What to Do If Goods are Seized / Detained in GST under Section 129

Picture this: your truck, loaded with goods, is stopped at a checkpoint. The GST officer asks for documents. Maybe there’s a missing e-way bill, or a minor mismatch in the invoice. Suddenly, your goods and vehicle are detained. For many dealers, this isn’t just a bureaucratic hiccup—it’s a direct hit to business continuity, cash flow, and reputation.

Why does this happen?
Under the GST regime, the movement of goods is tightly regulated. Every consignment above a certain value must be accompanied by a valid tax invoice and an e-way bill. These rules are designed to curb tax evasion, but even a small slip—like a typo in the vehicle number—can trigger enforcement action.

Section 129 of the CGST Act, 2017, is the legal backbone for such detentions. It empowers officers to stop, inspect, and, if necessary, detain goods and vehicles suspected of violating GST rules. The process is formal, multi-staged, and can escalate quickly if not handled with care.

This article is your practical, stepwise guide to what happens when goods are detained under Section 129, how to respond, and how to minimize business disruption. We’ll break down the legal jargon, walk you through the forms and timelines, and arm you with strategies to protect your interests.

Understanding Detention, Seizure, and Confiscation: Know the Difference

Before diving into the process, let’s clarify the three key terms that often get mixed up:

• Detention: A temporary hold on goods and the vehicle, usually at the spot of interception, pending verification of documents or suspicion of a GST violation. The goods remain in your legal ownership, but you can’t move them until the officer gives the green light.
• Seizure: A more serious step, where the officer takes legal control of the goods/vehicle, often as evidence in a suspected tax evasion case. Seizure is less common in routine transit checks.
• Confiscation: The final, most severe action. If violations are proven and penalties aren’t paid, the government can permanently take ownership of the goods and vehicle. This is governed by Section 130, not Section 129.

Why does this distinction matter?
Because your rights, options, and risks change at each stage. Detention is a warning shot; confiscation is the point of no return.

Why Are Goods Detained? Common Triggers Under Section 129

GST officers don’t detain goods at random. Here are the most frequent reasons:

• Missing or expired e-way bill: The most common trigger. If the e-way bill is not generated, expired, or doesn’t match the goods, expect trouble.
• Mismatched or incomplete invoices: Details on the invoice (like HSN code, quantity, or value) don’t tally with the goods or e-way bill.
• No proper documents: Absence of tax invoice, e-way bill, or vehicle/driver documents.
• Suspected undervaluation or evasion: If the officer believes the value is under-reported or there’s intent to evade tax.
• Technical errors: Even minor mistakes—like a wrong pin code or a typo in the vehicle number—can lead to detention, though recent circulars aim to treat these more leniently.

Section 129 vs. Section 130: Temporary vs. Permanent
Section 129 is about temporary detention and release upon payment of penalty or security. Section 130 is invoked for willful evasion or non-payment, leading to confiscation.

The Dealer’s Survival Kit: Must-Have Transit Documents

To avoid detention, every consignment should be armed with:

• Tax Invoice: Must match the goods in quantity, value, and description.
• E-way Bill: Mandatory for most goods above the threshold value. Ensure it’s valid and matches the invoice.
• Vehicle Registration Certificate (RC)
• Driver’s License
• Any other relevant permits or documents

A simple checklist before dispatch can save hours—or days—of hassle at a checkpoint. For more on managing compliances effectively, consider our outsourcing services.

What to Do When Detention Happens

If your goods are detained, panic is your enemy. Here’s how to respond:

1. Stay Calm and Cooperative
   Don’t argue or obstruct the officer. Cooperation can set the tone for a smoother process.

2. Collect Key Details

• Name and designation of the officer
• Reason for detention (ask for specifics)
• Location and time of interception

1. Verify Officer’s Authority
   Officers must carry proper identification and authorization. Politely ask to see their credentials and note them down.

2. Document Everything
   Take photos of the goods, vehicle, and any documents exchanged. These can be crucial if you need to challenge the detention later.

In case you need professional help afterwards, our GST litigation services can assist you in handling disputes efficiently.

