Analysis of proposed Amendment of section 129 as per finance bill 2021

Finance Bill 2021 has proposed various changes/amendments in Section 129 of the Central Goods and Services Tax Act. In this article we shall to analysis that  whether these changes/amendments are beneficial as regard goods which are perishable or hazardous in nature or are likely to depreciate in value with passage of time.

Current provision of section 129(6) of CGST Act 2017

Where the person transporting any goods or the owner of the goods fails to pay the amount of tax and penalty as provided in sub-section (1) within fourteen days of such detention or seizure, further proceedings shall be initiated in accordance with the provisions of section 130:

Provided that where the detained or seized goods are perishable or hazardous in nature or are likely to depreciate in value with passage of time, the said period of fourteen days may be reduced by the proper officer.

For Example if Goods were detained or seized on 01.01.2020 and person transporting any goods or the owner of the goods fails to pay the amount of tax and penalty as provided in sub-section (1) up to 14. 01.2020, then further proceedings shall be initiated in accordance with the provisions of section 130:

As per proviso with sub section (6) this period of fourteen days (01.01.2020 to 14.01.2020) may be reduced by proper officer, if  detained or seized goods are perishable or hazardous in nature or are likely to depreciate in value with passage of time.

New Proposal-  Proposed Amendment of section 129 of CGST Act, 2017

Clause 108 of Finance Bill  2021

Section 129(6). New Proposal:-

Where the person transporting any goods or the owner of such goods fails to pay the amount of penalty under sub-section (1) within fifteen days from the date of receipt of the copy of the order passed under sub-section (3), the goods or conveyance so detained or seized shall be liable to be sold or disposed of otherwise, in such manner and within such time as may be prescribed, to recover the penalty payable under sub-section (3):

Provided that the conveyance shall be released on payment by the transporter of penalty under sub-section (3) or one lakh rupees, whichever is less:

Provided further that where the detained or seized goods are perishable or hazardous in nature or are likely to depreciate in value with passage of time, the said period of fifteen days may be reduced by the proper officer.”.

Section 129(3). New Proposal:-

Section 129 (3) The proper officer detaining or seizing goods or conveyance shall issue a notice within seven days of such detention or seizure, specifying the penalty payable, and thereafter, pass an order within a period of seven days from the date of service of such notice, for payment of penalty under clause (a) or clause (b) of sub-section (1).”;

For Example if Goods detained or seized on 01.10.2021, then proper officer  shall issue a notice within seven days ( 07.10.2021)  and thereafter, pass an order within a period of seven days (14.10.2021)  from the date of service of such notice (07.10.2021).

Now new subsection (6) says that  where the person transporting any goods or the owner of such goods fails to pay the amount of penalty under sub-section (1) within fifteen days from the date of receipt of the copy of the order passed under sub-section (3), (14.10.2021 to 28.10.2021) the goods or conveyance so detained or seized shall be liable to be sold or disposed of otherwise

Proviso says that this period of fifteen days (14.10.2021 to 28.10.2021) may be reduced by proper officer, if detained or seized goods are perishable or hazardous in nature or are likely to depreciate in value with passage of time.

It means proper officers shall not release detained or seized goods which are perishable or hazardous in nature or are likely to depreciate in value with passage of time before expiry of fourteen days (7 days + 7 days) in any case. He may release goods after fourteen day only.

One can easily conclude that this is not a beneficial proposal as regard goods which are perishable or hazardous in nature or are likely to depreciate in value with passage of time.

In  my opinion a suitable amendment is  require in this proposal.

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