Page 13 - Chap21 Offences & Penalties

05. Sec 130- Confiscation of goods or conveyance and levy of penalty

CCP 21.05.12.00
What are the circumstances under which the goods or conveyances could be confiscated?
Answer : As per section 130 of CGST Act, following are the circumstances under which goods or
conveyance could be confiscated by the proper officer:-

(i) Where a person supplies or receives any goods in contravention of any of the provisions of the Act or
rules with intent to evade payment of tax,
(ii) Where a person does not account for any goods on which he is liable to pay GST,
(iii) Where a person supplies any goods which are liable to tax without having applied for registration,

(iv) Where a person contravenes any of the provisions of the Act or rules with intent to evade payment
of tax or
(v) Where a person uses any conveyance as a means of transport for carriage of goods in contravention
of the provisions of the Act or rules 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.

CCP 21.05.13.00

Who shall have the title of goods or conveyance confiscated and how should the proper officer
handle the goods or conveyance confiscated?
Answer :
Ü As per section 130 of CGST Act, the title of goods or conveyance which are confiscated shall vest in
the Government.

Ü The proper officer adjudging confiscation shall take and hold possession of the things confiscated
and every officer of Police shall assist him in the same on the requisition of such proper officer.
Ü After satisfying himself that the confiscated goods or conveyance are not required in any other
proceedings under the CGST Act and after giving reasonable time not exceeding 3 months to pay fine

in lieu of confiscation, the proper officer may dispose such goods or conveyances and deposit the
sale proceeds thereof with the Government.

CCP 21.05.14.00

Neurological Systems Private Limited has been subject to confiscation of goods on the ground
that it has not accounted for the goods that are liable to tax under the CGST Act, 2017. The
directors would like to know from you as to how such goods are to be released from the

Department. You are required to advise the directors regarding the provisions of law on this
matter. [CA Final Nov 19 Exam New]
Answer : As per section 130(2) of CGST Act, in order to get the confiscated goods released from
Department, the directors of Neurological Systems Private Limited are advised as under:-
Ü It shall get an option to pay redemption fine in lieu of confiscation.

Ü Such fine should be less than or equal to [Market value of the goods confiscated – Tax chargeable thereon].
Ü Aggregate of such fine and penalty leviable shall not be less than the penalty equal to 100% of the tax
payable on such goods.
Ü Thus, Neurological Systems Private Limited can get its confiscated goods released on payment of

such redemption fine and penalty.

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