Summary
The Central Board of Indirect Taxes and Customs (CBIC) has issued Circular No. 254/11/2025-GST dated 27 October 2025 to remove ambiguity regarding the authority of GST officers for issuance of pre-show cause notices, show cause notices, adjudication orders and penalty proceedings under the CGST Act, 2017.
Over time, confusion had arisen regarding which GST officer is the proper officer to initiate and adjudicate proceedings, especially in cases involving different tax amounts and multiple provisions such as Sections 74A, 75(2) and 122. This circular has been issued to bring uniformity and clarity in departmental action.
The circular clarifies that in cases covered under Section 74A of the CGST Act, which applies to determination of tax short paid, not paid, wrongly refunded or ITC wrongly availed or utilised for financial year 2024–25 onwards, the proper officer shall be determined on the basis of the monetary amount involved.
For cases involving Central Tax, ITC or refund, the Superintendent of Central Tax shall be the proper officer where the amount involved is up to Rs. 10 lakh. Where the amount exceeds Rs. 10 lakh but does not exceed Rs. 1 crore, the Deputy Commissioner or Assistant Commissioner shall be the proper officer. Where the amount exceeds Rs. 1 crore, the Additional Commissioner or Joint Commissioner shall be the proper officer.
In cases involving Integrated Tax, higher monetary limits have been prescribed. Where the IGST amount involved is up to Rs. 20 lakh, the Superintendent shall be the proper officer. Where the amount exceeds Rs. 20 lakh but does not exceed Rs. 2 crore, the Deputy Commissioner or Assistant Commissioner shall be the proper officer. Where the amount exceeds Rs. 2 crore, the Additional Commissioner or Joint Commissioner shall be the proper officer.
The circular further clarifies that where a case involves both Central Tax and Integrated Tax, the combined amount shall be considered for determining the proper officer, and the amounts shall not be examined separately.
With respect to pre-show cause notice intimation under Rule 142(1A) in Form GST DRC-01A, the circular makes it clear that the same officer who is competent to issue the show cause notice shall also issue the DRC-01A. This ensures consistency in proceedings and avoids jurisdictional disputes.
The circular also addresses situations where the tax amount increases at a later stage due to issuance of statements for subsequent periods and crosses the prescribed monetary limit. In such cases, the proceedings shall be handled by the higher authority, and the earlier officer shall issue a corrigendum and place the matter before the competent officer. It is specifically clarified that penalty amounts shall not be considered while computing monetary limits for determining jurisdiction.
In cases falling under Section 75(2) of the CGST Act, where proceedings initiated under Section 74 are required to be treated as proceedings under Section 73 due to absence of fraud or wilful misstatement, the circular clarifies that the same adjudicating authority shall continue to determine the tax liability. There is no requirement to change the proper officer in such cases.
For penalty-only proceedings under Section 122 of the CGST Act, the circular prescribes separate monetary limits for determining the proper officer. Where the penalty amount is up to Rs. 10 lakh, the Superintendent shall be the proper officer. Where the penalty exceeds Rs. 10 lakh but does not exceed Rs. 1 crore, the Deputy Commissioner or Assistant Commissioner shall be the proper officer. Where the penalty exceeds Rs. 1 crore, the Additional Commissioner or Joint Commissioner shall be the proper officer. In cases involving both Central Tax and Integrated Tax, the combined penalty amount shall be considered.
Overall, this circular brings much-needed clarity on jurisdiction and monetary limits of GST officers. It helps ensure consistency in issuance of DRC-01A, show cause notices and adjudication orders, reduces procedural disputes, and provides greater certainty to taxpayers and professionals regarding the authority handling their cases.