Section 166 of the Central Goods and Services Tax Act, 2017 deals with the procedure for laying rules, regulations and notifications before Parliament. It is a procedural and legislative oversight provision that operates after the Government or the Board exercises the delegated powers granted under the CGST Act.
The provision requires every rule made by the Government, every regulation made by the Board and every notification issued by the Government under the CGST Act to be laid before each House of Parliament, subject to the procedure prescribed in Section 166.
The section also explains what happens if both Houses of Parliament agree to modify a rule, regulation or notification, or agree that it should not have been made. At the same time, Section 166 protects the validity of things already done under that rule, regulation or notification before the modification or annulment.
What Is Section 166 of the CGST Act?
Section 166 is titled “Laying of rules, regulations and notifications.”
It is contained in Chapter XXI – Miscellaneous of the CGST Act.
The provision deals with three types of delegated legislation:
- Rules made by the Government;
- Regulations made by the Board; and
- Notifications issued by the Government under the CGST Act.
Section 166 requires these instruments to be laid before each House of Parliament while Parliament is in session, for a total period of thirty days. The thirty-day period may be completed in one session or in two or more successive sessions.
Why Is Section 166 Important?
The CGST Act contains the main statutory framework for GST. However, the Act itself cannot contain every procedural detail required for day-to-day administration.
The Act therefore gives rule-making and notification powers to the Government and regulatory powers to the Board.
For example, Section 164 allows the Government to make rules for carrying out the provisions of the CGST Act, while Section 165 allows the Board to make regulations consistent with the Act and the rules.
Section 166 provides a parliamentary oversight mechanism for these delegated instruments.
The sequence can broadly be understood as:
CGST Act → Rule-making/notification power → Rules, regulations or notifications → Laying before Parliament
Sections 164 and 165 provide the relevant delegated powers, while Section 166 deals with the subsequent laying procedure.
What Does “Laying Before Parliament” Mean?
“Laying before Parliament” means formally placing the relevant rule, regulation or notification before both Houses of Parliament so that Parliament has an opportunity to consider it in accordance with the procedure specified in Section 166.
The provision does not require the Government or Board to obtain fresh approval from Parliament before every such rule, regulation or notification can be made.
Instead, Section 166 establishes a post-making parliamentary oversight mechanism.
This distinction is important.
The rule, regulation or notification is first made or issued under the authority provided by the CGST Act and is then laid before Parliament as required by Section 166.
What Documents Are Covered by Section 166?
Section 166 specifically covers three categories.
1. Rules Made by the Government
Rules made by the Government under the CGST Act are covered.
Section 164 is the principal rule-making provision. It authorises the Government, on the recommendations of the GST Council, to make rules for carrying out the provisions of the Act.
Once such rules are made, Section 166 requires them to be laid before each House of Parliament.
2. Regulations Made by the Board
Section 166 also covers regulations made by the Board.
Section 165 provides that the Board may, by notification, make regulations consistent with the CGST Act and the rules made under it to carry out the provisions of the Act.
Such regulations are also required to be laid before each House of Parliament under Section 166.
3. Notifications Issued by the Government
Notifications issued by the Government under the CGST Act are also covered.
GST administration relies extensively on notifications for matters where the Act specifically authorises the Government to prescribe, exempt, specify or otherwise notify particular matters.
Where such a notification falls within the scope of Section 166, it must be laid before each House of Parliament according to the procedure prescribed in the section.
Thirty-Day Period Under Section 166
One of the most important features of Section 166 is the thirty-day period.
The rule, regulation or notification must be laid before each House of Parliament for a total period of thirty days.
The thirty days:
- need not necessarily be in one continuous session;
- may be comprised in one session; or
- may be comprised in two or more successive sessions.
Therefore, the section specifically accommodates situations where Parliament’s sessions do not provide thirty sitting days in one continuous session.
What Happens If Parliament Modifies a Rule?
Section 166 provides a specific mechanism if both Houses of Parliament agree to make a modification in a rule, regulation or notification.
If both Houses agree on a modification before the expiry of the session immediately following the session or successive sessions in which the instrument was laid, the relevant rule, regulation or notification thereafter has effect only in the modified form.
This gives Parliament a statutory role in reviewing delegated legislation made under the CGST Act.
Simple Example
Suppose the Government makes a rule under the CGST Act.
The rule is laid before both Houses of Parliament.
During the prescribed parliamentary review period, both Houses agree that a particular provision should be modified.
Once the statutory conditions under Section 166 are satisfied, the rule thereafter operates in the modified form.
What Happens If Parliament Agrees That the Rule Should Not Have Been Made?
Section 166 also deals with the situation where both Houses agree that the rule, regulation or notification should not have been made.
In that situation, the rule, regulation or notification becomes of no effect after the prescribed parliamentary process is completed.
Therefore, Section 166 provides two possible parliamentary outcomes:
- Modification of the rule, regulation or notification; or
- Agreement that it should not have been made.
What Does “Both Houses Agree” Mean?
The language of Section 166 specifically refers to both Houses of Parliament.
Therefore, the statutory consequence of modification or annulment arises where both Houses agree in the manner contemplated by the provision.
