UNDERVALUATION OF GOODS IN TRANSIT

[Sadanand Bulbule]

Dear Experts

Dhanteras Greetings.

Unlike in the pervious indirect tax regime like VAT,Central Excise, in my opinion the specific provision to deal with the situations of suspecting the undervaluation of goods in transit is not available under the present GST Acts. Despite, the proper officers under the GST Acts during the course of interception of conveyance are resorting to estimate the value of goods being in transit and proposing to levy penalty under Section 129(3) of the GST Acts by rejecting such documents, on the ground of huge difference between transaction value as per the prevailing market rate and the value of goods declared in tax invoice.To substantiate their estimation, some times proper officers are relying on the expert opinions of the reputed research institutions based on the testing of such sample goods drawn from the conveyance.

The query is, whether the proper officers are empowered to suspect the value of goods being in transit based on the prevailing market rates, estimate the value of such suspected goods and levy penalty under Section 129(3) of the GST Acts on such grounds? And why?

Please enlighten on the issue.

AI Summary

Debate on GST Officers' Authority to Suspect Undervaluation and Impose Penalties Under Section 129(3) of GST Acts A participant raised a query regarding the authority of GST officers to suspect undervaluation of goods in transit based on market rates and impose penalties under Section 129(3) of the GST Acts. The concern is whether officers can estimate goods' value and levy penalties when there is a significant discrepancy between market rates and declared invoice values. In response, another participant referenced a Kerala High Court case, suggesting it might provide relevant insights. The original participant expressed gratitude for the clarification provided.