CGST Circular 41/2018

Circular Number	41/2018
Circular Date	13-04-2018
PDF	Download

To,

The Principal Chief Commissioners/Chief Commissioners/Principal
Commissioners/ Commissioners of Central Tax (All)/The Principal Directors
General/ Directors General (All)

Madam/Sir,

Subject: Procedure for interception of conveyances for inspection of
goods in movement, and detention, release and confiscation of such goods
and conveyances –Reg.

1) Sub-section (1) of section 68 of the Central Goods and Services Tax Act,
2017 (hereinafter referred to as the “CGST Act”) stipulates that the
person in charge of a conveyance carrying any consignment of goods of
value exceeding a specified amount shall carry with him the documents and
devices prescribed in this behalf. Sub-section (2) of the said section
states that the details of documents required to be carried by the person
in charge of the conveyance shall be validated in such manner as may be
prescribed. Sub-section (3) of the said section provides that where any
conveyance referred to in sub-section (1) of the said section is
intercepted by the proper officer at any place, he may require the person
in charge of the conveyance to produce the documents for verification,
and the said person shall be liable to produce the documents and also
allow the inspection of goods.

1.1 Rules 138 to 138D of the Central Goods and Services Tax Rules, 2017
(hereinafter referred to as the “CGST Rules”) lay down, in detail, the
provisions relating to e-way bills. As per the said provisions, in case
of transportation of goods by road, an e-way bill is required to be
generated before the commencement of movement of the consignment. Rule
138A of the CGST rules prescribes that the person in charge of a
conveyance shall carry the invoice or bill of supply or delivery challan,
as the case may be; and in case of transportation of goods by road, he
shall also carry a copy of the e-way bill in physical form or the e-way
bill number in electronic form or mapped to a Radio Frequency
Identification Device embedded on to the conveyance in such manner as may
be notified by the Commissioner.

1.2 Section 129 of the CGST Act provides for detention, seizure and
release of goods and conveyances in transit while section 130 of the CGST
Act provides for the confiscation of goods or conveyances and imposition
of penalty.

2) In this regard, various references have been received regarding the
procedure to be followed in case of interception of conveyances for
inspection of goods in movement and detention, seizure and release and
confiscation of such goods and conveyances. In order to ensure uniformity
in the implementation of the provisions of the CGST Act across all the
field formations, the Board, in exercise of the powers conferred under
section 168 (1) of the CGST Act, hereby issues the following
instructions:

(a) The jurisdictional Commissioner or an officer authorised by him for
this purpose shall, by an order, designate an officer/officers as the
proper officer/officers to conduct interception and inspection of
conveyances and goods in the jurisdictional area specified in such order.

(b) The proper officer, empowered to intercept and inspect a conveyance,
may intercept any conveyance for verification of documents and/or
inspection of goods. On being intercepted, the person in charge of the
conveyance shall produce the documents related to the goods and the
conveyance. The proper officer shall verify such documents and where,
prima facie, no discrepancies are found, the conveyance shall be allowed
to move further. An e-way bill number may be available with the person in
charge of the conveyance or in the form of a printout, sms or it may be
written on an invoice. All these forms of having an e-way bill are valid.
Wherever a facility exists to verify the e-way bill electronically, the
same shall be so verified, either by logging on to
http://mis.ewaybillgst.gov.in or the Mobile App or through SMS by sending
EWBVER to the mobile number 77382 99899 (For e.g. EWBVER
120100231897).

(c) For the purposes of verification of the e-way bill, interception and
inspection of the conveyance and/or goods, the proper officer under rule
138B of the CGST Rules shall be the officer who has been assigned the
functions under sub-section (3) of section 68 of the CGST Act vide
Circular No. 3/3/2017 – GST, dated 05.07.2017.

(d) Where the person in charge of the conveyance fails to produce any
prescribed document or where the proper officer intends to undertake an
inspection, he shall record a statement of the person in charge of the
conveyance in FORM GST MOV01. In addition, the proper officer shall
issue an order for physical verification/inspection of the conveyance,
goods and documents in FORM GST MOV-02, requiring the person in charge of
the conveyance to station the conveyance at the place mentioned in such
order and allow the inspection of the goods. The proper officer shall,
within twenty four hours of the aforementioned issuance of FORM GST
MOV-02, prepare a report in Part A of FORM GST EWB-03 and upload the same
on the common portal.