The Paper Trail Begins: Initiation with FORM GST MOV-01

The first official step is the recording of a statement in FORM GST MOV-01. Here’s what you need to know:

• The officer will ask the person in charge (usually the driver) to explain the movement and produce documents.
• The officer records this statement, noting any discrepancies or missing documents.
• This form is your first official record—request a copy for your files.

Why does MOV-01 matter?
It sets the foundation for the entire process. Any explanation or evidence you provide here can influence the officer’s next steps.

For those keen to understand the compliance aspects of GST return filing associated with such transactions, our GST return filing services offer detailed assistance.

The Detention & Release Process: Step-by-Step Through the GST Maze

Once the initial statement (MOV-01) is recorded, the process unfolds through a series of statutory forms and actions. Understanding this sequence is your best defense against confusion and delay.

A. The MOV Forms: Your Roadmap

Here’s a quick reference to the key forms and their purpose:

Step	Form Number	What Happens at This Stage?
1	MOV-01	Officer records statement of driver/person in charge
2	MOV-02, EWB-03 (A)	Order for physical verification/inspection; report uploaded
3	MOV-03	Extension of inspection period, if needed
4	MOV-04, EWB-03 (B)	Post-inspection report; outcome recorded
5	MOV-05	Release order if no discrepancies found
6	MOV-06, MOV-07	Detention order and notice specifying tax/penalty
7	MOV-08	Bond/security for provisional release
8	MOV-09	Final penalty and speaking order
9	MOV-10, MOV-11	Confiscation notice and order (if penalty unpaid/escalated)

B. Chronology of Events: What to Expect, What to Do

1. MOV-01: Initial Statement

• Officer records the driver’s statement and checks documents.
• Dealer’s right: Provide explanations, clarify any errors, and request a copy of the form.
  (For detailed insights on your rights, see right to personal hearing in adverse order under GST).

2. MOV-02 & EWB-03 (Part A): Inspection Order

• Officer issues a written order for physical verification.
• Vehicle must be stationed as directed.
• Inspection report (EWB-03 Part A) is uploaded within 24 hours.
  (Learn more about HSN code compliance and e-way bill advisory).

3. MOV-03: Extension, If Needed

• Inspection should conclude within 3 working days.
• If more time is needed, officer must get written permission (MOV-03) and serve a copy to you.

4. MOV-04 & EWB-03 (Part B): Post-Inspection Report

• Officer prepares a report after inspection.
• If no discrepancies, the process ends here.

5. MOV-05: Release Order

• If everything is in order, officer issues MOV-05 and releases goods/vehicle.
• Dealer’s duty: Collect the order, update your records, and resume transport.

6. MOV-06 & MOV-07: Detention and Penalty Notice

• If discrepancies are found, officer issues MOV-06 (detention order) and MOV-07 (notice specifying tax/penalty).
• Dealer’s options:
• Accept and pay the penalty.
• Dispute the findings by submitting an explanation and evidence.
  (For GST penalty disputes and resolution, consider expert help from GST litigation services).

7. MOV-08: Provisional Release (Rule 140)

• If you need the goods/vehicle urgently, apply for provisional release.
• Submit a bond (MOV-08) and a bank guarantee or security equal to the tax and penalty.
• Officer may release goods/vehicle pending final decision.
  (For application assistance, see our GST return filing services).

8. MOV-09: Final Penalty and Speaking Order

• Officer considers your objections (if any) and passes a final order (MOV-09) quantifying tax and penalty.
• Upon payment, goods/vehicle are released (if not already done provisionally).

9. MOV-10 & MOV-11: Confiscation Proceedings

• If penalty is not paid within 15 days, or if evasion is suspected, officer issues MOV-10 (confiscation notice).
• After hearing, MOV-11 (confiscation order) is passed, and ownership of goods/vehicle transfers to the government unless dues are paid within 3 months.
  (Understand more about assessment and appeals under GST).

C. Rights and Duties at Each Stage

• Always request copies of all forms and orders.
• Respond promptly to notices (MOV-06/MOV-07) with explanations and supporting documents.
• Attend hearings if called—your right to be heard is protected by law.
• Keep records of all communication and payments for future reference or appeals.
  (Know more on GST consultancy services).

