Section 165 of the Central Goods and Services Tax Act, 2017 deals with the power of the Board to make regulations for carrying out the provisions of the CGST Act.
The section provides a specific regulation-making power to the Board. It allows the Board to make regulations by notification, but those regulations must remain consistent with the CGST Act and the rules made under the Act.
Section 165 is therefore an important part of the delegated legislative framework under GST. While the Act contains the main statutory provisions and Section 164 gives the Government the power to make rules, Section 165 gives the Board a separate power to make regulations for carrying out the provisions of the Act. The official CBIC text places Section 165 between Section 164, which deals with the Government’s power to make rules, and Section 166, which deals with laying rules, regulations and notifications before Parliament.
What Is Section 165 of the CGST Act?
Section 165 is titled “Power to make regulations.”
The section provides:
“The Board may, by notification, make regulations consistent with this Act and the rules made thereunder to carry out the provisions of this Act.”
This is a short but important provision. Unlike some sections of the CGST Act that contain several sub-sections and detailed procedures, Section 165 contains a single statutory provision establishing the Board’s regulation-making authority.
In simple terms:
CGST Act → Main law
Section 164 → Government’s power to make rules
Section 165 → Board’s power to make regulations
Section 166 → Laying of rules, regulations and notifications before Parliament
Understanding this distinction helps in understanding how GST legislation is implemented in practice.
Who Has the Power Under Section 165?
The power under Section 165 is given to the Board.
In the CGST framework, the Board refers to the Central Board of Indirect Taxes and Customs (CBIC).
The Board exercises the power through a notification.
Therefore, Section 165 does not give every GST officer or every department an independent power to make regulations.
The statutory power is specifically vested in the Board.
What Can the Board Do Under Section 165?
The Board may make regulations:
- by notification;
- for carrying out the provisions of the CGST Act; and
- subject to consistency with the CGST Act and the rules made under it.
The regulation-making power is therefore not unlimited.
There are clear statutory conditions attached to it.
Regulations Must Be Consistent With the CGST Act
One of the most important words in Section 165 is “consistent.”
The regulations made by the Board must be consistent with:
- the CGST Act; and
- the rules made under the CGST Act.
This means a regulation cannot simply contradict or override the parent Act.
The CGST Act remains the primary legislation, while regulations made under Section 165 operate within the authority granted by that Act.
Simple Example
Suppose the CGST Act provides a particular statutory right to a registered person.
A regulation made under Section 165 cannot simply remove that statutory right if there is no authority in the Act to do so.
Similarly, a regulation cannot introduce a requirement that is fundamentally inconsistent with the Act or the rules.
The regulation must operate within the statutory framework.
Regulations Must Also Be Consistent With the Rules
Section 165 does not only require consistency with the Act.
It specifically requires regulations to be consistent with the rules made under the Act as well.
This creates a hierarchy within the delegated GST framework.
A simplified structure can be understood as:
CGST Act
↓
CGST Rules
↓
Regulations made by the Board under Section 165
This does not mean that every regulatory matter will necessarily involve a separate rule and regulation. Rather, Section 165 establishes that regulations made by the Board must remain within the framework of both the Act and the rules.
Why Is the Power to Make Regulations Necessary?
GST is a large and technically detailed tax system.
The CGST Act contains the main legal framework, but its administration often requires detailed operational arrangements.
A regulation-making power allows the Board to provide necessary implementation details within the limits of the parent legislation.
This can be particularly relevant for matters involving:
- administration;
- procedural requirements;
- forms or formats where authorised;
- implementation mechanisms;
- operational processes; and
- other matters necessary to carry out the CGST Act.
The precise scope of any regulation depends on the authority granted by the Act and the wording of the regulation itself.
Section 165 Is Different From Section 164
Section 164 and Section 165 are located next to each other, but they provide different powers.
Section 164 – Power of Government to Make Rules
Section 164 provides that the Government may, on the recommendations of the GST Council and by notification, make rules for carrying out the provisions of the CGST Act.
It also specifically permits rules on matters that the Act requires or permits to be prescribed or dealt with by rules.
Section 164 further contains a provision concerning retrospective effect of rules, subject to the statutory limitation, and allows rules to provide for a penalty of up to ₹10,000 for contravention of such rules.
