Section 174 of GST – Repeal and saving
Statutory provision (1) Save as otherwise provided in this Act, on and from the date of commencement of this Act, the Central Excise Act, 1944 (except as respects goods included in entry 84 of the Union List of the Seventh Schedule to the Constitution), the Medicinal and Toilet Preparations (Excise Duties) Act, 1955, the Additional Duties of Excise (Goods of Special Importance) Act, 1957, the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978, and the Central Excise Tariff Act, 1985 (hereafter referred to as the repealed Acts) are hereby repealed.(2) The repeal of the said Acts and the amendment of the Finance Act, 1994 (hereafter referred to as “such amendment” or “amended Act”,) to the extent mentioned in the sub-section (1) or section 173 shall not—
(a) revive anything not in force or existing at the time of such amendment or repeal; or(b) affect the previous operation of the amended Act or repealed Acts and orders or anything duly done or suffered thereunder; or(c) affect any right, privilege, obligation, or liability acquired, accrued or incurred under the amended Act or repealed Acts or orders under such repealed or amended Acts
Provided that any tax exemption granted as an incentive against investment through a notification shall not continue as privilege if the said notification is rescinded on or after the appointed day; or
(d) affect any duty, tax, surcharge, fine, penalty, interest as are due or may become due or any forfeiture or punishment incurred or inflicted in respect of any offence or violation committed against the provisions of the amended Act or repealed Acts; or(e) affect any investigation, inquiry, verification (including scrutiny and audit), assessment proceedings, adjudication and any other legal proceedings or recovery of arrears or remedy in respect of any such duty, tax, surcharge, penalty, fine, interest, right, privilege, obligation, liability, forfeiture or punishment, as aforesaid, and any such investigation, inquiry, verification (including scrutiny and audit), assessment proceedings, adjudication and other legal proceedings or recovery of arrears or remedy may be instituted, continued or enforced, and any such tax, surcharge, penalty, fine, interest, forfeiture or punishment may be levied or imposed as if these Acts had not been so amended or repealed;(f) affect any proceedings including that relating to an appeal, review or reference, instituted before on, or after the appointed day under the said amended Act or repealed Acts and such proceedings shall be continued under the said amended Act or repealed Acts as if this Act had not come into force and the said Acts had not been amended or repealed.
(3) The mention of the matters referred to in sub-sections (1) and (2) shall not be held to prejudice or affect the general application of section 6 of the General Clauses Act, 1897 with regard to the effect of repeal.
Analysis and Updates
Introduction These provisions indicate the extent of erstwhile indirect tax laws, which would continue upon introduction of CGST Act. It also provides for exceptions as to continuation of certain provisions of the erstwhile laws for the sake of smooth transition. Further certain Acts would be repealed upon introduction of CGST Act. Analysis
(a) These provisions have to be read along with the Transition provisions in chapter XX.(b) It came into force on the date of enactment of the CGST Act i.e.01-07-2017.(c) Whenever an enactment is repealed or substituted by a new enactment then the new enactment should provide for a clause relating to repeal or saving of certain provisions under the old law.(d) This would ensure that the rights, powers, liabilities, duties, privileges, obligations etc. created under the old laws are intact and are not affected by the enactment of new law by repealing the old laws.(e) Entry 84 of the Union List and Entry 54 of the State List, both forming part of the VII Schedule to the Constitution as amended by the Constitutional (101st Amendment) Act 2016 would continue to apply to certain goods.(f) For the said purpose, the General Sales Tax/VAT / CST laws and Central Excise Act, 1944 and Central Excise Tariff Act, 1985 would continue to apply – E.g. Certain petroleum products, tobacco products.(g) Thus, these laws would operate even after the GST is introduced to the extent they continue to operate in respect of goods that still remain under the earlier laws, as amended by the Taxation Laws Amendment Act, 2017.(h) Subject to the above comments the following laws would be repealed, as the taxes are subsumed by GST law:
State laws (refer section 173 of State GST Act):
(i) Entry Tax laws;(ii) Entertainment Tax laws;(iii) Luxury Tax laws;(iv) Value added Tax laws;(v) laws on Advertisement;(vi) laws on lottery, Betting and Gambling;(vii) CST Act.
Central laws:
(i) Duty of Excise on Medicinal and Toilet Preparation Act;(ii) Chapter V of the Finance Act, 1994 (Service Tax law);(iii) Central Excise Act,1944;(except in respect of goods included in entry 84 of the seventh schedule to the constitution)(iv) Additional duties of Excise (Goods of Special Importance Act, 1957);(v) Additional duties of Excise (Textile and textile products Act,1978);(vi) Additional Custom Duty (CVD);(vii) Special Additional Duty of Customs(SAD).(viii) Medical & toilet preparations (excise duties) Act,1955(ix) Central excise tariff Act,1985
Section 6 in The General Clauses Act, 1897 Effect of repeal. Where this Act, or any Central Act or Regulation made after the commencement of this Act, repeals any enactment hitherto made or hereafter to be made, then, unless a different intention appears, the repeal shall not— (a) revive anything not in force or existing at the time at which the repeal takes effect; or (b) affect the previous operation of any enactment so repealed or anything duly done or suffered thereunder; or (c) affect any right, privilege, obligation or liability acquired, accrued or incurred under any enactment so repealed; or (d) affect any penalty, forfeiture or punishment incurred in respect of any offence committed against any enactment so repealed; or (e) affect any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment as aforesaid, and any such investigation, legal proceeding or remedy may be instituted, continued or enforced, and any such penalty, forfeiture or punishment may be imposed as if the repealing Act or Regulation had not been passed. Issues and Controversies Can ST audit be taken up now. does it amount to new proceedings being initiated or continuation of saved actions? As ST audit is a ‘new investigation’, High Courts have expressed reservation that something that is ‘not saved’ by section 6 of General Clauses Act can derive authority if ST audits were permitted. Care must be taken to differentiate between continuation of proceedings versus commencement of new proceedings. Comparative review It would be interesting to refer to the Supreme Court decision in Kolhapur Cane sugar Works Limited Vs UOI, 2000 (119) ELT 257 (SC), which has explained the effect and importance of repeal or saving clause by referring to section 6 of the General Clauses Act, 1887. Since there is a special provision in the GST Act, it would apply. Wherever the specific provision does not address a particular issue relating to repeal or saving, it is necessary to fall back on the provisions of General Clauses Act. MCQs Q1. The ___________ law which is not repealed after enactment of GST.(a) Entry Tax law(b) VAT law(c) Company law(d) Central Excise law. Ans. (a) Company Law. Q2. Central Excise law would continue to apply in respect of goods covered by Entry _____ of Union List of VII Schedule to the Constitution.(a) 84(b) 85(c) 54(d) 47 Ans. (a) 84 Q3. State sales tax and VAT laws would continue to apply in respect of goods covered by Entry _____ of State List of VII Schedule to the Constitution.(a) 84(b) 85(c) 54(d) 47 Ans. (c) 54. Q4. After enactment of GST law, all departmental appeals filed in respect of Central Excise and Service Tax would _____________(a) continue(b) abate(c) fail(d) none of the above. Ans. (a) continue Recommended Articles –
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