GST SEARCH: RELEASE AND DISPOSAL OF SEIZED ITEM

Provisional release

Rule 140 of CGST Rules, 2017 deals with bond and security for release of seized goods. The seized goods may be released on a provisional basis upon execution of a bond for the value of the goods in FORM GST INS-04 and furnishing of a security in the form of a bank guarantee equivalent to the amount of applicable tax, interest and penalty payable. The "applicable tax" shall include central tax and State tax or central tax and the Union territory tax, as the case may be and the Cess, if any, payable under the Goods and Services Tax (Compensation to States) Act, 2017.

In terms of Rule 140(2) of CGST Rules, 2017, in case the person to whom the goods were released provisionally fails to produce the goods at the appointed date and place indicated by the proper officer, the security shall be enchased and adjusted against the tax, interest and penalty and fine, if any, payable in respect of such goods.

The goods so seized shall be released on a provisional basis, upon execution of bond and furnishing of security, viz:

1. execution of bond in Form GST INS -04 for the value of the goods and
2. furnishing of security in the form of bank guarantee equal to the amount of applicable tax (incl. SGST/UTGST/IGST/Cess) + interest + penalty or on payment of applicable tax, interest and penalty payable, as the case may be.

Once the goods are provisionally released and where the person fails to produce the goods at the appointed date and place indicated by the proper officer, the security shall be encashed and adjusted against the liabilities in respect of such goods.

Provisional release of goods has to be mandatorily taken by the concerned person within one month of executing the bond.

Power of Government to dispose off seized material

In terms of section 67(8), the Central or a State Government may, having regard to the perishable or hazardous nature of any goods, depreciation in the value of the goods with the passage of time, constraints of storage space for the goods or any other relevant considerations, by notification, specify the goods or class of goods which shall, as soon as may be after its seizure under section 67(2), be disposed off by the proper officer in such manner as the central or a state government may prescribe.

The Central or a State Government may, having regard to the:

• perishable or hazardous nature of goods, or
• depreciation in the value of the goods with the passage of time, or
• constraints of storage space for the goods, or
• due to any other relevant considerations

may specify the goods or class of goods by Notification, which shall after its seizure as soon as may be, disposed off by the proper officer in such manner as determined by the Central or a State Government.

Purchase of goods by officer

In terms of section 67(12) of CGST Act, 2017, the Commissioner or an officer authorised by him may cause purchase of any goods or services or both by any person authorised by him from the business premises of any taxable person, to check the issue of tax invoices or bills of supply by such taxable person, and on return of goods so purchased by such officer, such taxable person or any person in charge of the business premises shall refund the amount so paid towards the goods after cancelling any tax invoice or bill of supply issued earlier.

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