E-WAY BILL

New Rule 138

CA Arun Chhajer
 Rule 138 – E Way Bill

Sub Rule (1) - Every registered person who CAUSES MOVEMENT of goods of consignment value exceeding
fifty thousand (>Rs 50K) —
(i) in relation to a supply; or
(ii) for reasons other than supply; or
(iii) due to inward supply from an unregistered person,

shall, BEFORE COMMENCEMENT of such movement, furnish information relating to the said goods as
specified in Part A of FORM GST EWB-01, electronically, on the common portal along with such other
information as may be required on the common portal and a unique number will be generated on the said
portal

Provided that the transporter, on an authorization received from the registered person, may furnish
information in Part A of FORM GST EWB-01, electronically, on the common portal along with such other
information as may be required on the common portal and a unique number will be generated on the said
portal:

CA Arun Chhajer
 Rule 138
PROVIDED FURTHER that where the goods to be transported are supplied through an ecommerce operator
or a courier agency, on an authorization received from the consignor, the information in Part A of FORM
GST EWB-01 may be furnished by such e-commerce operator or courier agency and a unique number will
be generated on the said portal:

Situations where E Way Bill mandatory even for <= Rs 50,000

Provided also that where goods are sent by a principal located in one State or Union territory to a job
worker located in any other State or Union territory, the e-way bill shall be generated either by the principal
or the job worker, if registered, irrespective of the value of the consignment:

Provided also that where handicraft goods are transported from one State or Union territory to another
State or Union territory by a person who has been exempted from the requirement of obtaining
registration under clauses (i) and (ii) of section 24, the e-way bill shall be generated by the said person
irrespective of the value of the consignment.

CA Arun Chhajer
 Rule 138

Explanation 1.– For the purposes of this rule, the expression “handicraft goods” has the meaning as
assigned to it in the notification No. 56/2018-Central Tax, dated the 23rd October, 2018

Explanation 2.- For the purposes of this rule, the consignment value of goods shall be the value,
determined in accordance with the provisions of section 15, declared in an invoice, a bill of supply or a
delivery challan, as the case may be, issued in respect of the said consignment and also

 INCLUDES the central tax, State or Union territory tax, integrated tax and cess charged, if any, in the
document and
 EXCLUDE the value of exempt supply of goods where the invoice is issued in respect of both exempt and
taxable supply of goods.

CA Arun Chhajer
 Rule 138

(2) Where the goods are transported by the registered person as a consignor or the recipient of supply as
the consignee, whether in his own conveyance or a hired one or a public conveyance, by road, the said
person shall generate the e-way bill in FORM GST EWB-01 electronically on the common portal after
furnishing information in Part B of FORM GST EWB-01.

Eway Bill after movement but before delivery

(2A) the common portal, the information in Part B of FORM GST where the goods are transported by
railways or by air or vessel, the e-way bill shall be generated by the registered person, being the supplier or
the recipient, who shall, either before or after the commencement of movement, furnish, on EWB-01.

Provided that where the goods are transported by railways, the railways shall not deliver the goods unless
the e-way bill required under these rules is produced at the time of delivery.

CA Arun Chhajer
 Rule 138
(3) Where the e-way bill is not generated under sub-rule (2) and the goods are handed over to a transporter
for transportation by road, the registered person shall furnish the information relating to the transporter on
the common portal and the e-way bill shall be generated by the transporter on the said portal on the basis of
the information furnished by the registered person in Part A of FORM GST EWB-01

Provided that the registered person or, the transporter may, at his option, generate and carry the e-way bill
even if the value of the consignment is less than fifty thousand rupees:

Provided further that where the movement is caused by an unregistered person either in his own conveyance
or a hired one or through a transporter, he or the transporter may, at their option, generate the e-way bill in
FORM GST EWB-01 on the common portal in the manner specified in this rule

Provided also that where the goods are transported for a distance of upto 50 Kms within the State or UT from
the place of business of the consignor to the place of business of the transporter for further transportation,
the supplier or the recipient, or as the case may be, the transporter may not furnish the details of conveyance
in Part B of FORM GST EWB-01.

CA Arun Chhajer
 Rule 138

Explanation 1.– For the purposes of this sub-rule, where the goods are supplied by an unregistered
supplier to a recipient who is registered, the movement shall be said to be caused by such recipient
if the recipient is known at the time of commencement of the movement of goods.

