After the GST regime is implemented and thereafter e-way bill has been made mandatory, there are many cases wherein vehicles carrying the goods are detained at behest of any sort of discrepancies in documents carried along with the goods. In this write-up we have tried to compile the necessary sections and rules wherein the law prescribes for interception/detention of vehicle and thereafter, about the law to penalize owner of goods and owner of the vehicle carrying the goods.

Section 68 of CGST Act, 2017 read with Section 129 of CGST Act, 2017 read with Rule 138B of CGST Rules, 2017 gives the right to the respective officer to intercept the vehicle and check the documents relating to goods being carried in the vehicle.

  • Section 68(3) states that where any conveyance 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.
  • Rule 138B(1) states that the Commissioner or an officer empowered by him may authorize the proper officer to intercept any conveyance to verify the e-way bill in physical or electronic form for all inter-State and intra-State movement of goods.
  • Section 129 states that if any person:
    • transports any goods or
    • stores any goods

while they are in transit in contravention of the provisions of this act or the rules made thereunder,

    • all such goods and conveyance used as a means of transport for carrying the said goods
    • and documents relating to such goods and conveyance
    • shall be liable to detention or seizure.

♦ Procedures ahead of interception/detention of goods or vehicles

(Reference: – Circular No. 41/15/2018 dated 13.04.2018 as also amended by circular no. 88/07/2019 dated 01.02.2019)

  • The officer shall submit summary report in Part A of FORM GST EWB-03 of all the inspections within 24 hours of the inspection.
  • Further, the officer shall submit final report in Part B of FORM GST EWB-03 within 3 days of inspection.(Period of twenty-four hours or three days shall be counted from the midnight of the date on which the vehicle was intercepted) (Rule-138C)
  • In case the vehicle is detained for more than 30 minutes, the officer may upload the information in Form EWB-04 on the portal.(Rule-138D)

In the cases whereverany vehicle is intercepted by the officer and the person in charge of the conveyance (hereinafter referred to as “Driver“) fails to produce the necessary documents as asked by the officer or the officer wants to undertake the inspection, the officer shall follow the procedures and documents trail as prescribed in Circular No. 41/15/2018 dated 13.04.2018, same are summarized below:

Actions to be taken by officer Prescribed Forms
> Record statements of driver of the vehicle GST MOV-01
> Issue an order for physicalverificationofthe conveyance, goods anddocuments and to stop and park the vehicle at the place mentioned in the order GST MOV-02
> Preparation of report within 24 hours of issuance of GST MOV-02, and upload on the portal Part A ofGST EWB-03
> Physical verification shall be completed within 3 days of issuance of GST MOV-02.However, if same cannot be completed, written permission shall be obtained from Commissioner to extend the time beyond 3 days GST MOV-03
> Report of completion of Physical verification shall be issued to driver GST-MOV-04
> Such final report shall be updated by officer on common portal within 3 days Part B of GST EWB-03
> Release order shall be issued if no discrepancies are found and release the vehicle GST MOV-05
> If officer wants to detain goods and vehicle, order of detention shall be issued GST MOV-06
> Notice along-with above order shall be issued for detention GST MOV-07
> On receipt of abovesaid notice, owner of the goods may move ahead as per following:
  • If Owner accept the tax and penalty as per notice(Section-129)
o He can deposit amount of tax and penalty by debiting Electronic Cash Ledger or Credit Ledger
(relevant forms)
GST PMT-01/
GSTPMT-02/
GST PMT-05/
GST PMT-06/ GST DRC-03/
> OR he can submit bond along with security in form of bank guarantee GST MOV-08
> Order for releasing of Goods and conveyance shall be passed GST MOV-05
  • If Owner does not accept the tax and penalty(Section-129)
> Reply should be filed along with the objections
> Speaking order shall be passed by officer and upload on common portal GST MOV-09
> Order for releasing of Goods and conveyance shall be passed after tax and penalty are paid GST MOV-05
> If above stated tax penalty are not deposited within 14 days of issuance of order of detention, Notice for confiscation of Goods and Conveyance, shall be issued (Section-130) ## GST MOV-10
> Reply to the notice shall be submitted by the owner of the goods and conveyance
> Final Order(s) ofConfiscation of Goods and Conveyance shall be passed and served upon the owners of goods and conveyance and also shall be uploaded on common portal. A common order can also be passed by officer to owner of goods and owner of conveyance. ## GST MOV-11

♦ Tax and Penalty as per Section 129

a. If owner of goods comes forward following shall be levied,

i. applicable tax and;

ii. penalty equal to tax.

iii. in case of exempted goods, penalty equal to 2% of the value of goods or Rs.25000, whichever is less

b. If owner of goods does not come forward following shall be levied,

i. applicable tax and;

ii. penalty equal to 50% of value of goods (reduced by tax amount).

iii. in case of exempted goods, penalty equal to 5% of the value of goods or Rs.25000, whichever is less

♦ ##More details about confiscation

1. The officer can directly invoke Section 130 and issue notice for confiscation of goods and conveyance, if he is of the opinion that goods are being carried for evasion of tax.

2. In case of confiscation, Notice shall be issued to owner of goods, mentioning the quantum of tax, penalty and fine. And also, another notice shall be issued to owner of conveyance mentioning the quantum of fine to be charged on him.

3. Both notices for confiscation in GST MOV-10 shall specify the tax, penalty, and fine charged due to confiscation u/s 130(2) of CGST Act, 2017.

4. Quantum of fine:

a. Apart from tax and penalty levied u/s 129 of CGST Act,2017, owner of goods shall also be charge with fine, if goods are confiscated. Such fine can be levied by at the option of the officer, provided that:

i. Quantum of fine shall not exceed value of goods less tax leviable on such goods.

ii. Aggregate of fine and penalty shall be more than the penalty levied u/s 129(1).

b. Apart from owner of goods, owner of conveyance shall also be charged with fine, if goods are confiscated. Such fine shall be equal to the amount of tax payable on such goods.

5. Order for confiscation of goods or conveyance or for imposition of penalty shall not be passed without giving opportunity of being heard.

6. If order is passed under GST MOV-11, then earlier order passed under GST MOV-09 shall stand withdrawn.

7. The amount so determined in order(s) in GST MOV-11 shall be paid within time specified in the order (such time cannot be more than 3 months). In case of non-payment within time specified,officer shall have the right to auction the goods and the conveyance by public auction and sale proceeds so collected shall be remitted to account of Government.

♦ Without prejudice to legality and gravity, outline clarification of some relevant words are given below:

√ Detention

Through respective legal order or notice actual owner is not allowed/barred to have access to the goods, however ownership remains with the actual owner.

√ Confiscation

This is last measure taken by Government authority, in this situation ownership and possession both transfers to the Government authority passing order of confiscation. And then actual owner does not have any right on such goods.

Disclaimer: The entire above stated article is squarely based on our opinion, derived from the interpretation of the respective sections, rules and circulars as amended and other notifications. The observations are the personal view and the authors do not take responsibility of the same and this cannot be quoted before any authority.

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