Section 165 – Power to Make Regulations
Section 165, on the other hand, gives the Board the power to make regulations by notification.
The regulations must be consistent with the Act and the rules and must be made to carry out the provisions of the Act.
Simple Difference
| Provision | Authority | Instrument |
|---|---|---|
| Section 164 | Government | Rules |
| Section 165 | Board | Regulations |
| Section 166 | Parliament oversight mechanism | Laying of rules, regulations and notifications |
This distinction is important when reading GST legislation.
Section 165 and Section 166
Section 166 follows Section 165 and deals with the laying of rules, regulations and notifications before Parliament.
It provides that every rule made by the Government, every regulation made by the Board and every notification issued by the Government under the CGST Act shall be laid before each House of Parliament while it is in session for the statutory period.
The provision also sets out what happens if both Houses agree to modify a rule or regulation or decide that it should not have effect.
Therefore, Section 165 should not be read in isolation from Section 166.
A simplified sequence is:
Section 164 → Rules
Section 165 → Regulations
Section 166 → Parliamentary laying mechanism
“By Notification” Under Section 165
Section 165 specifically states that the Board may make regulations “by notification.”
This means that the regulation-making power is exercised through the statutory notification mechanism rather than through an informal administrative communication.
The form and publication of the relevant notification are therefore important when determining whether a regulation has actually been made under Section 165.
Taxpayers should distinguish such regulations from:
- circulars;
- instructions;
- orders;
- advisories; and
- other administrative communications.
Different legal instruments can have different statutory foundations and effects.
Section 165 and the Power of the Board
The Board has several powers under the CGST Act.
Section 165 is specifically concerned with the Board’s power to make regulations.
This should not be confused with other provisions giving the Board powers to:
- issue instructions or directions;
- prescribe or approve certain procedures;
- administer GST;
- appoint or authorise officers; or
- exercise other statutory functions.
Each such power must be traced to its specific statutory provision.
Section 165 itself is focused on regulations.
Can a Regulation Override the CGST Act?
No.
Section 165 expressly requires regulations to be consistent with the CGST Act.
The parent Act therefore places a substantive limit on the Board’s regulation-making power.
A regulation cannot lawfully be used as a mechanism to rewrite the Act or contradict a statutory provision.
If a regulation is alleged to go beyond the authority granted by the parent legislation, its validity can become a matter of legal examination under the applicable principles of delegated legislation.
Can a Regulation Override the CGST Rules?
Section 165 also requires consistency with the rules made under the Act.
Therefore, the Board’s regulations must operate within the statutory framework created by the Act and the rules.
A regulation cannot simply disregard an applicable rule where the regulation-making power does not authorise such a departure.
Section 165 and Delegated Legislation
Section 165 is an example of delegated legislation.
The Parliament enacts the CGST Act and establishes the overall legal framework.
The Act then delegates certain powers to specified authorities to make rules, regulations or other subordinate instruments needed to implement the law.
Under Section 165, the Board receives a limited statutory power to make regulations.
The Board does not receive unrestricted legislative authority. Its regulations must remain within the boundaries established by the CGST Act and the rules.
Why Is Consistency Important?
The requirement of consistency protects the statutory hierarchy.
For example, if the Act establishes a particular legal framework for a GST matter, the Board’s regulation-making power cannot be treated as an independent source of authority to create provisions that contradict that framework.
The regulation must instead help implement the law.
This is the basic purpose of the words:
“consistent with this Act and the rules made thereunder.”
Example – Administrative Procedure
Suppose the CGST Act and rules establish a statutory GST procedure and the Board is authorised to provide further operational details.
The Board may use the regulation-making power under Section 165 where the subject falls within the scope of the statutory authority.
The resulting regulation would need to operate consistently with the Act and rules.
The Board could not use Section 165 simply to create a completely different statutory regime.
Example – Record or Procedural Requirement
Suppose the GST law requires a particular category of information to be maintained or produced and the applicable legal framework permits further implementation details.
A regulation may provide an operational mechanism for implementing that requirement where authorised.
However, the regulation must remain consistent with the parent legislation and applicable rules.
Section 165 Does Not Create an Independent Tax Levy
An important practical point is that Section 165 itself does not impose a new GST levy.