Explanation 2.- The e-way bill shall not be valid for movement of goods by road unless the
information in Part-B of FORM GST EWB-01 has been furnished except in the case of movements
covered under the third proviso to sub-rule (3) and the proviso to sub-rule (5).

CA Arun Chhajer
 Rule 138

(4) Upon generation of the e-way bill on the common portal, a unique e-way bill number (EBN)
shall be made available to the supplier, the recipient and the transporter on the common portal.

(5) Where the goods are transferred from one conveyance to another, the consignor or the
recipient, who has provided information in Part A of the FORM GST EWB-01, or the transporter
shall, before such transfer and further movement of goods, update the details of conveyance in the
e-way bill on the common portal in Part B of FORM GST EWB-01:

Provided that where the goods are transported for a distance of upto 50 Kms within the State or
Union territory from the place of business of the transporter finally to the place of business of the
consignee, the details of the conveyance may not be updated in the eway bill.

CA Arun Chhajer
 Rule 138 (5A)– Assignment of Eway Bill

(5A) The consignor or the recipient, who has furnished the information in Part A of FORM GST EWB-01, or
the transporter, may assign the e-way bill number to another registered or enrolled transporter for updating
the information in Part B of FORM GST EWB-01 for further movement of the consignment:

Provided that after the details of the conveyance have been updated by the transporter in Part B of FORM
GST EWB-01, the consignor or recipient, as the case may be, who has furnished the information in Part A of
FORM GST EWB-01 shall not be allowed to assign the e-way bill number to another transporter.

(6) After e-way bill has been generated in accordance with the provisions of sub-rule (1), where multiple
consignments are intended to be transported in one conveyance, the transporter may indicate the serial
number of e-way bills generated in respect of each such consignment electronically on the common portal
and a consolidated e-way bill in EWB-02 maybe generated by him on the said common portal prior to the
movement of goods.

CA Arun Chhajer
 Rule 138

(7) Where the consignor or the consignee has not generated the e-way bill in FORM GST EWB-01 and the
aggregate of the consignment value of goods carried in the conveyance is more than fifty thousand
rupees (>Rs 50,000), the transporter, except in case of transportation of goods by railways, air and
vessel, shall, in respect of inter-State supply, generate the e-way bill in FORM GST EWB-01 on the basis
of invoice or bill of supply or delivery challan, as the case may be, and may also generate a consolidated
e-way bill in FORM GST EWB-02 on the common portal prior to the movement of goods:

Provided that where the goods to be transported are supplied through an e-commerce operator or a
courier agency, the information in Part A of FORM GST EWB-01 may be furnished by such e-commerce
operator or courier agency.

CA Arun Chhajer
 Rule 138

(8) The information furnished in Part A of FORM GST EWB-01 shall be made available to the registered
supplier on the common portal who may utilize the same for furnishing the details in FORM GSTR-1:

Provided that when the information has been furnished by an unregistered supplier or an
unregistered recipient in FORM GST EWB-01, he shall be informed electronically, if the mobile number
or the e-mail is available.

(9) Where an e-way bill has been generated under this rule, but goods are either not transported or
are not transported as per the details furnished in the e-way bill, the e-way bill may be cancelled
electronically on the common portal within 24 hours of generation of the e-way bill:

Provided that an e-way bill cannot be cancelled if it has been verified in transit in accordance with the
provisions of rule 138B:

Provided further that the unique number generated under sub-rule (1) shall be valid for a period of 15
days for updation of Part B of FORM GST EWB-01.

CA Arun Chhajer
 Rule 138

(10) An e-way bill or a consolidated e-way bill generated under this rule shall be valid for the period as
mentioned in column (3) of the Table below from the relevant date, for the distance, within the country,
the goods have to be transported, as mentioned below

 Validity in case of Other than Over Dimensional Cargo (ODC)

 Validity in case of Over Dimensional Cargo (ODC)

Explanation 2.— For the purposes of this rule, the expression “Over Dimensional Cargo” shall mean a
cargo carried as a SINGLE INDIVISIBLE UNIT and which exceeds the dimensional limits prescribed in rule
93 of the Central Motor Vehicle Rules, 1989, made under the Motor Vehicles Act, 1988 (59 of 1988).

