary of Notification

1. Amendment to Rule 44 (Transitional Provisions – ITC Reversal):
   Substitutes the scope of applicable taxes from just “IGST and CGST” to now include “central tax, State tax, Union territory tax and integrated tax” ensuring comprehensive treatment for reversal of credit on inputs held in stock.
2. Amendment to Rule 96 (Refund of IGST on Exports):
   Adds clarity by including FORM GSTR-3B as an acceptable return for claiming export refunds in place of GSTR-3, aligning with transitional filing practices.
3. Insertion of Rule 96A – Exports under Bond/LUT without Payment of IGST:
   Enables exporters to supply goods or services without IGST payment, subject to filing bond or LUT in FORM GST RFD-11. Specifies export timelines and recovery process for non-compliance.
4. Amendments to Transitional and Job Work Rules:

• Rule 117: Clarifies “eligible duties and taxes” for ITC transition.
• Rule 119: Corrects heading from “agent” to “job-worker”.

5. Insertion of Chapter XVII – Inspection, Search and Seizure (Rules 139–141):
   Operationalizes procedures under Section 67 including authorization, seizure, inventory, and release of goods. Associated forms: GST INS-01 to INS-05.
6. Insertion of Chapter XVIII – Demands and Recovery (Rules 142–161):
   Establishes structured recovery mechanisms:

• Notices, auctions, attachments, garnishee orders.
• Provisional attachments, recovery from court decrees, and sureties.
• Facility for instalment payments (Rule 158) via FORM GST DRC-20 and related orders.

7. Insertion of Chapter XIX – Offences and Penalties (Rule 162):
   Introduces procedure for compounding of offences under Section 138. Application to be made in FORM GST CPD-01, order in FORM GST CPD-02.
8. Expanded List of Refund and Recovery Forms:
   Additional operational forms for refund (e.g., FORM GST RFD-11) and recovery (e.g., DRC-09 to DRC-25) are notified, enhancing procedural clarity.

Effective Date:
All rules and amendments are effective from 1st July 2017.

Source: Notification No.: 15/2017 – Central Tax