The section is a delegation provision.
The power is to make regulations for carrying out the provisions of the CGST Act.
The charging provisions of GST are found elsewhere in the Act, particularly the provisions dealing with the levy and collection of tax.
Therefore, Section 165 should not be understood as a standalone charging provision.
Section 165 and Taxpayer Compliance
Taxpayers may encounter regulations while dealing with GST compliance.
Where a regulation has been validly made under Section 165 and applies to a particular matter, businesses may need to take it into account along with:
- the CGST Act;
- CGST Rules;
- relevant notifications;
- applicable circulars or instructions; and
- other legally relevant provisions.
Businesses should identify the statutory basis of a requirement instead of assuming that every GST communication has the same legal status.
Difference Between Regulations, Rules and Circulars
These terms are often used together in GST discussions, but they are not identical.
| Instrument | Main authority | General purpose |
|---|---|---|
| CGST Act | Parliament | Primary legislation |
| Rules | Government under Section 164 | Carry out the Act and prescribe matters authorised by it |
| Regulations | Board under Section 165 | Carry out the Act within the statutory framework |
| Circulars/Instructions | Board under specific statutory powers | Administrative guidance or directions within the relevant statutory authority |
| Notifications | Government/Board depending on statutory provision | Give effect to powers specifically conferred by the Act |
The exact legal effect of a particular instrument depends on the provision under which it was issued.
Section 165 and Section 168
Section 168 of the CGST Act deals with the Board’s power to issue instructions or directions to central tax officers for the purpose of uniform implementation of the Act.
Section 165 is different because it concerns the Board’s power to make regulations.
Thus:
Section 165 → Regulations
Section 168 → Instructions or directions
A circular or instruction issued under a different statutory power should not automatically be described as a regulation under Section 165.
Section 165 and Judicial Review
Regulations made under delegated statutory authority are subordinate legislation.
If a taxpayer or another affected person challenges a regulation, the validity of the regulation can be examined according to applicable principles governing delegated legislation.
Questions may include whether:
- the authority had statutory power to make the regulation;
- the regulation falls within the scope of that power;
- the regulation is consistent with the parent Act;
- the regulation is consistent with the applicable rules; and
- the required statutory procedure was followed.
Section 165 itself establishes the source of the Board’s regulation-making power, while the validity of a particular regulation depends on its statutory authority and content.
Section 165 and Section 166 – Parliamentary Oversight
Section 166 provides a parliamentary laying mechanism for regulations made by the Board.
Every regulation made by the Board under the CGST Act is to be laid before each House of Parliament while it is in session for a total period of thirty days, which may be comprised in one session or in two or more successive sessions.
If both Houses agree to modify the regulation or agree that it should not be made, the provision sets out the consequences for its future operation. It also preserves the validity of things previously done under the regulation before the modification or annulment.
This demonstrates that Section 165 and Section 166 work together within the statutory framework.
Importance of Section 165 for GST Administration
GST involves a nationwide tax framework covering millions of taxpayers and numerous categories of transactions.
The primary legislation cannot practically contain every operational detail.
The regulation-making power therefore forms part of the mechanism through which the statutory framework can be implemented.
At the same time, Section 165 places boundaries around that power by requiring regulations to remain consistent with the Act and the rules.
This balances administrative implementation with the statutory framework established by Parliament.
Practical Compliance Approach for Businesses
Businesses should follow a structured approach when they encounter a GST requirement described as a regulation.
1. Identify the Legal Instrument
Check whether the requirement comes from:
- the CGST Act;
- CGST Rules;
- a regulation;
- a notification;
- a circular;
- an instruction; or
- another statutory instrument.
2. Check the Statutory Authority
If a document is described as a regulation, identify the statutory provision under which it was issued.
For regulations, Section 165 is the relevant enabling provision.
3. Check the Date
Check when the regulation was notified and whether it has subsequently been amended, replaced or superseded.
4. Read the Parent Provision
Do not read a regulation independently from the CGST Act and applicable rules.
Section 165 itself requires consistency with both.
5. Check Applicability
Determine whether the regulation applies to the taxpayer, transaction, period or category involved.
6. Maintain Records
Keep copies of relevant regulations and amendments forming part of the compliance framework.
