TaxTMI 
TaxTMI 
19 Oct 2026 
It is really a pleasant surprise to have a circular from the Commissioner, Commercial Taxes, Tamil Nadu on 15/10/2026 on interception by squad during movement of goods within Tamil Nadu. It was only on 08/10/2026 around 7 PM the press release on the 57th GST Council meeting was officially released. Though the roadmap on section 129 and 130 are very clear, the mode of operation is yet to come by way of necessary notification/ circular/instructions from the CBIC. However, based on the decisions approved in the GST Council meeting itself, the Tamil Nadu administration has taken the lead to operationalize the above proposal as the first person in our country with immediate effect.
The renaming of the squad, the instructions on scrupulous following of the guidelines etc. are commendable. Till 14/10/2026, huge money was collected by State Tax Authorities all over India on incorrect/ deficient e invoices, though there were no intentions on evading the GST. This has helped various States only to have huge collection which were refunded later without any interest based on first appeal or writ before the jurisdictional high court as the case may be. This itself must have given the authorities the required clue that any improper invocation of section 129 or 130 does not result in actual augmentation of Revenue but only gives them interest free deposits as in a majority of cases, a major portion of such exorbitant penalties were refunded later.
The GST Council has decided to make a full stop on these improper stoppage of movement of goods as it severely affects the trade due to huge delay caused during movement of goods and accordingly proposed that no stopping of goods in states other than that of origination and destination states with instruction to act only when documents are not proper. While all States are expected to follow the decisions in line with CBIC guidelines which are expected before end of October, 2026 Tamil Nadu has already implemented the same. This shows the dynamism at the top leadership in administering the Tamil Nadu Goods and Service Tax.
The instructions as per above circular are furnished for ready reference of all concerned.
6. The Roving squads are hereby renamed as Flying Squads, to make the intention clear that they shall not be 'roving' to intercept at will, but shall move and intercept based on specific intelligence input and authorization only.
7. The Flying Squads shall remain stationary at the office of the Joint Commissioner (Intelligence) and shall be instructed by the Joint Commissioner (Intelligence) to move and intercept, based on specific intelligence input to be recorded in writing in any electronic time-stamped format such as e-office.
8. The above instructions shall be followed by all Joint Commissioners (Intelligence) scrupulously. Any deviation, in this regard will be viewed seriously. The compliance of this Circular instructions shall be monitored by the Additional Commissioner (Intelligence).
9. This Circular comes into force with immediate effect.
This is not a blanket permission to taxpayers and taxpayers are expected to have proper documents such as E way bill, Proper Invoice etc as required earlier as any deficiency on e way bill or Tax Invoice may still create obstruction during movement. The crux of the move like above is only to avoid harassment of a genuine taxpayer with bona fide intentions.
Through this communication, it is appealed to the Honourable Commissioner, Tamil Nadu to arrange for more and more training programmes to the State Tax officers as well as jurisdictional Assistant Commissioner on quality adjudication. All the officers may be instructed to periodically visit the portal https://www.gstat.gov.in/e-journals wherein they may get the latest caser laws of the GSTAT. The 57th GST Council meeting has already passed on the message that the Government is not interested in frivolous litigation as many suggestions aim on reducing the litigation. I have seen that several orders of the adjudicating officials attached to Tamil Nadu State administration of GST have been set aside or even quashed by jurisdictional high court by Madurai Bench or the Madras High Court at a later date. This itself speaks on the quality of adjudication. As there were no clarity earlier on the complex issues, same happened which can-not continue to happen now. The GSTAT benches have already passed 466 orders till 16/10/2026 and the score is improving day by day. Several issues are already settled such as improper invocation of Section 74, raising a demand on tax head mismatch where IGST is wrongly paid against CGST plus SGST etc. The benches are not only settling the issues but also giving suggestions on quality adjudication which are available in the above referred website of the GSTAT https://www.gstat.gov.in/e-journals It is now the turn of our State Tax Officials to take full advantage of the decisions of the GSTAT.
One more circular may please be issued exclusively on other 57th GST Council proposals approved on 08/10/2026 so as to facilitate the field formation to adhere to the guidelines. While invoking section 125, though the maximum penalty is reduced from 25,000 to 10,000, the penalty need not be uniform in all cases at 10,000 and for minor procedural lapses which does not result in GST collection, a lenient view may be taken by the adjudicating authority. In Tamil Nadu, the raising of demand on entire trade payables as at the closing date of the financial year on the wrong assumption that it is due for more than 180 days is not uncommon and I have a live case. The beauty is, the demand pertains to the Financial Year 2022-23 and a scrutiny of our trade payables reveal that all credits pertaining up to first 185 days of the year are fully paid and the credits accrued during last 180 days, which are not to be reversed as the 180th day has not crossed as on 31/03/2023 but the same were also considered for 18% GST demand which were fully paid during April and May 2023. Technically, the trade payables which are less than five months as on 31/03/2023 are not to be considered while issuing SCN for the year 2022-23.