Compiler on Section 129 - Detention, seizure and release of goods & conveyances in transit

129.3.2 If owner does not come forward for payment of penalty

Question No.	Institute	Level	Term	QN	M
Question-1	ICAI	F	N22	5b	4
Repeated	ICAI	F	M19	4b	4
Question-2	ICAI	F	M19-O	5a	5
Repeated	ICSI	P	D22	3a	4

Question-1 [ICAI-F-N22-5(b)-4] [ICAI-F-M19-4(b)-4]

Comet Chem of Ahmedabad handed over goods to transporter Ram Roadways to carry the same from Ahmedabad to Bharuch in Gujarat.

The value of the goods is Rs.80,000 which is chargeable to tax @ 18% GST (9% SGST + 9% CGST) and in transit, proper officer intercepted the vehicle under section 68 of CGST Act and seized the goods.

Calculate the penalty payable under section 129 of CGST Act, 2017 for release of the goods:

− If Comet Chem, owner of goods, comes forward for payment of penalty.

− If Comet Chem, owner of goods, does not come forward for payment of penalty

Answer

When Comet Chem. - owner of goods - comes forward for the payment of penalty, penalty

payable under section 129 of CGST Act is 200% of the tax payable on such goods, i.e.,

Rs.14,400 [200% of (Rs.80,000 × 9%)]. i.e. Rs.14,400

When Comet Chem. - owner of goods - does not come forward for the payment of penalty, penalty payable under section 129 of CGST Act is higher of:

(i) 50% of value of goods, i.e., Rs.40,000 (50% of Rs.80,000) or

(ii) 200% of the tax payable on such goods, i.e., Rs.14,400 [200% of (Rs.80,000 × 9%)].

i.e. Rs.40,000

Question-2 [ICAI-F-M19-O-5(a)-5] [ICSI-P-D22-3(a)-4]

From the following details, calculate the amount to be paid, for release of goods detained or seized under section 129 of the CGST Act, 2017, if owner of the goods does not come forward for payment of applicable tax and penalty Details are as follows:

Particulars	Amount (Rs.)
Value of goods	30,00,000
Applicable GST on such goods	5,40,000
GST already paid on such goods	3,60,000

Would your answer be different if goods were exempted from GST and value remains the same namely Rs.30,00,000?

Answer

(a) If owner of the goods does not come forward for payment of applicable tax and penalty, the amount to be paid for release of goods detained or seized under section 129 of the CGST Act, 2017 is applicable GST and penalty equal to 50%of the value of the goods reduced by the tax amount paid thereon.

Therefore, in the given case, the amount payable = [Rs.5,40,000 + 50% of Rs.30,00,000] – Rs.3,60,000 = Rs.16,80,000

However, in case of exempted goods, amount to be paid for release of goods detained is equal to 5% of the value of goods or Rs.25,000, whichever is less.

= 5% of Rs.30,00,000 or Rs.25,000, whichever is less

= Rs.1,50,000 or Rs.25,000, whichever is less

= Rs.25,000

129.8 Miscellaneous Question & Answer

Question No.	Institute	Level	Term	QN	M
Question-1	ICSI	P	D22	1c	5

Question-1 [ICSI-P-D22-1(c)-5]

Suncity Private Ltd., a manufacturer registered in the state of Rajasthan, sold synthetic cloth to a retail seller in Maharashtra, at a value of Rs.49,000 (excluding IGST leviable @ 5%). Now, it wants to send the consignment of such cloth to the retail seller in Maharashtra.

You are required to advise Suncity Private Ltd. on the following issues with reference to the provisions relating to the electronic way bill (e-way bill) as prescribed under the GST law :

(i) Whether e-way bill is mandatorily required to be generated in respect of such movement of goods ?

(ii) If yes, who is required to generate the e-way bill ?

(iii) What will be the consequences for non-issuance of e-way bill ?

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Compiler on Section 129 - Detention, seizure and release of goods & conveyances in transit