Common Misunderstandings About Section 165
Misunderstanding 1: Section 165 Gives Unlimited Power to CBIC
It does not.
The power is limited by the requirement that regulations must be consistent with the CGST Act and rules and must be made to carry out the provisions of the Act.
Misunderstanding 2: Regulations Can Override the Act
They cannot be treated as having an overriding power against the parent Act.
The regulation-making power exists because the Act confers it.
Misunderstanding 3: Every CBIC Circular Is a Regulation
No.
A circular, instruction and regulation are different legal instruments and may have different statutory bases.
Misunderstanding 4: Section 165 Is a Tax Levy Provision
No.
Section 165 provides a regulation-making power. It does not itself levy GST.
Misunderstanding 5: Rules and Regulations Are the Same
No.
Section 164 deals with the Government’s power to make rules, while Section 165 deals with the Board’s power to make regulations.
Section 165 in Relation to Nearby Sections
| Section | Subject |
|---|---|
| Section 161 | Rectification of errors apparent on the face of record |
| Section 162 | Bar on jurisdiction of civil courts |
| Section 163 | Levy of fee |
| Section 164 | Power of Government to make rules |
| Section 165 | Power to make regulations |
| Section 166 | Laying of rules, regulations and notifications |
| Section 167 | Delegation of powers |
| Section 168 | Power to issue instructions or directions |
| Section 169 | Service of notice in certain circumstances |
| Section 170 | Rounding off of tax, etc. |
This sequence is useful because Sections 164 to 168 together establish several important administrative and delegated powers under the CGST Act.
Section 165 vs Section 164
| Basis | Section 164 | Section 165 |
|---|---|---|
| Subject | Power to make rules | Power to make regulations |
| Authority | Government | Board |
| Method | Notification | Notification |
| Main requirement | Rules to carry out the Act and deal with matters authorised by it | Regulations must be consistent with Act and rules |
| Recommendation of GST Council | Expressly mentioned | Not stated in Section 165 |
| Penalty for contravention | Rules may provide penalty up to ₹10,000 under Section 164(4) | Section 165 itself contains no equivalent penalty provision |
The distinction is important when determining the legal basis of a particular subordinate instrument.
Key Takeaways of Section 165
Section 165 can be understood through the following points:
- Section 165 deals with the power to make regulations under the CGST Act.
- The power is given to the Board.
- The Board may exercise the power by issuing a notification.
- Regulations must be consistent with the CGST Act.
- Regulations must also be consistent with the rules made under the CGST Act.
- Regulations are made to carry out the provisions of the CGST Act.
- Section 165 is an example of delegated legislative authority.
- Section 165 does not give the Board unlimited legislative power.
- A regulation cannot be treated as overriding the CGST Act.
- Section 164 deals with the Government’s power to make rules.
- Section 165 deals with the Board’s power to make regulations.
- Section 166 provides for laying rules, regulations and notifications before Parliament.
- Section 168 separately deals with the Board’s power to issue instructions or directions.
- Section 165 itself does not impose a GST levy.
- Section 165 should be read together with Sections 164 and 166 to understand the GST delegated legislation framework.
Conclusion
Section 165 of the CGST Act provides the Board with the statutory power to make regulations for carrying out the provisions of the Act.
The provision is concise, but it establishes an important part of the GST legislative framework. The Board may make regulations by notification, but those regulations must remain consistent with the CGST Act and the rules made under it.
Section 165 should be distinguished from Section 164. Section 164 gives the Government the power to make rules, while Section 165 gives the Board the power to make regulations. Section 166 then provides the mechanism for laying rules, regulations and notifications before Parliament.
For taxpayers, the practical importance of Section 165 is that a GST compliance requirement may arise not only from the text of the CGST Act but also from valid subordinate legislation made under statutory authority. Businesses should therefore identify the legal source of a requirement and check the applicable Act, rules, regulations and notifications together.
At the same time, Section 165 places an important limitation on the Board: regulations must be consistent with the parent Act and the rules. The provision therefore enables detailed implementation of GST while keeping the regulation-making power within the framework established by Parliament.
Based on Google's Helpful Content System, this article emphasizes user value, transparency, and accuracy. It incorporates principles of E-E-A-T (Experience, Expertise, Authoritativeness, Trustworthiness).
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