Detention under GST : Analysis
we will analyse the provisions of detentions under GST act of India
Detention meaning
To know the meaning of detention , you can read this topic Detention meaning in GST Act of India
When can Detention of goods and conveyances be made
Notwithstanding anything contained in this Act, where any person transports any goods or stores any goods while they are in transit in contravention of the provisions of this Act or rules made thereunder, all such goods and the conveyance used as a means of transport for carrying the said goods and documents relating to such goods and conveyances shall be liable to detention or seizure. section 129(1) of CGST Act.
What is the procedure for Detention of Goods or Conveyance
Procedure for road checks
CBI&C has issued detailed circular No. 41/15/2018-GST dated 13-4-2018, elaborating procedure for interception of conveyances for inspection of goods in movement, detention, release and confiscation of contravening goods and conveyances.
What is the penalty if Goods are detained
After detention or seizure, the goods and conveyance shall be released—
| (a) | on payment of the applicable tax and penalty equal to one hundred per cent of the tax payable on such goods and, in case of exempted goods, on payment of an amount equal to two per cent of the value of goods or twenty five thousand rupees, whichever is less, where the owner of the goods comes forward for payment of such tax and penalty. | |
| (b) | on payment of the applicable tax and penalty equal to the fifty per cent of the value of the goods reduced by the tax amount paid thereon and, in case of exempted goods, on payment of an amount equal to five per cent of the value of goods or twenty five thousand rupees, whichever is less, where the owner of the goods does not come forward for payment of such tax and penalty. | |
| (c) | upon furnishing a security equivalent to the amount payable under clause (a) or clause (b) in such form and manner as may be prescribed – section 129(1) of CGST Act. |
How detention of Goods or conveyance can be made
No such goods or conveyance shall be detained or seized without serving an order of detention or seizure on the person transporting the goods – proviso to section 129(1) of CGST Act.
what is to be done to get released detained goods or conveyance
The provisions of section 67(6) of CGST Act 2017 shall, mutatis mutandis, apply for detention and seizure of goods and conveyances – section 129(2) of CGST Act.
Under section 67(6) of CGST Act,
The goods so seized under section 67(2)of CGST act 2017 shall be released, on a provisional basis, upon execution of a bond and furnishing of a security, in such manner and of such quantum, respectively, as may be prescribed or on payment of applicable tax, interest and penalty payable, as the case may be.
Comment : Provisional release can be made on bond and security
How detained goods or conveyances will be released
Passing of order after seizure or provisional release
The proper officer detaining or seizing goods or conveyances shall issue a notice specifying the tax and penalty payable and thereafter, pass an order for payment of tax and penalty under clause (a) or clause (b) or clause (c) [ of Section 129(1)] – section 129(3) of CGST Act.
Who is the proper officer to issue Notice and Pass order for detained goods or conveyances
Deputy/Assistant Commissioner of Central Tax has been designated as ‘proper officer’ for the purpose of section 129(3)- CBE&C circular No. 3/3/2017-GST dated 5-7-2017 [State Government will prescribe ‘proper officer’ for purpose of SGST in the respective State].
Can the Officer pass the order without hearing person
No tax, interest or penalty shall be determined under section 129(3) of CGST Act without giving the person concerned an opportunity of being heard – section 129(4) of CGST Act.
What will happen if payment is made as per order for detained goods or conveyances
On payment of amount referred in section 129(1) of CGST Act., all proceedings in respect of the notice specified in section 129(3) of CGST Act shall be deemed to be concluded. [section 129(5) of CGST Act.]
What will happen if payment is not made as per order for detained goods or conveyances
Recovery by confiscating offending goods if person does not pay
Where the person transporting any goods or the owner of the goods fails to pay the amount of tax and penalty as provided in section 129(1) of CGST Act within seven days of such detention or seizure, further proceedings shall be initiated in accordance with the provisions of Section 130( Confiscation of goods or conveyances and levy of penalty.) – section 129(6) of CGST Act
Where the detained or seized goods are perishable or hazardous in nature or are likely to depreciate in value with passage of time, the said period of seven days may be reduced by the proper officer – proviso to section 129(6) of CGST Act
‘Proper Officer’ to reduce the period of seven days under proviso to section 129(6) of CGST Act, for the purpose of CGST is Additional Commissioner/Joint Commissioner of Central Tax, vide CBE&C circular No. 3/3/2017-GST dated 5-7-2017 [State Government will prescribe ‘proper officer’ for purpose of SGST in the respective State].