GST - INSPECTION OF GOODS IN MOVEMENT

Inspection in movement (Section 68)

1. Any inter-state consignment, value of which is exceeding Rs. 50,000/-, may be stopped at any place for verification of the documents/devices prescribed for movement of such consignment (monetary limits for intra-state consignments are different as fixed by State Governments).
2. If on verification of the consignment, during transit, it is found that the goods were removed without prescribed document or the same are being supplied in contravention of any provisions of the Act then the same can be detained or seized and may be subjected to penalties as prescribed.
3. To ensure transparency and minimize hardships to the trade, the law provides that if during verification, in transit, a consignment is held up beyond 30 minutes the transporter can feed details on the portal. This will ensure accountability and transparency for all such verifications. Moreover, for verification during movement of consignment will also be done through a Digital interface and therefore the physical intervention will be minimum and as has already been mentioned that in case of a delay beyond 30 minutes the transporter can feed the details on the portal.

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. 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 verification of 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)