D. Timelines and Practical Delays

• Inspection: 3 working days (extendable with written permission).
• Notice for penalty: Must be issued within 7 days of detention.
• Order for payment: Within 7 days of notice.
• Payment window: 15 days from order, after which confiscation may begin.

Delays can occur, but officers are required to stick to these statutory timelines. If you face unreasonable delay, you can escalate the matter to higher authorities or seek legal remedy.
(See related guidance on appeal procedure for cancellation of GST registration).

Penalties Under Section 129: How Much Will It Cost?

The penalty depends on who comes forward and the nature of goods:

• If owner comes forward:

  • Penalty = 200% of the tax payable on the goods.

  • For exempted goods: 2% of value or Rs.25,000 (whichever is less).

• If owner does not come forward:

  • Penalty = 50% of value of goods reduced by tax paid or 200% of taxable payable whichever is higher

  • For exempted goods: 5% of value or Rs.25,000 (whichever is less) for exempted goods.

Payment Process:

• Pay via GST portal using the prescribed challan.
• Obtain proof of payment and ensure the demand is reflected in your electronic liability register.
• Only after payment (or furnishing security for provisional release) will the goods/vehicle be released.
  (To understand more, visit our GST refund services).

What if you don’t pay?

• The officer can initiate confiscation proceedings.
• Goods/vehicle may be sold to recover dues.
• For perishable/hazardous goods, the 15-day window may be shortened.
  (Learn about balancing act CBIC guidelines for tax evasion investigations).

Provisional Release: Keeping Your Business Moving

What is Provisional Release?
It’s a lifeline for businesses that can’t afford to have goods or vehicles stuck for weeks. Under Rule 140, you can get your goods/vehicle released by:

• Submitting a bond (MOV-08) for the value of goods plus tax and penalty.
• Providing a bank guarantee or security for the tax and penalty amount.

How to Apply:

1. Fill out MOV-08 (bond) and arrange the required security.
2. Submit to the detaining officer.
3. Officer verifies and, if satisfied, issues MOV-05 for release.

Can you use the goods/vehicle after provisional release?
Yes, but you must comply with all follow-up notices and be prepared for the final order (MOV-09). If you lose the case, the security will be adjusted against the dues.

Risks:

• If you fail to pay the final penalty, the security may be forfeited.
• Non-compliance can escalate to confiscation.
  (Read our blog about the introduction to GST relief measures in India).

Challenging Detention, Penalty, or Process: When and How to Push Back

Not every detention is justified. Sometimes, the error is minor or the officer’s interpretation is debatable. Here’s how to assert your rights:

A. Objecting to Detention or Penalty

• Grounds for Objection:
• Valid documents were present but overlooked.
• The error is minor (e.g., spelling, pin code, minor HSN/vehicle number error).
• No intent to evade tax; all taxes paid.
• How to Respond:
• Draft a clear, factual reply to the MOV-06/MOV-07 notice.
• Attach supporting evidence: invoices, e-way bill, correspondence, photos.
• Request a personal hearing if you want to present your case directly (see right to personal hearing in adverse order under GST).

B. Appeal Measures and Writ Petitions

• Administrative Appeal:
• If dissatisfied with the final order (MOV-09), you can appeal to the appellate authority.
• Be prepared for a pre-deposit: 25% of the penalty (as per recent amendments).
• Writ Petition:
• For gross injustice or violation of natural justice, approach the High Court.
• Courts have often quashed detentions for minor errors or procedural lapses.
• Risks:
• Appeals and writs can be time-consuming and costly.
• Consider the value of goods, urgency, and business impact before proceeding.

Special Cases: Minor Mistakes and Reduced Penalties

GST law recognizes that not all errors are equal. For certain “minor mistakes,” detention is not warranted—only a nominal penalty applies.

