Jan 21, 20203 min read

Things you should keep in mind if your goods are assessed in movement!

One of my Clients calls me and asks “sir What I should do when Accessing officer intercepts my goods in transit” He is a Manufacturer of Electronic items and his Goods are available all over Uttar Pradesh and Bihar.

That phone call made me realized the rising concern of manufacturers and traders whose goods keep on traveling from one place to another, What are the compliances they should follow, What is the risk in money, if they don’t follow the compliance and What is the first thing they should do if the accessing officer intercepts their goods in transit!

So let us come to the knowledge part now.

What is the compliance you have to follow when you have to send your goods from one place to another!

The first thing you have to see is whether you have to cover your goods with E way Bill or not.

E Way Bill For that, you have to turn your page to E Way Bill rules.

E way bill is compulsory for inter-state movement of goods except Flank, Yarn, Fabric, Garments for job work.
For Intra state movement of goods, Each state has different rules that are followed, That I will cover in my next article specific for e way bill.
Wef from 21-8-2019 If the Supplier or the Recipient or Transporter or Ecommerce operator or courier has not filled Returns for two consecutive months – Part A of e way bill will not be generated.

Hence your compliances are increased if your goods travel to many places. Unless you are regular in your returns, you won’t be able to send your goods to other places.

The second thing you have to see is if your goods are in movement does not attract E Way bill, then you should cover your goods with either of these :

Tax Invoice/ Bill of supply/ Delivery Challan

If a Registered person(Regular scheme) sells taxable goods – he has to issue tax invoice.
If a Registered person (Regular scheme) sells Exempted goods – he has to issue Bill of supply.
If a Person Registered under the composition scheme sells goods – he has to issue a Bill of supply.
In some cases for the Temporary movement of goods e.g for Job work purpose Delivery challan is to issued by the sender.

Penalty (What is the risk in money if you do not follow these compliances)

Now lets come to the money! What you would be liable to pay if you do not cover your goods in movement with the above-mentioned documents.

As per section 68 of CGST Act 2017 Where any conveyance is intercepted by the proper officer at any place, he may require the person in charge of the said conveyance to produce the documents prescribed under the said sub-section and devices for verification, and the said person shall be liable to produce the documents and devices and also allow the inspection of goods.

Actually the section is talking about Tax Invoice/Bill of Supply/ Delivery Challan or E Way Bill.

And As per Section 129 of CGST Act, 2017 Penalty for non-compliance shall be :

If the Owner of the goods come forward to pay tax and penalty 100 % of tax payable on such goods if they are taxable goods and in case of exempted goods penalty shall be equal to 2% of the value of goods or 25000 whichever is less.
If the Owner of the goods do not come forward to pay tax and penalty 50% of the value of goods reduced by tax amount paid thereon in case of taxable goods and in case of exempted goods penalty shall be equal to 5% of the value of goods or 25000 whichever is less.