CA Arun Chhajer
 Rule 138

Sr. no Distance Validity Period

Validity in case of Cargo other than Over Dimensional Cargo
One day in cases other than Over Dimensional
1. Upto 200 km Cargo 7[or multimodal shipment in which at least one
leg involves transport by ship]
One additional day in cases other than Over
For every 200 km or part
2. Dimensional Cargo 7[or multimodal shipment in which
thereof thereafter
at least one leg involves transport by ship]
Validity in case of Over Dimensional Cargo (ODC)
1 Upto 20 km One day in case of Over Dimensional Cargo
For every 20 km. or part
2 One additional day in case of Over Dimensional Cargo:
thereof thereafter

CA Arun Chhajer
 Rule 138
Explanation 1.—Period of validity shall be counted from the time at which the e-way bill has been
generated and each day shall be counted as the period expiring at midnight of the day
immediately following the date of generation of e-way bill.
Q– What is the validity if I have generated the bill on 19th Feb and valid for 2 days?

Extension of validity period

 By Commissioner
Provided that the Commissioner may, by notification, extend the validity period of an e-way
bill for certain categories of goods as may be specified therein.
 By Transporter
Provided further that where, under circumstances of an exceptional nature, including trans-
shipment, the goods cannot be transported within the validity period, the transporter may
extend the validity period after updating the details in Part B of EWB-01, if required.

 Extension after Expiry of E Way Bill - Inserted by CGST (4th Amendment) Rules, 2019
dt. 28.06.2019
Provided also that the validity of the e-way bill may be extended within 8 hours from the time
of its expiry. CA Arun Chhajer
 Rule 138

(11) The details of the e-way bill generated under this rule shall be made available to the
(a) supplier, if registered, where the information in Part A of FORM GST EWB-01 has been
furnished by the recipient or the transporter; or
(b) recipient, if registered, where the information in Part A of FORM GST EWB-01 has been
furnished by the supplier or the transporter,
on the common portal, and the supplier or the recipient, as the case may be, shall communicate
his acceptance or rejection of the consignment covered by the e-way bill.

(12) Where the person to whom the information specified in sub-rule (11) has been made
available does not communicate his acceptance or rejection within 72 hours of the details being
made available to him on the common portal, or the time of delivery of goods whichever is earlier,
it shall be deemed that he has accepted the said details.

(13) The e-way bill generated under this rule or under rule 138 of the GST Rules of any State or
Union territory shall be valid in every State and Union territory.

CA Arun Chhajer
 Rule 138

(14) Notwithstanding anything contained in this rule, no e-way bill is required to be generated—
(a) where the goods being transported are specified in Annexure;

CA Arun Chhajer
 Rule 138

• where the goods are being transported by a non-motorised conveyance;

• where the goods are being transported from the customs port, airport, air cargo complex and
land customs station to an inland container depot or a container complex and land customs
station to an inland container depot or a container freight station for clearance by Customs;

• in respect of movement of goods within such areas as are notified under rule 138(14)(d) of
the State or Union territory GST Rules in that particular State or Union territory;

• where the goods, other than de-oiled cake, being transported, are specified in the Schedule
appended to notification No. 2/2017- Central tax (Rate) dated the 28th June, 2017

• where the goods being transported are alcoholic liquor for human consumption, petroleum
crude, high speed diesel, motor spirit(known as petrol), natural gas or aviation turbine fuel;

• where the supply of goods being transported is treated as no supply under Schedule III
CA Arun Chhajer
 Rule 138

• where the goods are being transported-

(i) under customs bond from an inland container depot or a container freight station to a
customs port, airport, air cargo complex and land customs station, or from one customs station
or customs port to another customs station or customs port, or
(ii) under customs supervision or under customs seal;
•where the goods being transported are transit cargo from or to Nepal or Bhutan;
•where the goods being transported are exempt from tax under NN 7/2017-Central Tax (Rate),
dated 28th June 17 and NN 26/2017- Central Tax (Rate), dated the 21st Sep’17
I. NN 7 - The supply of goods by the CSD to the Unit Run Canteens / authorized customers
II. NN-26 - Exempts intra state supply of heavy water and nuclear fuels by the Department of
Atomic Energy to the Nuclear Power Corporation of India Ltd
• any movement of goods caused by defence formation under Ministry of defence as a consigor
or consignee;

CA Arun Chhajer
 Rule 138

•where the consignor of goods is the Central Government, Government of any State or a local
authority for transport of goods by rail;
•where empty cargo containers are being transported; and
•where the goods are being transported upto a distance of 20 kilometers from the place of the
business of the consignor to a weighbridge for weighment or from the weighbridge back to the
place of the business of the said consignor subject to the condition that the movement of goods is
accompanied by a delivery challan issued in accordance with rule 55.