A. What Qualifies as a Minor Mistake?

As per GST Circulars (e.g., 64/38/2018-GST):

• Spelling errors in consignor/consignee name (GSTIN correct)
• Pin code error (address otherwise correct, no impact on e-way bill validity)
• Minor errors in address or document numbers
• HSN code error at 4/6 digit level (first 2 digits and tax rate correct)
• One or two character errors in vehicle number

B. Penalty for Minor Errors

• INR 500 each under CGST and SGST (total ?1,000)
• INR 1,000 under IGST
  (No detention, just a small fine. Officer must record and report such cases weekly.)

C. Supporting Your Case

• Maintain clear, organized records of all documents.
• Highlight the minor nature of the error in your response.
• Reference the relevant GST circular in your reply.

From Detention to Confiscation: When Things Escalate

If the penalty is not paid within 15 days (or less for perishable goods), or if the officer suspects willful evasion, the process moves from Section 129 (detention) to Section 130 (confiscation).

A. Confiscation Proceedings

• MOV-10: Notice proposing confiscation, specifying tax, penalty, and fine.
• MOV-11: Final order of confiscation after hearing.
• Ownership of goods/vehicle transfers to the government unless all dues are paid within 3 months.

B. Remedies After Confiscation

• You can still reclaim goods/vehicle by paying tax, penalty, and fine within the allowed period.
• After 3 months, the right to reclaim lapses.

Legal Safeguards, Updates & Compliance Tips

A. Right to Hearing and Fairness

• Law mandates a hearing before any penalty or confiscation order.
• Officers must follow due process—any deviation can be challenged.

B. Recent Legal Updates

• Budget 2024: Proposes to ease some restrictions and clarify blocked credit rules (awaiting notification) (India Budget 2024).
• Finance Act, 2021: Raised penalties (now up to 200% of tax).
• Court Rulings: Minor mistakes should not result in detention—only nominal fines.

C. Pre-Deposit for Appeals

• Now 25% of penalty (up from 10%)—factor this into your dispute strategy (clarity in GST pre-deposit from electronic credit ledger (ECL)).

D. Compliance Best Practices

• Document Checklist:
• Valid invoice, e-way bill, vehicle RC, driver’s license, MOV-08 (if provisional release), bank guarantee.
• Transport Planning:
• Double-check documents before dispatch.
• Train drivers to handle GST checks calmly and keep all papers handy (outsourcing services for training and compliance).
• Recordkeeping:
• Retain all forms, orders, and payment proofs for future audits or disputes (GST audit services).

After Release: Closing the Loop and Preventing Future Issues

A. Post-Release Checklist

• Update your electronic liability register after payment.
• Collect all original forms and orders (MOV-05, MOV-09, etc.).
• Resume transport only after formal release.

B. Follow-Up on Securities

• If you provided a bank guarantee or security for provisional release, apply for its return once the case is closed.
• Keep correspondence and closure orders for your records.

C. Ensuring Case Closure

• Confirm that all proceedings are marked as concluded in the GST portal.
• Retain documentation for at least the statutory period (usually 6 years).

The Dealer’s Decision Matrix: Liquid Strategies Under Section 129

• Pay and move on: Fastest, but costly if penalty is high.
• Dispute and defend: Use for minor errors or unjustified detentions.
• Provisional release: Keeps business running while you contest the case.
• Appeal or writ: For high-value goods or principle-based disputes.

Compliance is always cheaper than crisis management.
A single missing document can cost lakhs in penalties, lost time, and legal fees. Vigilance, training, and robust documentation are your best insurance.

Stay alert to legal updates, train your team, and treat every consignment as an audit in motion.
GST enforcement is evolving, but a prepared dealer is always a step ahead (GST consultancy services).

Quick-Reference: Detention-to-Release Checklist

• [ ] Valid invoice and e-way bill
• [ ] Vehicle RC and driver’s license
• [ ] MOV-01 to MOV-11 forms (as applicable)
• [ ] Payment proofs or bank guarantee (if provisional release)
• [ ] Copies of all orders and correspondence
• [ ] Record of officer’s credentials and inspection details

With the right knowledge and preparation, GST detentions become manageable hurdles—not business disasters. Stay compliant, stay informed, and keep your goods moving.