Confiscation of Goods or Conveyance under GST
CA. L. Venkataramanan
Provisions relating to the Confiscation are provided under section 130 of the CGST Act 2017. The Learned Author, in this write up, tries to explain the most critical points to be noted when the goods are confiscated for tax evasion.
Confiscation of goods is constitutional rights of the Government to reduce the tax evasion. In GST, all movements of goods is electronically recorded and Electronic invoicing reduce the unaccounted movement goods and reduce tax evasion. But in the case of services, there is no electronic recording of transactions and such transactions can be tracked only when the consideration is received through electronic channel. Further the detention, seizure and confiscation is not possible as it is intangible and can be identified only when realization is through electronic channel.
'Confiscation' means the goods become property of Government and Government can deal with it, as it wants(sale). Contravening goods are liable to confiscation. Conveyance involved in transit of such goods is also liable to confiscation. Goods confiscated by Government can be taken back on payment of redemption fine. Further confiscation of goods/conveyance is permissible, only if the contravention of the provisions results in evasion of taxes or there lies an intent to evade the payment of tax. Confiscation of property is a power incidental and ancillary to levy of taxes and its Constitutional validity is confirmed in the case of Kalangi Krishnamurthy and Co v. Commercial Tax Officer Guntur 1968 22 STC 540(AP)
3. Situations in which the goods and conveyance are Confiscated (Section 130)
As per section 130 of the Act the where any person:-