Basic reasons why vehicles detained & goods are seized?

What are the Reasons why Vehicles detained and goods are seized by GST department ?

With the introduction of the GST regime and the accompanying requirement for e-way bills, there are lots of instances where vehicles transporting the goods are stopped at the demand of any form of discrepancy in the documents carried along with the goods.

In this post, we’ve made an effort to gather the relevant parts and regulations that the law specifies for vehicle interception and detention, as well as the regulations on the law’s penalties for both the owner of the goods and the owner of the vehicle carrying the goods.

Rule 139 of the CGST Rules, 2018, says that the validity of an e-way bill for more than 20 kms can be extended by a day.

Reasons why Vehicles detained and goods are seized by GST department:

Following are basic reason of vehicles detained and goods are used to seized by Gst Dept :

• WITHOUT e-Way Bill
• E-Way Bill is EXPIRED
• E-Way Bill VALID but CLERICAL MISTAKE in it
• INCORRECT Route of Vehicle
• MISMATCH in Quantity of Goods
• CHANGE of Vehicle not updated
• Under Valuation

Delay in Delivery after Expiry of E-Way Bill will be not be presumed as GST Evasion:

Non-delivery of goods within the validity period of e-way bill & non-extension of e-way bill will not necessarily amount to evasion of GST tax, especially when the delay is caused due to external factors. (The Honorable Supreme Court Ruling)

What is the difference between confiscation and seizure ?

• Meaning of Seizure is taking over of actual possession of goods by GST dept. Seizure can be made only after investigation or inquiry that goods are liable to confiscation.
• However the Meaning of Confiscation of the goods is the ultimate act after proper adjudication under GST law and regulation

Goods and Services Tax & Penalty as per Section 129

1, The Goods and services tax officer can directly invoke Section 130 of Central Goods and Services Tax Act, 2017 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. If it is matter of confiscation, Goods and Services Tax Notice shall be issued to owner of goods, mentioning the quantum of tax, penalty and fine. and another Goods and Services Tax notice shall be issued to owner of conveyance mentioning the quantum of fine to be charged on him.
3. Both Goods and services notices for confiscation in GST MOV-10 shall specify the tax, penalty, and fine charged due to confiscation u/s 130(2) of Central Goods and Services Tax Act, 2017.

Amount of GST penalty or fine:

If goods owner comes forward below shall be levied,

1. applicable GST tax;
2. penalty or fine equal to GST tax.
3. If it is exempted goods, penalty equal to 2% of the value of goods or INR 25k,

whichever is lower,

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

• Applicable goods and services tax ;
• penalty equal to 50% of value of goods (reduced by tax amount).
• In case of goods which is exempted, Then penalty equal to 5 percentage of the value of goods or INR 25k,

whichever is less

Other point to be considerations

1. In addition to the GST tax & penalty or fine will be levied under section 129 of Central Goods and Services Tax Act, 2017, goods owner shall also be charge with penalty or fine, if goods are confiscated. Such penalty or fine can be levied by at the option of the officer, provided that:
2. Amount of penalty or fine shall not exceed value of goods less tax leviable on such goods.
3. Aggregate of fine and penalty shall be more than the penalty levied under section 129(1) of Central Goods and Services Tax Act, 2017.
4. Apart from goods owner, conveyance owner shall also be charged with penalty or fine, if goods are confiscated. Such fine shall be equal to the amount of tax payable on such goods.
5. Goods and services tax Order for confiscation of goods or conveyance or for imposition of penalty or fine shall not be passed without giving opportunity of being heard.
6. If Goods and services tax order is passed under GST MOV-11, then previous GST Order passed under GST MOV-09 shall deemed withdrawn.

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