(e) Within a period of three working days from the date of issue of the
order in FORM GST MOV-02, the proper officer shall conclude the
inspection proceedings, either by himself or through any other proper
officer authorised in this behalf. Where circumstances warrant such time
to be extended, he shall obtain a written permission in FORM GST MOV-03
from the Commissioner or an officer authorized by him, for extension of
time beyond three working days and a copy of the order of extension shall
be served on the person in charge of the conveyance.

(f) On completion of the physical verification/inspection of the
conveyance and the goods in movement, the proper officer shall prepare a
report of such physical verification in FORM GST MOV-04 and serve a copy
of the said report to the person in charge of the goods and conveyance.
The proper officer shall also record, on the common portal, the final
report of the inspection in Part B of FORM GST EWB-03 within three days
of such physical verification/inspection.

(g) Where no discrepancies are found after the inspection of the goods
and conveyance, the proper officer shall issue forthwith a release order
in FORM GST MOV-05 and allow the conveyance to move further. Where the
proper officer is of the opinion that the goods and conveyance need to be
detained under section 129 of the CGST Act, he shall issue an order of
detention in FORM GST MOV-06 and a notice in FORM GST MOV-07 in
accordance with the provisions of sub-section (3) of section 129 of the
CGST Act, specifying the tax and penalty payable. The said notice shall
be served on the person in charge of the conveyance.

(h) Where the owner of the goods or any person authorized by him comes
forward to make the payment of tax and penalty as applicable under clause
(a) of sub-section (1) of section 129 of the CGST Act, or where the owner
of the goods does not come forward to make the payment of tax and penalty
as applicable under clause (b) of sub-section (1) of the said section,
the proper officer shall, after the amount of tax and penalty has been
paid in accordance with the provisions of the CGST Act and the CGST
Rules, release the goods and conveyance by an order in FORM GST MOV-05.
Further, the order in FORM GST MOV-09 shall be uploaded on the common
portal and the demand accruing from the proceedings shall be added in the
electronic liability register and the payment made shall be credited to
such electronic liability register by debiting the electronic cash ledger
or the electronic credit ledger of the concerned person in accordance
with the provisions of section 49 of the CGST Act.

(i) Where the owner of the goods, or the person authorized by him, or any
person other than the owner of the goods comes forward to get the goods
and the conveyance released by furnishing a security under clause (c) of
sub-section (1) of section 129 of the CGST Act, the goods and the
conveyance shall be released, by an order in FORM GST MOV-05, after
obtaining a bond in FORM GST MOV-08 along with a security in the form of
bank guarantee equal to the amount payable under clause (a) or clause (b)
of sub-section (1) of section 129 of the CGST Act. The finalisation of
the proceedings under section 129 of the CGST Act shall be taken up on
priority by the officer concerned and the security provided may be
adjusted against the demand arising from such proceedings.

(j) Where any objections are filed against the proposed amount of tax and
penalty payable, the proper officer shall consider such objections and
thereafter, pass a speaking order in FORM GST MOV-09, quantifying the tax
and penalty payable. On payment of such tax and penalty, the goods and
conveyance shall be released forthwith by an order in FORM GST MOV-05.
The order in FORM GST MOV09 shall be uploaded on the common portal and
the demand accruing from the order shall be added in the electronic
liability register and, upon payment of the demand, such register shall
be credited by either debiting the electronic cash ledger or the
electronic credit ledger of the concerned person in accordance with the
provisions of section 49 of the CGST Act.

(k) In case the proposed tax and penalty are not paid within seven days
from the date of the issue of the order of detention in FORM GST MOV-06,
action under section 130 of the CGST Act shall be initiated by serving a
notice in FORM GST MOV10, proposing confiscation of the goods and
conveyance and imposition of penalty.

