The Central Board of Indirect Taxes and Customs (CBIC) has issued Circular No. 255/01/2026-GST dated June 25, 2026, providing comprehensive clarification on the jurisdictional authority responsible for handling proceedings under the Central Goods and Services Tax (CGST) Act, 2017, in cases where a registered taxpayer migrates or transfers from one GST jurisdiction to another due to a change in the Principal Place of Business.
The clarification has been issued to address representations received from field formations regarding the validity of proceedings initiated before the transfer of jurisdiction and to ensure uniform implementation of the law across the country.
Background
CBIC observed that practical difficulties were being faced by tax authorities regarding the continuation of investigations, audits, adjudication proceedings, appeals, and other statutory actions after a taxpayer’s jurisdiction changed. Clarification was particularly sought on:
- Whether proceedings initiated by the earlier (transferor) jurisdiction remain legally valid.
- Whether the transferor authority can continue proceedings after migration.
- Which authority is competent to undertake consequential actions, implement earlier orders, and represent the department before appellate forums.
Key Clarifications Issued by CBIC
Validity of Actions Already Taken
CBIC has clarified that any action or proceeding validly initiated by the jurisdictional officer who had authority over the taxpayer at the relevant time shall continue to remain legally valid even after the taxpayer migrates to another jurisdiction. Such proceedings shall not become invalid merely because of the subsequent change in jurisdiction.
Jurisdiction for Future Proceedings
Once the taxpayer has migrated to another jurisdiction, the jurisdictional authority of the new (transferee) jurisdiction shall assume responsibility for all subsequent stages of the proceedings. This includes implementation of earlier orders, adjudication, recovery, appeals, and all consequential actions arising from the original proceedings.
Transferor Authority Cannot Continue Fresh Action
The Circular categorically states that after migration of the taxpayer, the transferor jurisdictional authority shall not initiate any fresh proceedings or take further action against the taxpayer. If any issue comes to its notice after migration, the same should be communicated to the transferee jurisdiction for appropriate action.
Seamless Continuation of Pending Proceedings
Where proceedings are pending at the time of migration, the transferee jurisdictional authority shall continue the proceedings from the exact stage at which they stood before the transfer. The new jurisdiction shall exercise all statutory powers required to conclude such proceedings without requiring fresh initiation.
Reliance on Judicial Principles
The Circular notes that the clarification has been issued after consultation with the Union Ministry of Law and Justice and is supported by judicial principles laid down by the Hon’ble Supreme Court and various High Courts. These judicial precedents recognize that actions validly initiated by a competent authority remain enforceable, while further proceedings should be undertaken by the authority currently vested with jurisdiction.
Objective of the Circular
The Circular aims to eliminate jurisdictional ambiguity, avoid duplication of proceedings, ensure continuity in tax administration, and provide certainty to both taxpayers and GST officers regarding the authority competent to carry forward statutory proceedings after migration of jurisdiction.
Effective Clarification
The Circular are intended to bring uniformity in the administration of GST proceedings involving migration or transfer of taxpayers across jurisdictions and are applicable to all proceedings under the CGST Act, 2017 and the rules made thereunder.
The Circular can be accessed at: https://taxinformation.cbic.gov.in/view-pdf/1003329/ENG/Circulars
