INSPECTION OF GOODS IN MOVEMENT UNDER GST - PART 1

Section 68 of CGST Act, 2017 deals with inspection of goods in movement. For this section, following terms are important:

• Inspection
• Goods
• Movement

Whenever there is any short coming or deficiency in the documents, it would result in consequences as stipulated in Section 129 of the CGST Act, 2017 which provides for detention, seizure and release of goods and conveyance in transit. (Refer Chapter 9 of the book).Section 130 of the CGST Act, 2017 provides for confiscation of goods and conveyance along with imposition of penalty.

Based on the Central Board of Indirect Taxes and Customs (CBIC) guidelines, Section 68 of the CGST Act, 2017, read with Rules 138 of the CGST Rules, 2017, empowers proper officer to inspect goods in transit.

Section 68 authorizes the Government to require the person in charge of a conveyance carrying goods exceeding a specified value (presently Rs. 50,000) to carry prescribed documents (invoice, bill of supply, delivery challan) and devices (e-way bill) as per rules.

It may be noted that Section 68 is a specific section for which three ingredients are important.

1. The subject matter of inspection should be goods as defined in Section 2(52) of the CGST Act, 2017
2. Such goods should be under movement i.e., in transit during the course of transportation.
3. Government, through proper officer as defined in section 2(91) of the CGST Act, 2017 can carry out inspection and verificationof goods in transit.
4. Proper officer can intercept the conveyance carrying goods at any place and verify the documents.
5. Documents and devices shall be made available for verification and inspection by the person in charge of conveyance.

The manner of validation of documents and devices and manner of inspection is prescribed in rules 138A, 138B and 138C of CGST Rules, 2017.

What is meant by 'movement'?

Since goods are tangible, they need to be carried or transported from one place to other by any means of transport in a vehicle. Such movement of goods from a place of origin to place of destination is called transportation which has to be done through a conveyance (generally called vehicle). Depending upon mode of transportation viz, surface, air or water, the conveyance vehicle could be trains, road transport vehicles, cargo ships or air cargo planes etc. Whenever the goods are transported, the vehicle/person in charge of the conveyance carrying goods is required to carry or accompany certain prescribed documents containing the requisite information about the goods, conveyance, consignor or consignee and origin and destination etc.

Section 68 prescribes that the person in charge of a conveyance carrying any consignment of goods of value exceeding a specified amount to carry with him such documents and devices as may be prescribed by the Government. On interception of the conveyance, the person in charge shall produce the prescribed documents and devices for verification and allow inspection of goods by the proper officer.

If such conveyance is intercepted by the proper officer at any place, the person in charge of the conveyance shall have to produce the documents and devices for verification and also allow the inspection of goods.

Essential conditions for inspection of goods in movement

Following are the important conditions for inspection of goods in movement:

1. Person in charge of conveyance is required to carry a prescribed document and/or devices while carrying any consignment of goods of prescribed value. It may be noted that Rules 138 to 138E of CGST Rules, 2017 prescribed for monetary limits and documents called e-way bill (sub-section 1)
2. The person in charge of a conveyance shall carry the documents, the details of which are validated in a prescribed manner (sub-section 2)
3. The conveyance or vehicle is subject to interception by the proper officer during transit.

In case of such interception, person in-charge shall:

1. Produce the documents and devices for verification
2. Allow inspection of goods
3. Liable for consequences as per section 129 and 130 of CGST Act, 2017 (confiscation and penalty) in the event of any deficiency in the documents (sub-section 3)

Prescribed documents

The documents required to be carried by the person in-charge of conveyance (bus, truck, lorry, any other transport vehicle etc.) shall be e-way bills as prescribed under rule 138 of the GST Rules, 2017. Those would include the details of vehicle, supplier, origin of goods, destination, recipient, value etc.

The registered person (supplier) or any person who is handing over or originating the delivery of goods to conveyance will generate the prescribed documents (E-way bill) on the common portal and handover to the person in-charge of the conveyance. It can also be generated by conveyance owner or recipient of goods.

Upon generation of the e-way bill on the common portal, a unique E-way Bill Number (EBN) shall be made available to the supplier, the recipient and the transporter on the common portal.

The monetary limit shall be per consignment and not per conveyance. If a truck is carrying several consignments and the value of an individual consignment is less than INR 50,000 but the combined value of different consignments in the truck is more than INR 50,000, no document (E-way bill) as prescribed in this section needs to be carried by the person in-charge of the truck. However, if a transport vehicle is carrying six consignments and out of these two are of a value of more than INR 50,000, the e-way bill will be generated by these two consignors and handed over to the person in-charge of the vehicle.

Moving goods worth more than INR 50,000 under GST will require prior online registration of the consignment and securing an 'e-waybill' that tax officials can inspect any time during transit to check tax evasion.

Rule 138 requires registered entities to furnish information to the GST Network(GSTN) website, relating to goods worth more than INR 50,000 they intend to move within a State or outside.

Validation of documents

In terms of section 68(2) of CGST Act, 2017, documents required to be carried for movement of goods shall be validated in prescribed manner, i.e., online on common portal of GSTN.

VideNotification No. 4/2017-Central Tax dated 19.06.2017 w.e.f. 22.06.2017,Central Government has notified www.gst.gov.in as the Common Goods and Services Tax Electronic Portal for facilitating registration, payment of tax, furnishing of returns, computation and settlement of integrated tax and electronic way bill. 'www.gst.gov.in' means the website managed by the Goods and Services Tax Network, a company incorporated under the provisions of section 8 of the Companies Act, 2013.

Interception of conveyance

As per section 68(3) of the 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 prescribed and devices for verification, and the said person shall be liable to produce the documents and devices and also allow inspection of goods.

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