Goods in transit are subject to inspection, verification, and detention by tax authorities to ensure compliance with GST regulations. This process can be complex and time-consuming for businesses, as it involves navigating various rules and procedures across different states and jurisdictions. Understanding the legal requirements and procedures for inspection, verification, and detention of goods in transit is crucial for businesses to ensure smooth and efficient transportation of their goods.
E-way bills are primarily used to enable efficient transit of goods through checkpoints. Let’s look at the many steps that are taken when transporting goods from one location to another. When the products are prepared for transport, the transporter must ensure to carry an invoice and an e-way bill or e-way bill number.
An appropriate authority may inspect vehicles transporting goods to verify the contents or examine the validity of the paperwork. However, if a physical verification of identical products has already been conducted in any state or union territory, the officer cannot conduct another one. In case of suspected tax fraud, the officer may make an exception and stop the vehicle for inspection.
Following the interception, the officer must file the following documentation:
The authorised officer must take the following actions if the transporter refuses to deliver the documentation requested for verification:
Given below are some of the consequences of discrepancies being found in different situations:
An order in Form GST MOV-05 shall be passed, releasing the vehicle and goods, and the vehicle may proceed if no anomalies are discovered throughout the inspection and verification process. The abovementioned procedure shall be completed immediately and three days after the inspection order.
The officer may take the following steps if they determine that the goods need to be held after the inspection and verification process:
The owner of the goods may do any of the following after receiving the notice to pay tax and penalty:
The officer must serve a notice proposing to seize the items and vehicle if the specified amount is not paid or he suspects tax evasion.
Form GST MOV-09 will be withdrawn, and Form GST MOV-11 will be used to pass the final order. The common portal must also be updated with an order summary. When a vehicle is seized, the vehicle’s name and contents are given to the central government; after a fine has been paid, the vehicle is returned.
When the taxpayer is unregistered under the situations mentioned above, a temporary ID must be generated to process the payments. Below is a table with a summary of the different forms involved.
|GST MOV-01||Statement of owner, driver or person in charge of the vehicle|
|GST MOV-02||Order for physical verification and inspection of goods, conveyance or documents|
|GST MOV-03||Order for extension of time beyond 3 days for inspection|
|GST MOV-04||Physical verification report|
|GST MOV-05||Release order|
|GST MOV-06||Order of detention|
|GST MOV-07||Notice specifying the tax and penalty amount|
|GST MOV-08||Bond for provisional release of goods/ conveyance|
|GST MOV-09||Order of demand of tax and penalty|
|GST MOV-10||Notice for the confiscation of goods|
|GST MOV-11||Order of confiscation of goods and conveyance and demand of tax, fine and penalty|
The advantages of these techniques have not yet been realised because they are still in the early stages of development. The e-way bill system has brought about significant changes in how goods in transit are inspected, verified, and detained.
The system has enabled authorities to track transportation of goods in real time, ensuring compliance with tax laws and preventing tax evasion. Additionally, the e-way bill has reduced the need for physical inspections, saving time and resources for both the authorities and transporters.