CBIC Issues Advisory on Process For GST Provisional Attachment Under Section 83(2)

The Central Board of Indirect Taxes and Customs (CBIC) has issued guidelines for complying with Section 83(2) of the CGST Act, 2017, which deals with the cessation of provisional attachment of property.

To simplify matters for taxpayers, the CBIC has outlined a procedure for such situations. Under this procedure, the Commissioner will send a communication or notice to the relevant authority or bank, highlighting the details of the Order or Form DRC-22 that led to the provisional attachment. 

This communication will also reference Section 83(2) of the CGST Act, 2017, and state that the property or account in question is being released or restored in accordance with these provisions. 

The person involved will also receive a copy of this communication. This process should be implemented promptly, including for addressing pending cases.

GST Section 83 allows for the issuance of orders to provisionally attach property and bank accounts to safeguard the revenue's interests in specific cases. Presently, the procedure for provisional attachment and the release or restoration of property is outlined in Rule 159 of the CGST Rules, 2017.

Section 83(2) of the CGST Act, 2017 specifies that the provisional attachment will automatically expire after one year from the date of the order issued under subsection (1).

In situations where applicable provisions, like the provisional attachment of a bank account, are involved, there have been instances where individuals have filed writ petitions requesting the Commissioner to issue a notice confirming the release of such provisional attachment. 

This request is often made because banks and relevant authorities require such confirmation. Some of these cases have been presented before the Delhi High Court.

Upon consultation with the policy division, it has been noted that as per the legal provisions in section 83(2) and rule 159, the property is no longer subject to provisional attachment. 

However, it is deemed necessary to further discuss and take steps to include a prescribed language for the release or restoration of provisional attachment in a specific form, akin to GST DRC-23."

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