Q.where empty cylinders for packing of liquefied petroleum gas are being moved for reasons other
than supply.]

Explanation. - The facility of generation, cancellation, updation and assignment of e-way bill shall
be made available through SMS to the supplier, recipient and the transporter, as the case may be.

CA Arun Chhajer
 Rule 138A to Rule 138E

Rule 138A : Documents and devices to be carried by a person-in-charge of a conveyance

Rule 138B : Verification of documents and conveyances

Rule 138C : Inspection and verification of goods

Rule 138D : Facility for uploading information regarding detention of vehicle

Rule 138E. Restriction on furnishing of information in PART A of FORM GST EWB-01

CA Arun Chhajer
 Rule 138A
Rule 138A. Documents and devices to be carried by a person-in-charge of a conveyance.-
(1) The person in charge of a conveyance shall carry-
(a) the invoice or bill of supply or delivery challan, as the case may be; and
(b) a copy of the e-way bill in physical form or the e-way bill number in electronic form or mapped to a Radio
Frequency Identification Device embedded on to the conveyance in such manner as may be notified by the
Commissioner:
Provided that nothing contained in clause (b) of this sub-rule shall apply in case of movement of goods by rail
or by air or vessel.
4[Provided further that in case of imported goods, the person in charge of a conveyance shall also carry a

copy of the bill of entry filed by the importer of such goods and shall indicate the number and date of the bill
of entry in Part A of FORM GST EWB-01.]

[(2) In case, invoice is issued in the manner prescribed under sub-rule (4) of rule 48, the Quick Reference
(QR) code having an embedded Invoice Reference Number (IRN) in it, may be produced electronically, for
verification by the proper officer in lieu of the physical copy of such tax invoice.]

CA Arun Chhajer
 Rule 138A
Rule 138A. Documents and devices to be carried by a person-in-charge of a conveyance.-
(1) The person in charge of a conveyance shall carry-
(a) the invoice or bill of supply or delivery challan, as the case may be; and
(b) a copy of the e-way bill in physical form or the e-way bill number in electronic form or mapped to a Radio
Frequency Identification Device embedded on to the conveyance in such manner as may be notified by the
Commissioner:
Provided that nothing contained in clause (b) of this sub-rule shall apply in case of movement of goods by rail
or by air or vessel.
4[Provided further that in case of imported goods, the person in charge of a conveyance shall also carry a

copy of the bill of entry filed by the importer of such goods and shall indicate the number and date of the bill
of entry in Part A of FORM GST EWB-01.]

[(2) In case, invoice is issued in the manner prescribed under sub-rule (4) of rule 48, the Quick Reference
(QR) code having an embedded Invoice Reference Number (IRN) in it, may be produced electronically, for
verification by the proper officer in lieu of the physical copy of such tax invoice.] –Q2 of Circular 160 dated 20th
Sep’21

CA Arun Chhajer
 Circular 160 dated 20th Sep’21
Q - Whether carrying physical copy of invoice is compulsory during movement of goods in cases where suppliers have issued invoices in
the manner prescribed under rule 48 (4) of the CGST Rules, 2017 (i.e. in cases of e-invoice).

Ans Rule 138A (1) of the CGST Rules, 2017 inter-alia, provides that the person in charge of a conveyance shall carry— (a) the invoice or
bill of supply or delivery challan, as the case may be; and (b) a copy of the e-way bill or the e-way bill number, either physically or
mapped to a Radio Frequency Identification Device embedded on to the conveyance in such manner as may be notified by the
Commissioner.

