All of us have heard of movement forms introduced by most of the states of India to check movement of goods evading duty. The rules providing for such forms provide that any goods not accompanying such form will be deemed to be without payment of tax. It is true that the forms will have no place in GST regime. It is also true that the GST will be technology driven rather than documents driven. The concept of one nation, one market, free flow of goods across states propagated for GST gives all of us a pleasant feeling. But there is no denial that there should be the strong enforcement mechanism for checking the flow of goods evading taxes. Personally, I was carrying the feeling that the taxation staff will have lesser work to attend to in GST regime so more officers will be deployed on enforcement work. But this would have meant in disruption and greater inspector raj, which is against the very philosophy of GST. On this aspect also, policy makers have decided to take the help of technology. Section 80 of revised GST model law prescribes conveyance carrying consignment of goods to carry with it a device besides the documents of goods. This provision missed the attention of most of us as this requirement was not there in model GST law released by Empowered Committee. In the current article, an attempt has been made to analyse the provisions in this regard.
INSPECTION OF GOODS IN MOVEMENT
Section 80 of Revised model law provide for the inspection of goods in movement and is as follows:
80. Inspection of goods in movement
(1) The Central or a State Government may require the person in charge of a conveyance carrying any consignment of goods of value exceeding a specified amount to carry with him such documents as may be prescribed and also to carry with him such devices in such manner as may be prescribed in this behalf.
(2) The details in documents required to be carried under sub-section (1) shall be validated in the 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 aforesaid documents and devices for verification, and the said person shall be liable to produce the documents and devices and also allow inspection of goods.
In the previous version of model law released by Empowered Committee the provision in this regard was contained in Section 61 which were as under:-
61. Inspection of goods in movement
(1) The Central or a State Government may require the person in charge of a conveyance carrying any consignment of goods of value exceeding fifty thousand rupees to carry with him such documents as may be prescribed in this behalf.
(2) Where any vehicle 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 vehicle to produce such documents for verification and the said person shall be liable to produce the documents.
NATURE OF DEVICE
It is important to note that the carrying of device is a requirement besides the requirement of documents pertaining to consignment. The term device is never used for any documents. Following questions in this respect are a matter of guessing as on date.
what could this device be?
What information will it carry?
Will it be an electronic device or mechanical device?
Who will issue such device?
But one thing is certain that it will be means for the enforcement agencies to track the movement of goods evading taxes. It is just a beginning of technology policing and there will be no two views that once this kind of practice is started, it will keep strengthening over a period of time.
VALIDATION OF DOCUMENTS
As on date, there is no method available to the enforcement team to validate the authenticity of documents accompanying the consignment except for calling the records of sender and receiver of consignment, but on the spot, all the consignments are looked at with suspicion. But in GST there will be means available to enforcement team to validate the documents accompanied with the consignment. It brings in a greater interest in respect of following points:-
Against which information, these documents will be validated?
What means would be available to officers to access that information?
Let us now try to find the answer to the above questions.
MANNER OF ISSUING INVOICES
Rule 2 of Goods and Services tax invoice rules provide for the issuance of invoices. Rule 4 and 5 of said rules are as follows:
(4) A registered taxable person may obtain an Invoice Reference Number from the Common Portal by uploading, on the said Portal, a tax invoice issued by him in FORM GST INV-1, and produce the same for verification by the proper officer as required under section 61 in lieu of the tax invoice.
(5) The Invoice Reference Number shall be valid for a period of 30 days from the date of uploading.
Thus all the invoices for a value exceeding a certain sum will be made on the GST common portal and this invoice will be carried by the transporter along with the consignments. These very invoices will be liable to be produced before the enforcement team in case of interception. The invoices will be validated with the information on GST portal.
Thus considering the above relevant points, one can easily understand that the technology will rule in the GST and there will be lesser role of discretions and human interventions. Most of the trade and industry is still in wait and watch mode. It should be a message to them to immediately start preparing themselves technologically to match the expectations of GST.
CA SANJEEV MALHOTRA
FCA, FCS, AICWA, LL.B
Indirect tax Consultant