GST Section 6: Understanding the Mutual Empowerment of Tax
Authorities 
Introduction
When the Goods and Services Tax (GST) was implemented in July 2017, it replaced a complex web of indirect taxes such as VAT, service tax, excise duty, and CST.
The idea was to simplify India's taxation system and ensure uniformity across the country. However, since GST is a dual taxation system—where both the center and states have the authority to impose and collect taxes—questions began to arise:
• Who will assess the taxpayers?
• Who has the authority to collect taxes in special cases?
• Can central and state tax officials work
together?
To address such issues, Section 6 of the Central Goods and
Services Tax (CGST) Act, 2017 has been introduced. It clearly defines the concept
of cross-empowerment between central and state tax authorities.
In this blog, we will explain Section 6 of GST in simple
words, explore its provisions, real-life examples, challenges, and its
importance for businesses.
What is Section 6 of GST?
Section 6 of the CGST Act mentions the provisions related to
the powers of the central and state government officials.
• It ensures that there is no duplication of tax assessments and clarifies who has the right to enforce the authority in a specific situation.
• In simple words:
Central tax officials (who are working under the CGST Act) and state tax officials (who are working under the SGST Act) have been empowered to act on behalf of each other.
• This means that any tax officer can issue notices, conduct assessments, and take action under both the CGST and SGST Acts, provided that the case is not already being handled by the other authority.
This principle is known as cross empowerment under GST. ।
Main provisions of Section 6
• Let's break down the important provisions of Section 6 to make them easier to understand:
• 1 Powers of central and state authorities (Article
6(1))
• Officers appointed under the CGST Act are authorized to act as officers under the SGST/UTGST Act. • Similarly, officers under the SGST/UTGST are authorized to operate under the CGST Act. • This avoids duplication and ensures smooth functioning.
• 2. Prohibition on double action (Section 6(2)
If a specific case has already been assigned to a central officer, then the state officer cannot take that case, and vice versa. • This can help prevent taxpayers from being troubled by multiple processes in the same case by different officers.
3.
Terms and Conditions (Section 6(3)
The government may set conditions and restrictions for cross-empowerment.
This ensures that there is no abuse of power and maintains clarity between the center and the states.
1.Why is Section 6 important?
Section 6 is extremely important for businesses, taxpayers, and government officials because it:
Prevents duplication of work, allowing businesses to avoid facing multiple assessments from central and state tax authorities for similar transactions.
Ensures smooth administration, enabling central and state officials to act in place of each other, which guarantees faster resolutions and compliance.
Reduces litigation by clearly defining jurisdiction, which minimizes unnecessary disputes between the center and the state. 6. Facilitates business.
Taxpayers do not think about which authority to contact. The single process carried out by one authority is binding.
Real-Life Examples of Section 6 in Action
Let’s make this clear with practical examples:
Example 1:
A business in Delhi is being audited by the Central GST
officer for FY 2023-24. In this case:
The State GST officer cannot initiate another audit for the same period.
Only one proceeding will be valid, avoiding duplication.
Example 2:
A trader in Karnataka is found guilty of issuing fake invoices. Here:
Both Central and State officers have the power to investigate.
But once
one authority takes charge, the other cannot duplicate the same action.
Example 3:
An e-commerce business is operating across multiple states.
A State officer in Maharashtra initiates a tax assessment under SGST Act. Due
to cross empowerment:
That
officer can also take action under the CGST Act.
This avoids the need for two separate assessments
Benefits of Cross Empowerment under Section 6
Single
Authority, Dual Powers
Saves
time for both taxpayers and authorities.
Reduces
confusion in jurisdiction.
Improves
Efficiency
Tax officers can act swiftly without waiting for coordination between Centre and State.
Better Resource Utilization
Since officers can act on behalf of each other, workload distribution becomes easier.
Uniform
Implementation of GST
Ensures
that GST laws are applied consistently across India.
Challenges in Section 6
While Section 6 has many benefits, certain challenges exist:
Jurisdictional
Confusion
Sometimes,
businesses face confusion about whether a proceeding is under CGST or SGST.
