E-way bill rules are applicable w.e.f. 01.04.2018 for inter-state movement of goods. As per these rules, every vehicle for road transport must carry valid E-way Bill along with Tax Invoice/Delivery Challan/Bill of supply, etc. E-way bill is a tool for the government to reduce tax evasion due to supply without payment of taxes. In order to make it more powerful and result oriented tool, government has deployed its’ officers to observe any illegitimate movement of goods and empowered them to intercept of conveyances for inspection of goods in movement, detain and confiscation of such goods and conveyances.
As per Section 68 of CGST Act 2017, 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 and devices for verification, and the said person shall be liable to produce the documents and devices and also allow the inspection of goods.
Section 122 of CGST Act 2017 provides that where a taxable person transports any taxable goods without the cover of required documents, he shall be liable to pay a penalty of Rs 10,000/- . Further, Section 129 of CGST Act 2017, where any person transports any goods or stores any goods while they are in transit in contravention of the provisions of the 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. And Section 130 of the CGST Act provides for the confiscation of goods or conveyances and imposition of penalty in case of non-compliance of provisions of law.
Documents required with Driver (‘person in charge’) during transportation of goods under GST
Rule 138A of the CGST rules prescribes that the person in charge of a conveyance shall carry the invoice or bill of supply or delivery challan, as the case may be; and in case of transportation of goods by road, he shall also carry a copy of the e-way bill in physical form or the e-way bill number in electronic form or mapped to a Radio Frequency Identification Device embedded on to the conveyance in such manner as may be notified by the Commissioner.
There is no specific procedure is defined in rules book of GST for interception, inspection, detention, seizure, confiscate, or release of goods or conveyance carrying goods. So, field officers were acting in their own way without any uniformity. As already discussed, law has given sufficient authority to field the officers and to inspect the conveyance in movement. Thus, to provide uniformity in procedures for interception of conveyances for inspection of goods in movement, and detention, release and confiscation of such goods and conveyances, CBIC issued a Circular on 13 April 2018. It is pertinent to note that the forms discussed below from MOV-01 to MOV-11 are provided through this CBIC Circular only. These forms are not the part of the GST rules book.
In this article, we will discuss the instructions/procedures given in this circular.
Person authorised to intercept and inspect :
The jurisdictional Commissioner or an officer authorised by him for this purpose shall, by an order, designate an officer(s) as the proper officer(s) to conduct interception and inspection of conveyances and goods in the jurisdictional area specified in such order . As per Circular CG-CIR-3/2017, such proper officer/officers shall be ‘Inspector of Central Tax’.
How can Proper officer verify validity of E-way Bill Number?
An e-way bill number may be available with the person in charge of the conveyance or in the form of a printout, sms or it may be written on an invoice. All these forms of having an e-way bill are valid.
Wherever a facility exists to verify the e-way bill electronically, the same shall be so verified, either by logging on to http://mis.ewaybillgst.gov.in or the Mobile App, otherwise through SMS by sending EWBVER <EWB_NO> to the mobile number 77382 99899 (For e.g. EWBVER 120100231897).
Interception and Inspection of vehicle
The proper officer may intercept any conveyance for verification of documents and/or inspection of goods.
Where all documents available with conveyance incharge
On being intercepted, the person in charge of the conveyance shall produce the documents related to the goods and the conveyance. The proper officer shall verify such documents and where, prima-facie, no discrepancies are found, the conveyance shall be allowed to move further.
Where all documents NOT available with conveyance incharge or where documents available, but officer intends to undertake an inspection:-
Where the person in charge of the conveyance fails to produce any prescribed document or where the proper officer intends to undertake an inspection, he shall record a statement of the person in charge of the conveyance in FORM GST MOV-01.
Along with this, the proper officer shall issue an order for physical verification/inspection of the conveyance, goods and documents in FORM GST MOV-02, requiring the person in charge of the conveyance to station the conveyance at the place mentioned in such order and allow the inspection of the goods.
The proper officer shall, within twenty four hours of the aforementioned issuance of FORM GST MOV-02, prepare a report in Part A of FORM GST EWB-03 and upload the same on the common portal.
What is the time limit to conclude the inspection proceedings?
Within a period of three working days from the date of issue of the order in FORM GST MOV-02, the proper officer shall conclude the inspection proceedings, either by himself or through any other proper officer authorised in this behalf.
Can limitation period of three days be extended?
Yes, where circumstances warrant such time to be extended, proper officer shall obtain a written permission in FORM GST MOV-03 from the Commissioner or an officer authorised by him, for extension of time beyond three working days and a copy of the order of extension shall be served on the person in charge of the conveyance.
Steps involved in final conclusion of proceedings
Final report:
On completion of the physical verification/inspection of the conveyance and the goods in movement, the proper officer shall prepare a report of such physical verification in FORM GST MOV-04 and serve a copy of the said report to the person in charge of the goods and conveyance.
Final Report to upload on portal
The proper officer shall also record, on the common portal, the final report of the inspection in Part B of FORM GST EWB-03 within three days of such physical verification/inspection.
Where report is in favour of assessee:-
Where no discrepancies are found after the inspection of the goods and conveyance, the proper officer shall issue forthwith a release order in FORM GST MOV-05 and allow the conveyance to move further.
Where report is against the assessee:-
Where the proper officer is of the opinion that the goods and conveyance need to be detained under section 129 of the CGST Act, he shall issue an order of detention in FORM GST MOV-06 and a notice in FORM GST MOV-07 in accordance with the provisions of sub-section (3) of section 129 of the CGST Act, specifying the tax and penalty payable. The said notice shall be served on the person in charge of the conveyance.
