As five states implement intra-state e-way bill system for movement of goods, the Central Board of Indirect Taxes and Customs has issued instructions that need to be followed for inspecting goods being transported.
A field officer can stop a conveyance for verification of documents or inspection of goods, according to the CBIC circular issued on Saturday.
The transporter can show the officer a print out of e-way bill number, the number written on an invoice or even a text message. The field officer can verify the e-way bill number by sending a message if need be.
If any discrepency is found in the documents, the field officer will have to record a statement of the person transporting the goods, and issue an order requiring to stop the vehicle at a place for inspection. In 24 hours after issuing such an order, the field officer will have to prepare a report of the same, and upload it on the Goods and Services Tax portal.
Within three days after issuing an order, a report of inspection will have to be prepared and will have to be given to the person who is reponsible for transporting goods. The same report will also have to be uploaded on the GST portal.
If no discrepencies are found, the officer can issue a release order and allow goods to be transported further. However, if the officer wants to detain the goods, a detention order, and a notice specifying tax and penalty payable needs to be served to the transporter or person responsible for transporting goods under Section 129 of Central GST Act, the circular said.
Section 29 provides a penalty amounting to 100 percent of tax payable on goods detained, or less than two percent of the value of goods or Rs 25,000 in case of goods are exempted from tax. The goods shall be released only when the owner of goods or the person responsible, pays tax and penalty. The goods can also be released on furnishing of a bond or bank guarantee equal to the total amount.
If the tax and penalty is not paid within seven days from the date the detention order has been issued, a notice can be served for confiscation of goods and imposition of penalty.
If the officer finds that payment of tax is being evaded, he may issue a notice for confiscation of goods, and impose a penalty equal to the amount of tax payable under Section 130 of CGST Act.
No order for confiscation of goods or conveyance, or for imposition of penalty, shall be issued without giving the person an opportunity of being heard.
The order for confiscating goods will have to be uploaded on the GST portal with responses or objections of the goods’ owner. After the order is passed, the ownership of these goods will be transferred to the central government. If the owner pays the dues, goods will be released within three months by the government. However, if the payment is not made within stipulated time mentioned in the order, the officer can auction the goods and give the proceeds to the central government.
The instructions issued by the government will ensure uniformity in the procedures followed by GST authorities, in cases of interception of vehicles for inspection or detention of goods, Abhishek Jain, partner at EY India, told BloombergQuint.
With responsibilities such as time-bound uploading of reports or 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, Partner, EY India