2.Coordination
Issues
If
Central and State officers don’t coordinate properly, there could still be
duplication of efforts.
3 Limited
Awareness
small
businesses may not fully understand how cross empowerment works.
Possible
Overlap in Investigations
In fraud
or evasion cases, both authorities may initiate inquiries, leading to disputes.
Section 6 and GST Council Decisions
The GST Council has played an important role in framing rules under Section 6. The Council decided that:
Taxpayers with a turnover below ₹1.5 crore are generally handled by State tax authorities.
Taxpayers
with a turnover above ₹1.5 crore are divided between Central and State
authorities in a 90:10 ratio (90% by States, 10% by Centre).
This division ensures that both Central and State
authorities have jurisdiction but also avoids overlap.
Section 6 in Simple Words
Think of Section 6 as a mutual agreement between the Centre
and States:
Either a Central officer or a state officer can act in your case.
But only one authority will proceed at a time.
Once a
case is picked by one authority, the other cannot intervene in the same matter.
Judicial Interpretations of Section 6
Over the years, courts have also explained the importance of Section 6.
Courts have emphasized that dual proceedings are not allowed.
Once jurisdiction is exercised by one authority, the other must step back.
This
ensures that taxpayers are not burdened with multiple litigations.
Impact of Section 6 on Businesses
For businesses, Section 6 has had a significant impact:
Clarity
in Tax Proceedings → They know only one authority will act.
Less Compliance Burden → No duplicate audits or investigations.
Better Trust in the GST System → Simplifies the taxpayer-government relationship.
More
Transparency → Clear rules on who has jurisdiction.
Practical Tips for Businesses under Section 6
1.Maintain Proper Records
Since
either Central or State officers can assess you, always keep your GST records
updated.
2.Know Your
Jurisdiction
Understand
whether your turnover places you under State or Central jurisdiction.
3.Respond
Promptly to Notices
If you
receive a notice, check whether it is from CGST or SGST officer. Only one
proceeding should exist.
4.Consult a Tax Expert
For
complex cases, always consult a GST practitioner to avoid compliance issues.
Advantages of Section 6 for the Government
Efficient
Use of Manpower: Both Centre and State can handle cases without duplicating
efforts.
Better
Revenue Monitoring: Helps plug tax evasion through cooperation.
Uniform
Enforcement: Ensures GST rules are applied consistently nationwide.
Conclusion
Section 6 of the CGST Act is one of the most crucial
provisions of the GST framework. It establishes the concept of cross
empowerment between Central and State tax officers, ensuring smooth tax
administration and preventing duplication of work.
For taxpayers, it provides relief from multiple proceedings,
reduces compliance burden, and ensures fairness. For the government, it enables
efficient resource utilization and uniform enforcement.
While challenges such as jurisdictional confusion and
coordination issues exist, the benefits of Section 6 far outweigh them. It
truly reflects the spirit of cooperative federalism, where both Centre and
States work together to make GST effective and business friendly.
FAQs on GST Section 6
Q1. What is Section 6 of the CGST Act?
Section 6 deals with cross empowerment of Central and State
GST officers, allowing them to act on behalf of each other.
Q2. Can both Central and State officers act simultaneously on the same case?
No. Once one authority has taken up a case, the other cannot
initiate proceedings on the same matter.
Q3. Why was Section 6 introduced?
It was introduced to prevent duplication of efforts, reduce
taxpayer burden, and improve coordination between Centre and States.
Q4. Who handles small taxpayers under GST?
As per GST Council decisions, taxpayers with turnover below
₹1.5 crore are generally handled by State authorities.
Q5. What happens if both Central and State officers issue notices for the same case?
In such cases, judicial interpretation favors that only one
proceeding should continue, and duplication is not allowed.
Q6. Does Section 6 apply to fraud and evasion cases?
Yes, both Central and State officers can initiate action,
but once one authority takes charge, the other must step back.
Q7. How does Section 6 help businesses?
It ensures that only one authority conducts proceedings,
reducing compliance burden and avoiding harassment.