Further, rule 138A (2) of CGST Rules, after being amended vide notification No. 72/2020-Central Tax dated 30.09.2020, states that “In
case, invoice is issued in the manner prescribed under sub-rule (4) of rule 48, the Quick Reference (QR) code having an embedded
Invoice Reference Number (IRN) in it, may be produced electronically, for verification by the proper officer in lieu of the physical copy of
such tax invoice”

A conjoint reading of rules 138A (1) and 138A (2) of CGST Rules, 2017 clearly indicates that there is no requirement to carry the physical
copy of tax invoice in cases where e-invoice has been generated by the supplier. After amendment, the revised rule 138A (2) states in
unambiguous words that whenever einvoice has been generated, the Quick Reference (QR) code, having an embedded Invoice
Reference Number (IRN) in it, may be produced electronically for verification by the proper officer in lieu of the physical copy of such tax
invoice.

Accordingly, it is clarified that there is no need to carry the physical copy of tax invoice in cases where invoice has been generated by the
supplier in the manner prescribed under rule 48(4) of the CGST Rules and production of the Quick Response (QR) code having an
embedded Invoice Reference Number (IRN) electronically, for verification by the proper officer, would suffice

CA Arun Chhajer
 Rule 138A

(3) Where the registered person uploads the invoice under sub-rule (2), the information in Part A of
FORM GST EWB-01 shall be auto-populated by the common portal on the basis of the information furnished
in FORM GST INV-1.

(4) The Commissioner may, by notification, require a class of transporters to obtain a unique Radio
Frequency Identification Device and get the said device embedded on to the conveyance and map the e-way
bill to the Radio Frequency Identification Device prior to the movement of goods.

(5) Notwithstanding anything contained in clause (b) of sub-rule (1), where circumstances so warrant, the
Commissioner may, by notification, require the person-in-charge of the conveyance to carry the following
documents instead of the e-way bill
(a) tax invoice or bill of supply or bill of entry; or
(b) a delivery challan, where the goods are transported for reasons other than by way of supply.]

CA Arun Chhajer
 Rule 138B of CGST Rules – Verification of documents and conveyances
Rule 138B. Verification of documents and conveyances.-
(1) The Commissioner or an officer empowered by him in this behalf may authorize the proper officer to
intercept any conveyance to verify the e-way bill in physical or electronic form for all inter-State and
intra-State movement of goods.

(2) The Commissioner shall get Radio Frequency Identification Device readers installed at places where
the verification of movement of goods is required to be carried out and verification of movement of
vehicles shall be done through such device readers where the eway bill has been mapped with the
said device.

(3) The physical verification of conveyances shall be carried out by the proper officer as authorised by the
Commissioner or an officer empowered by him in this behalf:

Provided that on receipt of specific information on evasion of tax, physical verification of a specific
conveyance can also be carried out by any other officer after obtaining necessary approval of the
Commissioner or an officer authorised by him in this behalf.]

CA Arun Chhajer
 Rule 138C of CGST Rules

Rule 138C. Inspection and verification of goods.-

(1) A summary report of every inspection of goods in transit shall be recorded online by the proper officer
in Part A of FORM GST EWB-03 within twenty four hours of inspection and the final report in Part
B of FORM GST EWB-03 shall be recorded within three days of such inspection.

[Provided that where the circumstances so warrant, the Commissioner, or any other officer authorised by
him, may, on sufficient cause being shown, extend the time for recording of the final report in Part B of
FORM EWB-03, for a further period not exceeding three days.

Explanation.- The period of twenty four hours or, as the case may be, three days shall be counted from the
midnight of the date on which the vehicle was intercepted.]

(2) Where the physical verification of goods being transported on any conveyance has been done during
transit at one place within the State or Union territory or in any other State or Union territory, no further
physical verification of the said conveyance shall be carried out again in the State or Union territory, unless
a specific information relating to evasion of tax is made available subsequently.]

CA Arun Chhajer
 Rule 138D

Facility for uploading information regarding detention of vehicle.-

Where a vehicle has been intercepted and detained for a period exceeding thirty minutes,
the transporter may upload the said information in EWB-04 on the common portal.

2[Explanation. - For the purposes of this Chapter, the expressions ‘transported by railways’,
‘transportation of goods by railways’, ‘transport of goods by rail’ and ‘movement of goods
by rail’ does not include cases where leasing of parcel space by Railways takes place.]

