In the GST regime, a registered person or transporter has to follow the E-way Bill rules while transporting goods. E-Way bill stands for Electronic Way Bill. Traders and transporters can generate it on the common portal. The government ordered the dismantling of check posts from 1st July 2017. However, the government still has to check the movement of goods and inspect them. Therefore, the GST Council has also released E-Way Bill Inspection rules.
Following are the guidelines for inspection, search, seizure and release of goods, under GST.
E-way Bill Inspection rules: Section 139
Inspection, search and seizure:
- Form GST INS-01: A Joint Commissioner can order a subordinate officer to inspect or search a place under provisions of section 67. He can also authorize the subordinate to seize any goods.
- Form GST INS-02: The Joint Commissioner or authorized officer will issue an order of seizure where things are liable for seizure under section 67(2).
- The owner or custodian will not remove, part with, or otherwise deal with the goods without the officer’s permission.
- Form GST INS-03: Where it is not possible to seize the goods, the Joint Commissioner or authorized officer may serve an order of prohibition. So, the owner or custodian of goods cannot remove, part with or deal with the goods without prior permission.
- The officer who seizes the goods, documents, books or things will prepare an inventory of the goods or documents or books. It will include details of description (make/model) and quantity or unit. The owner of goods will sign the inventory declaration.
Authorized officers can stop any mode of transport inter-state and intra-state movements.
According to the E-way Bill inspection rules, the Commissioner may authorize an officer to stop a consignment to verify the e-way bill. An officer will inspect the goods only once during the journey in any State or Union Territory. However, the officer can stop the vehicle again if there is any ‘specific information’ regarding tax evasion even if inspection is already done. The authorized officer can also physically verify the goods.
The government will install RFID readers at places where officers will verify movement of goods. For this, traders will have to map the e-way bill with RFID.
E-Way Bill Inspection Rules:
If a vehicle is stopped or detained for more than 30 minutes, the transporter can upload this information in Form GST EWB-04. The inspecting officer will record an inspection summary goods in transit in Part A of GST EWB-03 within 24 hours of inspection. He will submit the final report in Part B of GST EWB-03 within 3 days of inspection.
E-Way Bill Inspection rules: Section 140
Bond and Security for release of seized goods:
- Form GST INS-04: The officer can release the seized goods on a provisional basis upon execution of a bond for the value of the goods. The owner will provide a bank guarantee as security. The bank guarantee will be equal to the amount of applicable tax, interest and penalty payable. The applicable tax will include CGST and SGST or CGST and UT-GST as the case may be. It will also include any cess payable under the GST (Compensation to States) Act, 2017.
- The proper or authorized officer can release the goods provisionally against security. The person who receives the goods will have to produce them at an appointed date and time. In case he doesn’t, the security will be en-cashed and adjusted against the tax (with interest and penalty if any).
- Form GST INS-05: If the goods are perishable or dangerous, the proper/authorized officer can release the goods. The owner will pay an amount equal to the market price of the goods or the pending tax (with interest and penalty if any). The concerned office may order the release of the goods after getting proof of payment.
The GST Council aims to implement the E-way Bill mechanism from 1st April 2018. So, transport operators now need to prepare for increase in compliance.
Learn about E-Way Bill – who should generate it, for how long is it valid, documents to be carried by person in charge of conveyance – here.