Section 129 of GST Act, 2017 provides for detention or seizure of goods in transit in contravention of the provisions of the Act. Following are important points to be noted in this regard:

1) Section 129(4) provides that no tax, interest or penalty shall be levied without giving the person concerned an opportunity of being heard.

2) As per Para 2(j) of Circular No. 41/15/2018- GST Dated: 13.04.2018 where any objections are filed against the proposed amount of tax and penalty, the proper officer shall consider such objections and thereafter pass a speaking order.

3) Circular No.- 64/38/2018-GST; Dated 14-09-2018 prescribes penalty to the tune of Rs 500 each under Section 125 in case of minor discrepancies in the generation of E Way Bill. Circular also provides an illustrative list of minor discrepancies:

a. Spelling mistake in the name of the consignor or the consignee but the GSTIN is correct.

b. Error in PIN code but the address of the consignor and the consignee mentioned is correct subject to the condition that error in the PIN code should not have the effect of increasing the validity period of eway bill.

c. Error in the address of the consignee to the extent that the locality and other details of the consignee are correct.

d. Error in one or two digits of the document number mentioned in the E way Bill.

e. Error in 4 or 6 Digits of HSN where the first two digits of HSN are correct and rate of tax mentioned is correct.

f. Error in one or two digits/ characters of the vehicle number

4) Above situations mentioned in the circular are not exhaustive rather only indicative.

Following suggested steps should be followed when goods are detained by the department:

I Identify the discrepancy in documents due to which goods are detained by the officer.

II Ascertain if the discrepancy falls under minor discrepancy as per Circular No.- 64/38/2018-GST. If yes inform the proper officer in writing and request for release of goods levying a penalty of Rs 1000/- under Section 125.

III Submit to the proper office in writing reason for the discrepancy and why the penalty should not be levied under Section 129. Obtain acknowledgement of submission.

IV Proper officer shall pass a speaking order considering the objections submitted. In case proper officer does not give a speaking order or you are aggrieved by the order, file an appeal to the first appellate authority within 3 months of communication of order. The order is liable to be quashed by the Appellate Authority if speaking order is not passed by the proper officer.

(Author can be reached at [email protected]; +91 99172 11511)

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Qualification: CA in Practice
Company: N H Singhal & Associates
Location: Uttarakhand, IN
Member Since: 05 Mar 2018 | Total Posts: 21
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June 2021