{"id":201,"date":"2019-12-11T12:00:42","date_gmt":"2019-12-11T12:00:42","guid":{"rendered":"https:\/\/www.gstrobo.com\/blog\/?p=201"},"modified":"2023-06-16T10:59:01","modified_gmt":"2023-06-16T10:59:01","slug":"seizure-detention-confiscation-for-goods-in-transit","status":"publish","type":"post","link":"https:\/\/www.gstrobo.com\/blog\/seizure-detention-confiscation-for-goods-in-transit\/","title":{"rendered":"Seizure, Detention &#038; Confiscation &#8211; For Goods in Transit"},"content":{"rendered":"\n<h3 class=\"wp-block-heading\">What is goods in transit?<\/h3>\n\n\n\n<p>Goods in transit refer to inventory&nbsp;items&nbsp;and&nbsp;other&nbsp;merchandise&nbsp;that&nbsp;are&nbsp;shipped by a&nbsp;vendor,&nbsp;but&nbsp;have not&nbsp;yet&nbsp;reached to the&nbsp;vendee.<\/p>\n\n\n\n<p><strong>Example<\/strong><\/p>\n\n\n\n<p>Ramesh (seller) sent goods to Suresh (purchaser) but the carriage in which goods were sent broke down. Ramesh recorded them as sales but as good were not received by Suresh he could not record them as purchases. These goods are recorded in accounting books as goods in transit.<\/p>\n\n\n\n<figure class=\"wp-block-embed aligncenter is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio\"><div class=\"wp-block-embed__wrapper\">\n<iframe loading=\"lazy\" title=\"Difference between Detention, Seizure and Confiscation\" width=\"640\" height=\"360\" src=\"https:\/\/www.youtube.com\/embed\/pFQ6dPOeZVc?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe>\n<\/div><\/figure>\n\n\n\n<h4 class=\"wp-block-heading\">A brief explanation of seizure, detention and confiscation<\/h4>\n\n\n\n<p><strong>Seizure<\/strong><\/p>\n\n\n\n<p>Seizure is&nbsp;taking over&nbsp;of&nbsp;possession&nbsp;of&nbsp;the products&nbsp;by the department. A&nbsp;seizure&nbsp;is&nbsp;generated&nbsp;only&nbsp;after&nbsp;inquiry\/examination&nbsp;that&nbsp;the&nbsp;products&nbsp;are&nbsp;liable&nbsp;to&nbsp;confiscation<\/p>\n\n\n\n<p><strong>Detention<\/strong><\/p>\n\n\n\n<p>Barring right of access to the owner of&nbsp;the products&nbsp;by a court order\/notice&nbsp;is referred to as&nbsp;detention.&nbsp;Even after detention&nbsp;the&nbsp;possession&nbsp;of products&nbsp;remains with the owner. Detention shall be given&nbsp;once&nbsp;it is&nbsp;suspected&nbsp;that&nbsp;the products&nbsp;are&nbsp;prone to&nbsp;seizure.<\/p>\n\n\n\n<p><strong>Confiscation<\/strong><\/p>\n\n\n\n<p>Product&nbsp;confiscation&nbsp;is&nbsp;the&nbsp;ultimate&nbsp;act&nbsp;post&nbsp;complete&nbsp;evaluation.&nbsp;After&nbsp;confiscation,&nbsp;title,&nbsp;in&nbsp;addition&nbsp;to&nbsp;possession,&nbsp;passes&nbsp;out&nbsp;of&nbsp;the&nbsp;original&nbsp;owner&#8217;s&nbsp;hands&nbsp;and&nbsp;into&nbsp;the&nbsp;hands&nbsp;of&nbsp;the&nbsp;Govt&nbsp;Authority.<\/p>\n\n\n\n<p>In every tax administration the provisions for&nbsp;review, Search, Seizure and Arrest are provided&nbsp;to shield&nbsp;the interest of real taxpayers (as the Tax evaders, by evading the tax, get&nbsp;associate degree&nbsp;unfair advantage over&nbsp;the real&nbsp;taxpayers) and as a deterrent for evasion.<\/p>\n\n\n\n<p>These provisions are also needed to safeguard the Government\u2019s legitimate dues. Thus, these provisions act as a deterrent and by checking evasion give tier playing field to real taxpayers.<\/p>\n\n\n\n<p>It should&nbsp;be mentioned that&nbsp;the methods&nbsp;of examination, Search, Seizure, and Arrest are exercised,&nbsp;only&nbsp;in exceptional circumstances and as a lender of last resort,&nbsp;to protect&nbsp;the government&nbsp;Revenue.