Detailing the uniform procedure for interception and inspection of goods under the e-way bill system of the goods and services tax (GST), the Central Board of Indirect Taxes and Customs (CBIC) has instructed field officials to submit inspection reports within three days of intercepting conveyances. The Board has also instructed officials to not issue an order for confiscation of goods or conveyance, or for imposition of penalty, without giving the person in charge of the conveyance an opportunity of being heard. The uniform procedure for interception of goods comes ahead of the launch of intra-state e-way bill system in five states — Andhra Pradesh, Telangana, Kerala, Gujarat and Uttar Pradesh — from Sunday. The e-way bill system for inter-state movement of goods has already been introduced from April 1 along with intra-state e-way bill system for Karnataka.
Stating that e-way bill number by the person in charge of the conveyance in the form of a printout, SMS or on an invoice will be valid, the Board has instructed that in case the proposed tax and penalty are not paid within seven days from the date of the issue of the order of detention, action under Section 130 of the CGST Act shall be initiated by serving a notice, proposing confiscation of the goods and conveyance and imposition of penalty. A release order shall be issued by the designated officer when there are no discrepancies. However, where officer is of the view that goods and conveyance need to be detained, an order of detention and notice, specifying tax and penalty payable, shall be served on the person in charge of conveyance.
Section 129 of the CGST Act provides for a penalty equal to 100 per cent of tax payable on goods detained. In case goods are otherwise exempted from tax, fine shall be lower of 2 per cent of the value of goods or Rs 25,000. The penalty amount rises in case the owner of goods does not come forward for payment of tax and penalty.
The instructions also stated that in case the tax and penalty is not paid within seven days from the date of issue of detention order, a notice can be served proposing confiscation of goods and conveyance and imposition of penalty. Also, where the proper officer is of the opinion that such movement of goods is being made to evade payment of tax, he may directly invoke section 130 of the CGST Act by issuing a notice proposing to confiscate the goods and conveyance.
Once the confiscation order is passed, title of such goods/ conveyance shall stand transferred to the Central Government. Such goods/ conveyance may, however, be released within three months after making payment of demands imposed, but where the payment of dues is not made within the time specified in such order, the officer can also auction the goods/ conveyance and remit sale proceeds to the central government.
Tax experts said such uniform procedures will ensure that businesses do not face hardships in using the e-way bill system. “With responsibilities like time-bound uploading of reports/ forms by revenue authorities, time bound closure of cases where goods have been detained, instructions to release goods where there are no prima-facie irregularities, etc., it is expected that e-way bill inspections may not entail unwarranted hardships to businesses,” Abhishek Jain, tax partner, EY India said. Pratik Jain, leader (indirect tax), PwC said, “While the provisions as regard confiscation of goods and conveyance have already been provided in GST law, such a detailed clarification reminds taxpayer as well the transporter to duly comply with the legal provisions of e-way bill. The industry should re-look at the processes currently being followed for e-way bill generation and explore the possibility of automating the same to avoid unnecessary legal disputes on account of preventable errors.”