CA Arun Chhajer
 Rule 138E
Rule 138E. Restriction on furnishing of information in PART A of FORM GST EWB-01-
Notwithstanding anything contained in sub-rule (1) of rule 138, no person (including a consignor, consignee,
transporter, an e-commerce operator or a courier agency) shall be allowed to furnish the information in PART
A of FORM GST EWB-01 [in respect of any outward movement of goods of a registered person, who, —

(a) being a person paying tax under section 10, 2[or availing the benefit of notification No.02/2019–Central
Tax (Rate), dated the 7th March, 2019, has not furnished the 3[statement in FORM GST CMP-08] for two
consecutive [quarters]; or
(b) being a person other than a person specified in clause (a), has not furnished the returns for a consecutive
period of 8[two tax periods] two months:

Provided that the Commissioner may, 5[on receipt of an application from a registered person in FORM GST EWB-05,] on
sufficient cause being shown and for reasons to be recorded in writing, by order 5[in FORM GST EWB-06], allow furnishing
of the said information in PART A of FORM GST EWB-01, subject to such conditions and restrictions as may be specified by
him:

Provided further that no order rejecting the request of such person to furnish the information in PART A of FORM GST
EWB-01 under the first proviso shall be passed without affording the said person a reasonable opportunity of being heard:

CA Arun Chhajer
 Rule 138E
Provided also that the permission granted or rejected by the Commissioner of State tax or Commissioner of
Union territory tax shall be deemed to be granted or, as the case may be, rejected by the Commissioner.
Provided also that the said restriction shall not apply during the period from the 20th day of March, 2020 till
the 15th day of October, 2020 in case where the return in FORM GSTR-3B or the statement of outward
supplies in FORM GSTR-1 or the statement in FORM GST CMP-08, as the case may be, has not been furnished
for the period February, 2020 to August, 2020.]

Explanation:– For the purposes of this rule, the expression "Commissioner" shall mean the jurisdictional
Commissioner in respect of the persons specified in clauses (a) and (b).]

(c) being a person other than a person specified in clause (a), has not furnished the statement of outward
supplies for any two months or quarters, as the case may be.]

(d) being a person, whose registration has been suspended under the provisions of sub-rule (1) or subrule (2)
or sub-rule (2A) of rule 21A.

CA Arun Chhajer
Section 68: Inspection of
Goods in Movement
 Section 68 - Inspection of goods in transit
(1) The Government may require the person in charge of a conveyance carrying any consignment
of goods of value exceeding such amount (exceeding Rs. 50,000) as may be specified to carry
with him such documents and such devices as may be prescribed. (i.e. invoice and e-way bill)
(2) The details of documents required to be carried under sub-section (1) shall be validated in
such manner as may be prescribed
(3) Where any conveyance referred to in sub-section (1) 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.

Rule 55: Transportation of Goods without issue of Invoice – Delivery Challan

Rule 55A: Tax Invoice or bill of supply to accompany transport of goods (Inserted w.e.f.
23.01.2018) - The person-incharge of the conveyance shall carry a copy of the tax invoice or the bill
of supply issued in accordance with the provisions of rules 46, 46A or 49 in a case where such
person is not required to carry an e-way bill under these rules.
Case
Study

Mr A is a supplier of goods from Mumbai and sends goods to Mr B in Delhi. E way

bill and invoice was issued. Later on Mr B rejected the goods due to some reason.
Therefore supplier issued credit note and ITC was not claimed by B. the supplier
then sold the same goods to Mr C who is also in Delhi [2 km away from original
recipient B]. A asks B to send the goods to C directly and A issues new invoice to C.
Sir what will be the requirement of eway bill of sale made by Mr A to Mr C?

CA Arun Chhajer
Case
Study

Mr A is a supplier of goods from Mumbai and sends goods to Mr B in Delhi. E way

bill and invoice was issued. However EWAY Bill is expired during transit and goods
have not reached to Mr B. Now how the goods to be moved to Mr B?