It is clarified that only such goods and/or conveyances should be detained/confiscated in respect of which there is a violation of the provisions of the GST Acts or the rules made thereunder.
Release of goods where report is against the assessee:
Where the owner of the goods or any person authorized by him comes forward to make the payment of tax and penalty as applicable under clause (a) of sub-section (1) of section 129 of the CGST Act, or where the owner of the goods does not come forward to make the payment of tax and penalty as applicable under clause (b) of sub-section (1) of the said section, the proper officer shall, after the amount of tax and penalty has been paid in accordance with the provisions of the CGST Act and the CGST Rules, release the goods and conveyance by an order in FORM GST MOV-05.
Further, the order in FORM GST MOV-09 shall be uploaded on the common portal and the demand accruing from the proceedings shall be added in the electronic liability register and the payment made shall be credited to such electronic liability register by debiting the electronic cash ledger or the electronic credit ledger of the concerned person in accordance with the provisions of section 49 of the CGST Act.
Option of Bank Guarantee in lieu of actual payment of tax, where report is against the assessee
Where the owner of the goods, or the person authorized by him, or any person other than the owner of the goods comes forward to get the goods and the conveyance released by furnishing a security under clause (c) of sub-section (1) of section 129 of the CGST Act, the goods and the conveyance shall be released, by an order in FORM GST MOV-05, after obtaining a bond in FORM GST MOV-08 along with a security in the form of bank guarantee equal to the amount payable under clause (a) or clause (b) of sub-section (1) of section 129 of the CGST Act.
The finalization of the proceedings under section 129 of the CGST Act shall be taken up on priority by the officer concerned and the security provided may be adjusted against the demand arising from such proceedings.
Where objections raised by Assessee against notice in FORM GST MOV-07
Where any objections are filed against the proposed amount of tax and penalty payable, the proper officer shall consider such objections and thereafter, pass a speaking order in FORM GST MOV-09, quantifying the tax and penalty payable. On payment of such tax and penalty, the goods and conveyance shall be released forthwith by an order in FORM GST MOV-05. The order in FORM GST MOV-09 shall be uploaded on the common portal and the demand accruing from the order shall be added in the electronic liability register and, upon payment of the demand, such register shall be credited by either debiting the electronic cash ledger or the electronic credit ledger of the concerned person in accordance with the provisions of section 49 of the CGST Act.
What is the time limit to pay the demand:
Amount of demand shall be paid within seven days from the date of issuance of detention order in GST MOV 6
What if demand not paid within specified time
In case the proposed tax and penalty are not paid within seven days from the date of the issue of the order of detention in FORM GST MOV-06, action under section 130 of the CGST Act (i.e. confiscation of goods) shall be initiated by serving a notice in FORM GST MOV-10, proposing confiscation of the goods and conveyance and imposition of penalty.
Confiscation of goods
Circumstances under which order for ‘Confiscation of goods’ can be issued :-
- In case the proposed tax and penalty are not paid within seven days from the date of the issue of the order of detention in FORM GST MOV-06
- Where the proper officer is of the opinion that such movement of goods is being effected to evade payment of tax.
- It is clarified that only such goods and/or conveyances should be detained/confiscated in respect of which there is a violation of the provisions of the GST Acts or the rules made thereunder.
Illustration: Where a conveyance carrying twenty-five consignments is intercepted and the person-in-charge of such conveyance produces valid e-way bills and/or other relevant documents in respect of twenty consignments, but is unable to produce the same with respect to the remaining five consignments, detention/confiscation can be made only with respect to the five consignments and the conveyance in respect of which the violation of the Act or the rules made thereunder has been established by the proper officer.
Where any action taken by one authority during movement, can the conveyance be intercepted again?
As per rule 138C (2) of the CGST Rules, 2017, where the physical verification of goods being transported on any conveyance has been done during transit at one place within a State or Union territory or in any other State or Union territory, no further physical verification of the said conveyance shall be carried out again in the State or Union territory, unless a specific information relating to evasion of tax is made available subsequently.
Since the requisite FORMS are not available on the common portal currently, any action initiated by the State tax officers is not being intimated to the central tax officers and vice-versa, doubts have been raised as to the procedure to be followed in such situations.
In this regard, it is clarified that the hard copies of the notices/orders issued in the specified FORMS by a tax authority may be shown as proof of initiation of action by a tax authority by the transporter/registered person to another tax authority as and when required.
Ignorable mistakes in documents where detention/seizure may not be initiated
In case a consignment of goods is accompanied with an invoice or any other specified document and also an e-way bill, proceedings under section 129 of the CGST Act may not be initiated, inter alia, in the following situations:
a) Spelling mistakes in the name of the consignor or the consignee but the GSTIN, wherever applicable, is correct;
b) Error in the pin-code but the address of the consignor and the consignee mentioned is correct, subject to the condition that the error in the PIN code should not have the effect of increasing the validity period of the e-way 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 digit level of HSN where the first 2 digits of HSN are correct and the rate of tax mentioned is correct;
f) Error in one or two digits/characters of the vehicle number.
In case of the above situations, penalty to the tune of Rs. 500/- each under section 125 of the CGST Act and the respective State GST Act should be imposed (Rs.1000/- under the IGST Act) in FORM GST DRC-07 for every consignment.
Further, a record of all such consignments where proceedings under section 129 of the CGST Act have not been invoked in view of the situations listed above shall be sent by the proper officer to his controlling officer on a weekly basis.
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