DETENTION, SEIZURE AND RELEASE OF GOODS AND CONVEYANCES INTRANSIT AND PENALTY THEREOF - Handbook of GST Law & Procedures (CBIC) [October 2024] - GST

10. DETENTION, SEIZURE AND RELEASE OF GOODS AND CONVEYANCES INTRANSIT AND PENALTY THEREOF 10.1 Section 129 of the CGST Act, 2017 deals with detention, seizure and release of goods and conveyances in transit. It states that where any person transports any goods or stores any goods while they are in transit in contravention of the provisions of the CGST Act, 2017 or the rules made thereunder, all such goods and conveyance used as a means of transport for carrying the said goods and documents relating to such goods and conveyance shall be liable to detention or seizure. 10.2 Section 129 of the CGST Act, 2017 further specifies the quantum of penalties as detailed below: Situation Quantum of Penalty a. Where the owner of the goods come forward for payment of such penalty Penalty equal to two hundred per cent of the tax payable on such goods and, in case of exempted goods, on payment of an amount equal to two per cent of the value of goods or twenty-five thousand rupees, whichever is less. b. Where the owner of the goods does not come forward for payment of such penalty Penalty equal to fifty per cent of the value of the goods or two hundred per cent of the tax payable on such goods, whichever is higher, and in case of exempted goods, on payment of an amount equal to five per cent of the value of goods or twenty-five thousand rupees, whichever is less. c. In both the situations as mentioned in a b above Upon furnishing a security equivalent to the amount payable under clause (a) or clause (b) in such form and manner as may be prescribed: 10.3 As per the proviso to Section 129(1) of the CGST Act, an order of detention or seizure of such goods has to be served on the person transporting the goods before detention/seizure of goods or conveyance. 10.4 As per Section 129(3) of the CGST Act, 2017 the proper officer detaining or seizing goods or conveyance shall issue a notice within seven days of detention or seizure, specifying the penalty payable. The proper officer shall pass an order within a period of seven days from the date of service of such notice, for payment of penalty under clause (a) or clause (b) of sub-section (1) of Section 129(1) of the CGST Act, 2017. 10.5 The Proper officer assigned to function in respect of Section 129(3) of the CGST Act, 2017 is the Deputy or Assistant Commissioner of Central Tax. 10.6 As per Section 129(4) of the CGST Act, 2017 no penalty shall be determined under sub-section (3) without giving the concerned person an opportunity of being heard. 10.7 As per Section 129(5) of the CGST Act, 2017 all proceedings in respect of the notice specified in sub-section (3) shall be deemed to be concluded on payment of the amount mentioned in Section 129(1) of the CGST Act, 2017 by the concerned person. 10.8 As per Section 129(6) of the CGST Act, 2017, if the person transporting any goods or the owner of goods fails to pay the amount of penalty within fifteen days from the date of receipt of the order passed by the proper officer, the goods or conveyance detained or seized shall be liable to be sold or disposed of otherwise, within the prescribed time and manner, to recover the penalty payable. 10.9 The conveyance shall be released on payment of penalty or one lakh rupees, whichever is less, by the transporter. If the detained or seized goods are perishable or hazardous in nature or are likely to depreciate in value with passage of time, the stipulated period of fifteen days may be reduced by the proper officer. 10.10 The Proper officer to function in respect of this section is the Additional or Joint Commissioner.