Simplified GST Series –Section 68/ Inspection of Goods in Movement/CGST ACT 2017

Section 68- Inspection of goods in movement

(1) The Government may require the person in charge of a conveyance carrying any consignment of goods of value exceeding such amount as may be specified to carry with him such documents and such devices as may be prescribed.

(2) The details of documents required to be carried under sub-section (1) shall be validated in such manner as may be prescribed.

(3) Where any conveyance referred to in sub-section (1) is intercepted by the proper officer at any place, he may require the person in charge of the said conveyance to produce the documents prescribed under the said sub-section and devices for verification, and the said person shall be liable to produce the documents and devices and also allow the inspection of goods.

Analysis- Section 68 of CGST Act stipulates that the person in charge of a conveyance carrying any consignment of goods of value exceeding a specified amount shall carry with him prescribed documents and devices (invoice or bill of supply or delivery challan, as the case may be) which shall be validated in the prescribed manner. If such conveyance is intercepted by the proper officer at any place, the person in charge of the conveyance shall be liable to produce the documents for verification and also allow the inspection of goods.

Rules 138 to 138E of the CGST Rules lay down, in detail, the provisions relating to e-way bills. As per the said provisions, in case of transportation of goods by road, an e-way bill is required to be generated before the commencement of movement of the consignment. When there is any document-deficiency, then consequences laid out in section 129 will immediately follow which provides for detention, seizure and release of goods and conveyances in transit. Section 130 provides for the confiscation of goods or conveyances and imposition of penalty.

Procedural and Practical Aspects of E-Way Bill under GST:

  • Applicability – E-way Bill (“EWB”) is not required for all transactions undertaken by a taxable person.
  • It is required only for those transactions which involve movement of goods. Every registered person (supplier or recipient) who causes movement of goods of consignment value exceeding fifty thousand rupees (States may have different limits for intra-state movement) is required to generate e-way bill electronically before commencement of such movement.
  • Such movement of goods may be:
    • In relation to supply
    • for reasons other than supply
    • due to inward supply from an unregistered person

Furnishing of information in EWB:

  • E-way bill (EWB) shall be in two parts- Part A and Part B.
  • Information relating to the said goods is required to be furnished in Part A of FORM GST EWB-01 along with such other information as may be required on the common portal.
  • EWB is generated after furnishing the details of conveyance in PART B of EWB-01 and a unique EWB number (EBN) is made available to the supplier, the recipient and the transporter on the common portal.
  • When details of conveyance in Part B is not required to be furnished: Where the goods are transported for a distance of upto fifty kilometers within the State or Union territory:
    • from the place of business of the consignor to the place of business of the transporter for further transportation;
    • from the place of business of the transporter finally to the place of business of the consignee
  • Consignment Value –The value referred to in the EWB provisions happens to be ‘Consignment Value’ – i.e., where the consignment value exceeds threshold limit, an EWB becomes mandatory. This ‘Consignment value’ is computed so as to be the transaction value inclusive of applicable GST, but excluding the value of any exempt supplies (in case of a tax-invoice-cum-bill-of-supply).
  • EWB shall be required to be issued regardless of the consignment value:
    • Where goods are sent by a principal located in one State / UT to a job worker located in any other State / UT – the e-way bill shall be generated either by the principal or the job worker [third proviso to Rule 138 (1) of the CGST Rules];
    • Where handicraft goods are transported from one State / UT to another by a person who has been exempted from the requirement of obtaining registration under Section 24(i) and (ii)
  • No EWB is required to be generated in respect of exempt goods and specific cases covered under Rule 138(14).
  • EWB is not required even when there is supply without any movement of goods
  • No EWB required where the goods are being transported by a non-motorised conveyance, , Exempt goods/ Port to Port transfers Non taxable goods/, Rail transport by Government , Empty cargo containers,Weighment and back (up to 20 km ),Empty LPG Cylinders (other than supply)
  • Person responsible-Person causing movement is required to prepare EWB. As a corollary, one who prepared EWB could be implied to be the one who caused movement of the goods
  • Bill-to-Ship-to’ (BTST) Transactions –

Although bill-to-ship-to transactions could sometimes result in twin-supply transactions, they require a single EWB since the movement is singular.

In case ship-to State is different from the Bill-to State, the tax components are entered as per the details of the bill-to person (Bill-to State)

In a typical “Bill To Ship To” model of supply, there are three persons involved in a , namely:

    • ‘A’ is the person who has ordered ‘B’ to send goods directly to ‘C’.
    • ‘B’ is the person who is sending goods directly to ‘C’ on behalf of ‘A’.
    • ‘C’ is the recipient of goods.

Order Movement of goods

It is clarified that as per the CGST Rules, 2017 either ‘A’ or ‘B’ can generate the e-Way Bill but it may be noted that only one e-Way Bill is required to be generated

  • Bill from-Ship from’ (BFSF) Transactions –

Such a situation arises where the supplier prepares the bill from his business premises to the consignee, but moves the consignment from some other premises to the consignee, based on business requirements

Validity period-Unless accepted / rejected within 72 hours, the EWB is deemed to be accepted. An EWB can only be cancelled within 24 hours of generation (unless the carriage has been intercepted / the goods delivered, prior to such time).

Validity period of EWB is one day upto 100 km and one additional day for every 100 km or part thereof thereafter. In case of Over Dimensional Cargo [or multimodal shipment in which at least one leg involves transport by ship], the limit is 20 km in place of 100 km.

Carrying of documents and devices by person in charge of a conveyance- Section 68(1) read with Rule 138 and 138A-

The person in charge of the conveyance carrying goods of consignment value exceeding Rs. 50,000/- shall carry—

  • the invoice or bill of supply or delivery challan, as the case may be;
  • a copy of the EWB in physical form or the EBN in electronic form
  • In case of imported goods, a copy of the bill of entry filed by the importer of such goods and shall indicate the number and date of the bill of entry in Part A.

Validation of documents- Section 68(2)

The details of documents required to be carried by the person in charge of conveyance shall be validated in the prescribed manner.

Interception and verification- Section 68(3) read with Rule 138B, 138C-

The Jurisdictional Commissioner or an officer empowered by him in this behalf shall, by an order, designate officer/officers as the proper officer/officers to conduct interception and inspection of conveyances and goods in the jurisdictional area specified in such order. Such an authorisation shall include verification of EWB in physical or electronic form for all inter-State and intra-State movement of goods.

Queries/doubts can be mailed at mamta0581@gmail.com.

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