(l) Where the proper officer is of the opinion that such movement of
goods is being effected to evade payment of tax, he may directly invoke
section 130 of the CGST Act by issuing a notice proposing to confiscate
the goods and conveyance in FORM GST MOV-10. In the said notice, the
quantum of tax and penalty leviable under section 130 of the CGST Act
read with section 122 of the CGST Act, and the fine in lieu of
confiscation leviable under sub-section (2) of section 130 of the CGST
Act shall be specified. Where the conveyance is used for the carriage of
goods or passengers for hire, the owner of the conveyance shall also be
issued a notice under the third proviso to sub-section (2) of section 130
of the CGST Act, proposing to impose a fine equal to the tax payable on
the goods being transported in lieu of confiscation of the conveyance.

(m) No order for confiscation of goods or conveyance, or for imposition
of penalty, shall be issued without giving the person an opportunity of
being heard.

(n) An order of confiscation of goods shall be passed in FORM GST MOV-11,
after taking into consideration the objections filed by the person in
charge of the goods (owner or his representative), and the same shall be
served on the person concerned. Once the order of confiscation is
passed, the title of such goods shall stand transferred to the Central
Government. In the said order, a suitable time not exceeding three months
shall be offered to make the payment of tax, penalty and fine imposed in
lieu of confiscation and get the goods released. The order in FORM GST
MOV-11 shall be uploaded on the common portal and the demand accruing
from the order shall be added in the electronic liability register and,
upon payment of the demand, such register shall be credited by either
debiting the electronic cash ledger or the electronic credit ledger of
the concerned person in accordance with the provisions of section 49 of
the CGST Act. Once an order of confiscation of goods is passed in FORM
GST MOV-11, the order in FORM GST MOV-09 passed earlier with respect to
the said goods shall be withdrawn.

(o) An order of confiscation of conveyance shall be passed in FORM GST
MOV-11, after taking into consideration the objections filed by the
person in charge of the conveyance and the same shall be served on the
person concerned. Once the order of confiscation is passed, the title of
such conveyance shall stand transferred to the Central Government. In the
order passed above, a suitable time not exceeding three months shall be
offered to make the payment of penalty and fines imposed in lieu of
confiscation and get the conveyance released. The order in FORM GST
MOV-11 shall be uploaded on the common portal and the demand accruing
from the order shall be added in the electronic liability register and,
upon payment of the demand, such register shall be credited by either
debiting the electronic cash ledger or the electronic credit ledger of
the concerned person in accordance with the provisions of section 49 of
the CGST Act.

(p) The order referred to in clauses (n) and (o) above may be passed as a
common order in the said FORM GST MOV-11.

(q) In case neither the owner of the goods nor any person other than the
owner of the goods comes forward to make the payment of tax, penalty and
fine imposed and get the goods or conveyance released within the time
specified in FORM GST MOV11, the proper officer shall auction the goods
and/or conveyance by a public auction and remit the sale proceeds to the
account of the Central Government.

(r) Suitable modifications in the time allowed for the service of notice
or order for auction or disposal shall be done in case of perishable
and/or hazardous goods.

(s) Whenever an order or proceedings under the CGST Act is passed by the
proper officer, a corresponding order or proceedings shall be passed by
him under the respective State or Union Territory GST Act and if
applicable, under the Goods and Services Tax (Compensations to States)
Act, 2017. Further, sub-sections (3) and (4) of section 79 of the CGST
Act/respective State GST Acts may be referred to in case of recovery of
arrears of central tax/State tax/Union territory tax.

(t) The procedure narrated above shall be applicable mutatis mutandis for
an order or proceeding under the IGST Act, 2017.

(u) Demand of any tax, penalty, fine or other charges shall be added in
the electronic liability ledger of the person concerned. Where no
electronic liability ledger is available in case of an unregistered
person, a temporary ID shall be created by the proper officer on the
common portal and the liability shall be created therein. He shall also
credit the payments made towards such demands of tax, penalty or fine and
other charges by debiting the electronic cash ledger of the concerned
person.

(v) A summary of every order in FORM GST MOV-09 and FORM GST MOV-11 shall
be uploaded electronically in FORM GST-DRC-07 on the common portal.

3) The format of FORMS GST MOV-01 to GST MOV-11 are annexed to this
Circular.

4) It is requested that suitable standing orders and trade notices may be
issued to publicise the contents of this Circular.

5) Difficulties, if any, in implementation of the above instructions may
be brought to the notice of the Board at an early date. Hindi version
will follow.