GST E-Way Bill: Procedures for Inspection and Detention of Goods
This article explains the GST e-way bill inspection and detention processes for goods in transit in India. It details how authorized officers intercept vehicles, the documentation required, and the steps taken when discrepancies are found or not found. The piece also covers the implications for transporters who fail to provide documents, the owner's options upon receiving a tax and penalty notice, and the consequences of non-payment, including potential confiscation of goods and vehicles.
The primary objective of the E-way bill system is to facilitate the unhindered movement of goods across checkpoints. This guide explores the different procedures involved in transporting goods. Before dispatching goods, transporters must ensure they have both a valid E-way Bill (or its number) and the corresponding invoice.
Latest Updates on E-Way Bill Regulations
August 29, 2021: Taxpayers were exempted from e-way bill blocking due to non-filing of GSTR-1 or GSTR-3B (for two or more months for monthly filers, or one or more quarters for QRMP taxpayers) during the period of March to May 2021, applicable from May 1, 2021, to August 18, 2021.
August 4, 2021: The blocking of e-way bills for non-filing of GSTR-3B recommenced from August 15, 2021.
June 1, 2021: The e-way bill portal clarified that a GSTIN under suspension cannot generate an e-way bill. However, a suspended GSTIN can still be the recipient or transporter for an existing e-way bill. Additionally, the 'Ship' transport mode was updated to 'Ship/Road cum Ship', allowing users to enter vehicle numbers for initial road transport and bill of lading details for subsequent ship movement. This change supports ODC benefits for multimodal transport and simplifies vehicle detail updates.
May 18, 2021: The CBIC, through Notification 15/2021-Central Tax, specified that e-way bill generation blocking applies only to the defaulting supplier's GSTIN, not to the defaulting recipient's or transporter's GSTIN.
Official Interception and Inspection Procedures
While goods are in transit, an authorized officer has the authority to stop and inspect any vehicle conveying them. This interception can occur to verify documents or to physically inspect the goods. The officer will check all relevant transporter documents, such as the E-way bill and invoice. Crucially, if a physical verification of the same goods has already taken place in any state or union territory, a second physical inspection cannot be performed unless there is specific intelligence regarding tax evasion.
Required Documentation Post-Interception or Inspection
Upon intercepting a vehicle, the officer must file specific documents: a summary report using Form GST EWB-03 Part A within 24 hours of the inspection, and a final report utilizing Form GST EWB-03 Part B within three days of the inspection.
Consequences for Transporters Failing to Provide Documents
Should a transporter be unable to present the requested verification documents, the authorized officer must proceed as follows: First, record the transporter's statement using Form GST MOV-01. Second, issue an inspection order for the goods via Form GST MOV-02. Third, after completing these proceedings, update a report using Form GST MOV-04.
Outcomes Based on Discrepancy Findings
Absence of Discrepancies During Inspection
When no inconsistencies are identified during the inspection and verification, an order in Form GST MOV-05 will be issued to release the vehicle and goods, allowing transit to resume. This entire process must occur promptly and conclude within three days from the initial inspection order.
Identification of Discrepancies During Inspection
If the officer determines, during inspection and verification, that goods require detention, they are authorized to take these steps: issuing a detention order using Form GST MOV-06, and subsequently issuing a notice for tax and penalty imposition through Form GST MOV-07.
Owner's Response to the Issued Order
Upon receiving a notice for tax and penalty payment, the goods owner has two options: either accept the specified tax and penalty amounts, or dispute them.
Consequences of Non-Payment of Tax and Penalty
Should the stipulated amount remain unpaid, or if the officer suspects tax evasion, a notice proposing the confiscation of both goods and vehicle will be issued. This notice must detail the tax, penalty, and fine payable in place of confiscation, which must be remitted within three months. Before any final order is issued, the taxpayer must be granted an opportunity to be heard.
Issuance of the Conclusive Order
A conclusive order will be issued using Form GST MOV-11, at which point Form GST MOV-09 will be retracted. A summary of these orders will be uploaded to the common portal. In instances of vehicle confiscation, ownership of the vehicle and goods transfers to the Central Government; however, this title can be released upon payment of a fine. For unregistered taxpayers involved in these scenarios, a temporary ID will be generated to facilitate payments.
A summary of the various forms utilized in this process is provided below.
| Form Name | Purpose |
|---|---|
| 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 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 |
As these procedures are relatively new, their full advantages are still being realized. The impact on reducing waiting periods, improving compliance efficiency, and minimizing administrative burden for officers remains to be fully observed. Further information is available here.