CA Arun Chhajer
Sec 129 Sec 130
Section 129. Detention, seizure and release of goods and conveyances in transit.
(1) Notwithstanding anything contained in this Act, where any person transports any goods or stores any goods
while they are in transit in contravention of the provisions of this Act or the rules made thereunder, all such
goods and conveyance used as a means of transport for carrying the said goods and documents relating to
such goods and conveyance shall be liable to detention or seizure and after detention or seizure, shall be
released,––

w.e.f. 1.1.2022
[(a) on payment of penalty equal to two hundred per cent. of the tax payable on such goods and, in case of
exempted goods, on payment of an amount equal to two per cent. of the value of goods or twenty-five
thousand rupees, whichever is less, where the owner of the goods comes forward for payment of such penalty;

Effect:
Before introduction of this amendment, if the owner of goods come forward for payment of tax and penalty
then the owner was required to pay applicable tax along with penalty equivalent to 100% of tax payable,
however, with the introduction of this amendment, now penalty equivalent to 200% of tax will be payable to
release the vehicle in case of seizure and detention. Further, as discussed above, if the assessee wants to prefer
an appeal, then 25% of above penalty has to be paid during first appeal proceedings under Section 107 of the
Act.
CA Arun Chhajer
Section 129. Detention, seizure and release of goods and conveyances in transit.

(b) on payment of penalty equal to fifty per cent. of the value of the goods or two hundred per cent. of the
tax payable on such goods, whichever is higher, and in case of exempted goods, on payment of an amount
equal to five per cent. of the value of goods or twenty-five thousand rupees, whichever is less, where the
owner of the goods does not come forward for payment of such penalty;]

(c) upon furnishing a security equivalent to the amount payable under clause (a) or clause (b) in such form
and manner as may be prescribed:

Provided that no such goods or conveyance shall be detained or seized without serving an order of
detention or seizure on the person transporting the goods.
3[(2) ***]

CA Arun Chhajer
Section 129. Detention, seizure and release of goods and conveyances in transit.
w.e.f. 1.1.2022
[(3) The proper officer detaining or seizing goods or conveyance shall issue a notice within seven days of
such detention or seizure, specifying the penalty payable, and thereafter, pass an order within a period of
seven days from the date of service of such notice, for payment of penalty under clause (a) or clause (b) of
sub-section (1).]

SCN in MOV-07 – Order in MOV-09 –

MOV-06
7 day from MOV-06 7 days from MOV-07

Effect:
Before the introduction of this amendment, there was no time period within which the proper officer was
required to issue notice and pass an order under Section 129(3). However, after substitution of Section
129(3) of the CGST Act, the proper officer is required to issue notice within 7 days of detention, and
thereafter, an order shall also be passed within 7 days from the date of issue of notice.
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Section 129. Detention, seizure and release of goods and conveyances in transit.
(4) 5[No penalty] shall be determined under sub-section (3) without giving the person concerned an
opportunity of being heard.

(5) On payment of amount referred in sub-section (1), all proceedings in respect of the notice specified in
sub-section (3) shall be deemed to be concluded.

w.e.f.1.1.2022
(6) Where the person transporting any goods or the owner of such goods fails to pay the amount of penalty
under sub-section (1) within fifteen days from the date of receipt of the copy of the order passed under sub-
section (3), the goods or conveyance so detained or seized shall be liable to be sold or disposed of
otherwise, in such manner and within such time as may be prescribed, to recover the penalty payable under
sub-section (3):

Effect: Before this amendment, the transporter or owner of such goods was required to pay tax or penalty
withing 14 days of such detention or seizure. However, after the introduction of this amendment, the
transporter or the owner is required to pay the amount of tax or penalty within 15 days from the date of
issue of order.

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Section 129. Detention, seizure and release of goods and conveyances in transit.
Provided that the conveyance shall be released on payment by the transporter of penalty under sub-section (3)
or 1 lakh rupees, whichever is less:

Effect: Before introduction of this amendment, there was no provision under GST law to release only conveyance (except
goods) in case of detention. However, after introduction of this proviso, a relief has been provided to transporter in case of
detention of vehicle. Now, the conveyance can be released on payment by the transporter of penalty under sub-section (3) or
one lakh rupees, whichever is less

Provided further that where the detained or seized goods are perishable or hazardous in nature or are likely to
depreciate in value with passage of time, the said period of fifteen days may be reduced by the proper
officer. [See Rule 142(5)]]

Inspection 14 Days
In EWB-03 Detention from
Confiscation
(Part A + MOV-06 detention if
Part B) TIP Not paid