The provision does not state that a decision of only one House automatically modifies or invalidates the instrument.
This is an important feature of the statutory mechanism.
Protection for Things Already Done
Section 166 contains an important saving provision.
Even where a rule, regulation or notification is subsequently modified or annulled through the parliamentary process, the modification or annulment is without prejudice to the validity of anything previously done under that rule, regulation or notification.
This prevents uncertainty concerning actions that were validly taken while the original rule, regulation or notification was in force.
Example
Suppose a notification is issued under the CGST Act and taxpayers comply with it during the period before Parliament modifies the notification.
If Parliament subsequently agrees to modify the notification, the earlier actions taken under the original notification do not automatically become invalid merely because of the later modification.
The saving clause protects the validity of things previously done.
Why Does Section 166 Contain a Saving Clause?
The saving clause provides legal certainty.
Government and taxpayers may take numerous actions based on a rule, regulation or notification.
For example:
- taxpayers may file returns;
- tax may be paid;
- refunds may be processed;
- registrations may be granted;
- applications may be decided; or
- compliance actions may be completed.
If every later parliamentary modification automatically invalidated everything previously done, significant uncertainty could arise.
Section 166 therefore expressly protects the validity of things previously done under the relevant instrument.
Section 166 and Delegated Legislation
Section 166 is an example of legislative oversight over delegated legislation.
The CGST Act delegates certain law-making or regulatory functions to the executive authorities.
For example:
- Section 164 gives rule-making power to the Government.
- Section 165 gives regulation-making power to the Board.
- Various provisions of the Act empower the Government to issue notifications.
Section 166 provides for those instruments to be laid before Parliament.
This creates a relationship between delegated legislative power and parliamentary oversight.
Section 164 vs Section 166
Sections 164 and 166 are closely connected but deal with different matters.
| Section | Subject |
|---|---|
| Section 164 | Power of Government to make rules |
| Section 166 | Laying of rules, regulations and notifications before Parliament |
Section 164 gives the Government the authority to make rules.
Section 166 deals with what happens after rules are made, including their placement before Parliament and the consequences of parliamentary modification or annulment.
Section 165 vs Section 166
Similarly, Sections 165 and 166 should not be confused.
Section 165
Section 165 gives the Board power to make regulations consistent with the Act and rules.
Section 166
Section 166 requires regulations made by the Board under the Act to be laid before each House of Parliament.
Therefore:
Section 165 = Power to make regulations
Section 166 = Parliamentary laying procedure
Section 166 and GST Notifications
Notifications are an important part of GST administration.
The CGST framework contains numerous provisions under which the Government may issue notifications for specified purposes.
Depending on the enabling provision and statutory framework, notifications can deal with matters such as:
- exemptions;
- effective dates;
- prescribed classes of persons;
- rates or specified conditions;
- procedural requirements; and
- other matters authorised by the Act.
Section 166 provides the parliamentary laying mechanism for notifications issued by the Government under the CGST Act.
👉 Read More → Section 168 – Power to issue instructions or directions
Does Section 166 Mean Parliament Approves Every GST Notification Before It Operates?
No.
Section 166 establishes a laying procedure. It does not state that every covered rule, regulation or notification must receive prior approval from both Houses before it can be made or issued.
The statutory language requires the instrument to be laid before Parliament as soon as may be after it is made or issued, while Parliament is in session.
This is therefore a post-issuance parliamentary oversight mechanism rather than a requirement of prior parliamentary approval.
“As Soon as May Be” Under Section 166
The section provides that the relevant rule, regulation or notification shall be laid “as soon as may be after it is made or issued” before each House of Parliament while it is in session.
The wording recognises that the actual laying process depends on the parliamentary calendar and whether Parliament is in session.
It does not prescribe a fixed number of days from the date of issuance for laying the instrument.
What Happens During Parliamentary Review?
The instrument is laid before both Houses for the total period prescribed by Section 166.
During the relevant parliamentary process, both Houses may agree:
- to modify the instrument; or
- that the instrument should not have been made.
If neither of those statutory outcomes occurs within the specified period, the rule, regulation or notification continues according to its legal terms.
The section is therefore designed to provide parliamentary oversight without requiring every instrument to undergo a separate prior approval procedure.
Practical Example – Government Rule
Suppose the Government makes a new rule under Section 164 to prescribe a particular GST procedure.
The rule is issued in accordance with the Act.
Under Section 166:
- The rule is laid before each House of Parliament.
- It remains before Parliament for the total period of thirty days specified in the section.
- The thirty days can fall in one session or two or more successive sessions.
- If both Houses agree to modify it within the specified period, it operates thereafter in the modified form.
- If both Houses agree that it should not have been made, it becomes of no effect.
- Previously valid actions remain protected by the saving clause.
Practical Example – Board Regulation
Suppose the Board makes a regulation under Section 165.
The regulation must be consistent with the CGST Act and the rules made under it.
After it is made, Section 166 requires the regulation to be laid before each House of Parliament.
If both Houses subsequently agree to modify the regulation, the regulation thereafter operates in the modified form in accordance with Section 166.