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">REASONS FOR INSPECTION<\/h4>\n\n\n\n<p>(a) Non-disclosure of any transaction relating to the supply of goods or services or stock in hand.<br>\n(b) Claimed input tax credit more than that should have been claimed.<br>\n(c) Contravention of any provisions of the Act or the Rules to evade tax.<br>\n(d) Transport or storage of goods which escaped payment of tax or manipulating accounts or stocks which may cause evasion of tax.<\/p>\n\n\n\n<p><strong>Seizure can be done only after proper inspection.<\/strong><\/p>\n\n\n\n<h4 class=\"wp-block-heading\">PROCEDURE FOLLOWED  FOR SEIZURE&nbsp;OF PRODUCTS&nbsp;IN TRANSIT<\/h4>\n\n\n\n<p>Goods&nbsp;in&nbsp;transit&nbsp;shall&nbsp;be&nbsp;detained&nbsp;or&nbsp;confiscated&nbsp;only&nbsp;after&nbsp;the&nbsp;person&nbsp;carrying&nbsp;the&nbsp;goods&nbsp;has&nbsp;been&nbsp;notified&nbsp;of such detention.<\/p>\n\n\n\n<p>Upon&nbsp;detention,&nbsp;the&nbsp;tax&nbsp;officer&nbsp;shall&nbsp;issue&nbsp;a&nbsp;tax&nbsp;collectible&nbsp;notice&nbsp;and&nbsp;pass&nbsp;a&nbsp;tax&nbsp;and&nbsp;penalty&nbsp;payment&nbsp;order.<\/p>\n\n\n\n<p>All&nbsp;liabilities&nbsp;under&nbsp;detention&nbsp;will&nbsp;be&nbsp;released&nbsp;upon&nbsp;payment&nbsp;of the&nbsp;tax&nbsp;and&nbsp;penalty.<\/p>\n\n\n\n<p>If the owner&nbsp;doesn&#8217;t&nbsp;pay&nbsp;within&nbsp;seven&nbsp;days, then&nbsp;the products&nbsp;are going to be&nbsp;confiscated. The time&nbsp;of seven&nbsp;days&nbsp;are going to be&nbsp;reduced&nbsp;in case&nbsp;of&nbsp;decayable&nbsp;or&nbsp;hazardous&nbsp;goods.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Penal provisions for seized goods<\/h4>\n\n\n\n<p>The&nbsp;items,&nbsp;related&nbsp;papers,&nbsp;and&nbsp;the&nbsp;vehicle&nbsp;carrying&nbsp;them&nbsp;will&nbsp;be&nbsp;confiscated&nbsp;when&nbsp;anyone&nbsp;transports&nbsp;any&nbsp;goods&nbsp;in&nbsp;contravention&nbsp;of&nbsp;the GST&nbsp;Act.<\/p>\n\n\n\n<p>The products&nbsp;will be&nbsp;discharged&nbsp;solely&nbsp;on payment of required tax and after exercise of all penal provisions. There&nbsp;can be&nbsp;2&nbsp;scenarios&nbsp;during this&nbsp;case:-<\/p>\n\n\n\n<p>If the owner of&nbsp;the products&nbsp;comes forward \u2014&nbsp;during this&nbsp;case, 100%&nbsp;penalty (equal to&nbsp;the number&nbsp;of tax)&nbsp;are&nbsp;charged.<\/p>\n\n\n\n<p>If the owner&nbsp;doesn&#8217;t&nbsp;step forward&nbsp;\u2014&nbsp;payment of applicable tax and penalty equal to the 50% of the value of goods reduced by the tax amount paid thereon will be charged.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Confiscation&nbsp;under&nbsp;GST<\/h4>\n\n\n\n<p><em><strong>All goods and transportation are seized if someone:\u2013<\/strong><\/em><\/p>\n\n\n\n<p>\u2022 Supplies \/ receives an item in breach of GST provisions with a motive to skip tax.<br>\n\u2022 The existence of the confiscated material can not be taken into account.<br>\n\u2022 Supplies any commodity without registration (even if it is responsible for registration).<br>\n\u2022 Violates tax evasion laws<br>\n\u2022 Uses any conveyance\/vehicle to carry the item in violation of GST.<\/p>\n\n\n\n<p>The onus of proof is on the owner, if I proves that the vehicle was used without his complete knowledge vehicle will not be confiscated.<\/p>\n\n\n\n<p>In each of the above situations, the penalty would apply.