Section 129 of CGST Act, 2017 : Section 129: Detention, Seizure And Release Of Goods And Conveyances In Transit

Explanation using Example

Imagine a scenario where a truck is transporting a consignment of electronic goods from one state to another in India. During a routine check, the transport authorities stop the truck and find that the driver does not have the proper invoices or tax documents required under the GST law. This is a contravention of the GST Act and rules.

The authorities then detain the truck along with the electronic goods. As per Section 129 of the Central Goods and Services Tax Act, 2017, the owner of the goods has the following options:

• If the owner comes forward, they can get the truck and goods released by paying the applicable tax and a penalty equal to 100% of the tax payable on the goods. If the goods were exempt from tax, the owner would pay 2% of the goods' value or twenty-five thousand rupees, whichever is less.
• If the owner does not come forward, the goods can still be released after paying the applicable tax and a penalty equal to 50% of the goods' value minus the tax amount already paid. For exempt goods, the penalty would be 5% of the value or twenty-five thousand rupees, whichever is less.
• The owner could also choose to furnish a security equivalent to the amount payable under the above options, following the prescribed manner.

The transport authorities will issue a notice to the owner specifying the tax and penalty due. They will also provide the owner with an opportunity to be heard before determining the final amount of tax, interest, or penalty.

If the owner pays the amount specified in the notice, all proceedings regarding the detention are concluded. However, if the owner fails to pay within fourteen days, further proceedings will be initiated under section 130, which could involve confiscation of the goods.