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Section 130. Confiscation of goods or conveyances and levy of penalty.
(1) Where any person—
(i) supplies or receives any goods in contravention of any of the provisions of this Act or the rules made
thereunder with intent to evade payment of tax; or
(ii) does not account for any goods on which he is liable to pay tax under this Act; or

(iii) supplies any goods liable to tax under this Act without having applied for registration; or

(iv) contravenes any of the provisions of this Act or the rules made thereunder with intent to evade
payment of tax; or

(v) uses any conveyance as a means of transport for carriage of goods in contravention of the provisions of
this Act or the rules made thereunder unless the owner of the conveyance proves that it was so used
without the knowledge or connivance of the owner himself, his agent, if any, and the person in charge
of the conveyance,

then, all such goods or conveyances shall be liable to confiscation and the person shall be liable to penalty
under section 122.

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Section 130. Confiscation of goods or conveyances and levy of penalty.

(2) Whenever confiscation of any goods or conveyance is authorised by this Act, the officer adjudging it shall
give to the owner of the goods an option to pay in lieu of confiscation, such fine as the said officer thinks fit:

Provided that such fine leviable shall not exceed the market value of the goods confiscated, less the tax
chargeable thereon:

Provided further that the aggregate of such fine and penalty leviable shall not be less than the 2[penalty
equal to hundred per cent. of the tax payable on such goods]:

Provided also that where any such conveyance is used for the carriage of the goods or passengers for hire,
the owner of the conveyance shall be given an option to pay in lieu of the confiscation of the conveyance a
fine equal to the tax payable on the goods being transported thereon.
(3) ***]

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Section 130. Confiscation of goods or conveyances and levy of penalty.

(4) No order for confiscation of goods or conveyance or for imposition of penalty shall be issued without
giving the person an opportunity of being heard.

(5) Where any goods or conveyance are confiscated under this Act, the title of such goods or conveyance
shall thereupon vest in the Government.

(6) The proper officer adjudging confiscation shall take and hold possession of the things confiscated and
every officer of Police, on the requisition of such proper officer, shall assist him in taking and holding such
possession.

(7) The proper officer may, after satisfying himself that the confiscated goods or conveyance are not
required in any other proceedings under this Act and after giving reasonable time not exceeding three
months to pay fine in lieu of confiscation, dispose of such goods or conveyance and deposit the sale
proceeds thereof with the Government. [See Rule 142(5)]

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Proceedings under Section 129 & 130 of CGST are no more deemed to be concluded even if the same
proceedings against the taxpayer are concluded under Section 73 and Section 74 of CGST Act.

Section 113 of Finance Act 2021 had made amendment in sub-clause (ii) to Explanation 1 to Section 74 of
CGST Act as per which words and figures “sections 122, 125, 129 and 130”, has been substituted to the
words and figures “sections 122 and 125”. (w.e.f. 1.1.2022)

The new provision after amendment is reproduced below:

where the notice under the same proceedings is issued to the main person liable to pay tax and some other
persons, and such proceedings against the main person have been concluded under section 73 or section
74, the proceedings against all the persons liable to pay penalty under sections 122, and 125 are deemed to
be concluded.

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 Circular No. 64/38/2018-GST dated 14-9-2018

• In case a consignment of goods is accompanied with an invoice or any other specified document and also
an e-way bill, proceedings under section 129 of the CGST Act may NOT be initiated, inter alia, in the
following situations:
a) Spelling mistakes in the name of the consignor or the consignee but the GSTIN, is correct;
b) Error in the pin-code but the address of the consignor and the consignee mentioned is correct, subject
to the condition that the error in the PIN code should not have the effect of increasing the validity
period of the e-way bill;
c) Error in the address of the consignee to the extent that the locality and other details of the consignee
are correct;
d) Error in one or two digits of the document number mentioned in the e-way bill;
e) Error in 4 or 6 digit level of HSN where the first 2 digits of HSN are correct and the rate of tax mentioned
is correct;
f) Error in one or two digits/characters of the vehicle number.

In case of the above situations, penalty to the tune of Rs. 500/- each under section 125 of the CGST Act and the
respective State GST Act should be imposed (Rs.1000/- under the IGST Act) in FORM GST DRC-07 for every
consignment.
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Case Study

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