<\/p>\n\n\n\n<p>Before confiscation&nbsp;of the products, the tax officer must&nbsp;provide&nbsp;an&nbsp;option&nbsp;of paying a fine&nbsp;rather than&nbsp;confiscation.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Fine in&nbsp;lieu&nbsp;of&nbsp;confiscation<\/h4>\n\n\n\n<p>The minimum fine&nbsp;are&nbsp;is 100 percent&nbsp;tax if the owner comes forward and&nbsp;50%&nbsp;of&nbsp;the worth&nbsp;of products&nbsp;before tax if the owner&nbsp;doesn&#8217;t&nbsp;step up.<\/p>\n\n\n\n<p>The maximum fine is the market price of items before tax.<\/p>\n\n\n\n<p>Fine in the process of confiscation shall not release the other relevant penalties. If one&nbsp;pays&nbsp;fine in the process of confiscation, specific taxes, fees, fines may still be due.<\/p>\n\n\n\n<p>Order to confiscate goods or to move or impose penalties shall not be given without allowing the individual the opportunity to be heard<\/p>\n\n\n\n<p>When seized, the goods shall become the property of the Govt. After the products are sold, three months will be granted to pay the confiscation fine.<\/p>\n\n\n\n<p>Confiscation&nbsp;will&nbsp;not&nbsp;impact&nbsp;other&nbsp;GST&nbsp;penalties,&nbsp;i.e.&nbsp;all&nbsp;penalties&nbsp;and&nbsp;proceedings&nbsp;may&nbsp;still&nbsp;apply.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>What is goods in transit? Goods in transit refer to inventory&nbsp;items&nbsp;and&nbsp;other&nbsp;merchandise&nbsp;that&nbsp;are&nbsp;shipped by a&nbsp;vendor,&nbsp;but&nbsp;have not&nbsp;yet&nbsp;reached to the&nbsp;vendee. Example Ramesh (seller) sent goods to Suresh (purchaser) but the carriage in which goods were sent broke down. Ramesh recorded them as sales but as good were not received by Suresh he could not record them as purchases. These &hellip; <\/p>\n","protected":false},"author":1,"featured_media":202,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"ub_ctt_via":"","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[68],"tags":[47,46,45],"class_list":["post-201","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-gst","tag-confiscation","tag-detention","tag-seizure"],"aioseo_notices":[],"featured_image_src":"https:\/\/www.gstrobo.com\/blog\/wp-content\/uploads\/2019\/12\/Seizure-Detention-Confiscation-For-Goods-in-Transit.jpg","author_info":{"display_name":"GSTrobo","author_link":"https:\/\/www.gstrobo.com\/blog\/author\/gstblog\/"},"_links":{"self":[{"href":"https:\/\/www.gstrobo.com\/blog\/wp-json\/wp\/v2\/posts\/201","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.gstrobo.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.gstrobo.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.gstrobo.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.gstrobo.com\/blog\/wp-json\/wp\/v2\/comments?post=201"}],"version-history":[{"count":9,"href":"https:\/\/www.gstrobo.com\/blog\/wp-json\/wp\/v2\/posts\/201\/revisions"}],"predecessor-version":[{"id":2022,"href":"https:\/\/www.gstrobo.com\/blog\/wp-json\/wp\/v2\/posts\/201\/revisions\/2022"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.gstrobo.com\/blog\/wp-json\/wp\/v2\/media\/202"}],"wp:attachment":[{"href":"https:\/\/www.gstrobo.com\/blog\/wp-json\/wp\/v2\/media?parent=201"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.gstrobo.com\/blog\/wp-json\/wp\/v2\/categories?post=201"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.gstrobo.com\/blog\/wp-json\/wp\/v2\/tags?post=201"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}