Understanding CBIC Circular 254/11/2025-GST – Proper Officer Jurisdiction and Monetary Limits Explained

The Central Board of Indirect Taxes and Customs (CBIC) has issued Circular No. 254/11/2025-GST dated 27/10/2025 to assign “proper officers” for functions under key provisions of the Central Goods and Services Tax Act, 2017—notably Sections 74A, 75(2), and 122, along with Rule 142(1A) of the CGST Rules.

This circular fills a crucial administrative gap by specifying which officers are empowered to issue show cause notices (SCNs) and adjudicate orders under these newly applicable or previously unassigned provisions.

Key Highlights of the Circular

Section 74A – Determination of Tax (Effective from FY 2024–25)

Section 74A deals with the determination of tax not paid, short paid, or ITC wrongly availed or utilized, applicable from FY 2024–25 onwards.
CBIC has assigned the following hierarchy of officers to act as proper officers under this section:

The monetary limit will be determined based on the combined amount of CGST and IGST, not individually.

Section 75(2) – Determination after Appellate Decisions

If an appellate authority, tribunal, or court concludes that a notice issued under Section 74(1) (fraud/wilful misstatement cases) is not sustainable, the same officer who issued that notice will act as the proper officer to re-determine tax liability as if under Section 73(1).

This ensures continuity and accountability in adjudication.

Section 122 – Penalties for Certain Offences

CBIC has also notified proper officers and monetary limits for issuing penalty-only show cause notices and orders under Section 122:

When both Central Tax and Integrated Tax penalties are involved, the combined penalty determines the jurisdiction.

Rule 142(1A) – Pre-SCN Intimation in DRC-01A

The circular also designates the same hierarchy of officers as “proper officers” for issuing FORM GST DRC-01A communications before formal issuance of SCNs under Sections 73, 74, or 74A.

This aims to promote voluntary compliance and reduce litigation.

Additional Clarifications

• Combined Demand Basis: When a single SCN involves both CGST and IGST, officer competency will be determined by combined demand, not individual tax heads.
• Subsequent Period Statements: If a subsequent statement increases demand beyond the officer’s monetary limit, the case must be transferred to a higher competent officer through corrigendum.
• Audit Commissionerate Cases: Statements under Sections 73/74/74A arising from audits will be made answerable to jurisdictional officers.

Practical Impact

This circular provides much-needed clarity in officer jurisdiction for new proceedings under Section 74A (from FY 2024–25), and standardizes officer powers for penalty and reassessment cases under Sections 75(2) and 122.

It will help:

• Ensure uniformity in adjudication across Commissionerates,
• Avoid jurisdictional disputes, and
• Promote efficiency and accountability in GST enforcement.

Conclusion

CBIC’s Circular No. 254/11/2025-GST marks an important administrative update for both taxpayers and officers under GST. With clear monetary thresholds and officer assignments, it ensures smoother functioning of GST adjudication and fair enforcement under Sections 74A, 75(2), and 122.