Practical Example – Government Notification
Suppose the Government issues a notification under an enabling provision of the CGST Act.
The notification is then required to be laid before each House of Parliament under Section 166.
If both Houses agree that a particular provision should be modified, the notification thereafter has effect in the modified form.
The saving clause protects the validity of things previously done under the original notification.
Section 166 and Taxpayer Compliance
For taxpayers, Section 166 is primarily an institutional and legislative oversight provision.
Taxpayers generally need to focus on the operative version of the applicable:
- CGST Act provisions;
- rules;
- regulations;
- notifications;
- circulars and instructions, where relevant; and
- other applicable GST legal instruments.
If a rule or notification is subsequently modified under the Section 166 mechanism, taxpayers need to follow the legally operative version from the applicable point in time.
Section 166 Does Not Create a Tax Rate
Section 166 itself does not prescribe:
- a GST rate;
- an exemption;
- an input tax credit entitlement;
- a return form;
- a registration threshold; or
- a payment deadline.
Instead, it establishes a legislative procedure concerning rules, regulations and notifications made under the CGST Act.
The substantive tax treatment comes from the Act and the relevant valid subordinate legislation.
Section 166 and Parliamentary Control
The broader significance of Section 166 is that delegated powers under GST are not completely detached from parliamentary oversight.
The Government and Board can exercise powers delegated by Parliament through the CGST Act, but Section 166 provides a mechanism through which covered delegated instruments are formally placed before Parliament.
This is a common legislative technique for maintaining oversight over delegated legislation.
Section 166 and Legal Certainty
Section 166 also contributes to legal certainty in two ways.
First, it provides a defined parliamentary procedure for reviewing delegated instruments.
Second, its saving clause protects the validity of things already done under a rule, regulation or notification even if Parliament later modifies or annuls it.
This is particularly relevant in a tax system where businesses and government authorities may take numerous actions based on subordinate legislation.
Difference Between Section 166 and Section 168
Section 166 and Section 168 serve completely different purposes.
Section 166
Deals with laying rules, regulations and notifications before Parliament.
Section 168
Deals with the Board’s power to issue instructions or directions to officers for the purpose of uniform implementation of the CGST Act.
Therefore:
Section 166 = Parliamentary laying procedure
Section 168 = Administrative instructions and directions
Difference Between Section 166 and Section 172
Section 172 deals with the removal of difficulties.
It allows the Government, subject to the conditions in that section, to issue orders to remove difficulties arising in giving effect to the provisions of the CGST Act.
Section 166, by contrast, concerns the laying of specified rules, regulations and notifications before Parliament.
The two provisions therefore serve different legislative functions.
Important Points to Remember About Section 166
The major points of Section 166 are:
- Section 166 deals with laying rules, regulations and notifications before Parliament.
- It is contained in Chapter XXI of the CGST Act.
- Every rule made by the Government under the Act is covered.
- Every regulation made by the Board under the Act is covered.
- Every notification issued by the Government under the Act is covered.
- The relevant instrument must be laid before each House of Parliament.
- It must be laid as soon as may be after it is made or issued.
- Parliament must be in session when the instrument is laid.
- The total prescribed period is thirty days.
- The thirty days may be comprised in one session.
- The thirty days may also be comprised in two or more successive sessions.
- Both Houses can agree to modify the rule, regulation or notification.
- If both Houses agree to a modification, the instrument thereafter has effect in the modified form.
- Both Houses can also agree that the instrument should not have been made.
- In that situation, the instrument becomes of no effect as provided by the section.
- Any modification or annulment does not affect the validity of anything previously done under the instrument.
- Section 164 gives the Government the power to make rules.
- Section 165 gives the Board the power to make regulations.
- Section 166 provides the parliamentary laying mechanism for these instruments and covered Government notifications.
- Section 166 is therefore an important provision concerning parliamentary oversight of delegated GST legislation.
👉 Read More → Section 166 – Laying of rules, regulations and notifications
Conclusion
Section 166 of the CGST Act provides the statutory mechanism for laying rules, regulations and notifications before Parliament.
The provision covers every rule made by the Government, every regulation made by the Board and every notification issued by the Government under the CGST Act. These instruments are required to be laid before each House of Parliament as soon as may be after they are made or issued, while Parliament is in session, for a total period of thirty days. The thirty-day period may be completed in one session or across two or more successive sessions.
Section 166 also provides a mechanism for parliamentary modification or annulment. If both Houses agree to modify a rule, regulation or notification within the period specified by the section, it thereafter operates in the modified form. If both Houses agree that it should not have been made, it becomes of no effect as provided by the section.
An important safeguard is that any such modification or annulment is without prejudice to the validity of anything previously done under the relevant rule, regulation or notification. This protects actions already taken while the original instrument was operative and provides greater certainty to taxpayers and tax authorities.
Section 166 should be read along with Sections 164 and 165. Section 164 provides the Government’s rule-making power, Section 165 provides the Board’s regulation-making power, and Section 166 provides the parliamentary laying procedure for these delegated instruments.
In practical terms, Section 166 is less about calculating GST or determining a taxpayer’s individual liability and more about the legislative oversight and procedural framework governing delegated GST legislation.
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