How to deal with and prevent the seizure of goods
under E-Way Bill?

The e-way bill needs to be carried for all inter-state transport of goods valued above Rs 50,000. But, what happens otherwise? Seizure or detainment of goods is not the only alarming consequence. It has got a lot more to do. Here’s what you might not have thought off, but you need to know:

For the transportation of goods, it is mandatory to generate the E-way bill before the commencement of movement, otherwise the consequences can result in both monetary and non-monetary losses to the taxpayer.

Monetary Losses Detention or Seizure

Without the generation of an e-way bill: -

  • -A penalty of either Rs. 10,000
  • Or the total tax attempted to be avoided (whichever is greater) is to be paid.

Without carrying a valid e-way bill, the vehicle can be seized or detained and can be released only after payment of appropriate taxes and penalties in any of the two ways: -

  • By paying the penalty (given below) or Rs. 25,000 (whichever is lesser), along with the payable tax.
  • By giving a bond and a security in the form of a bank guarantee equivalent to the total payment.
Person paying penalty & tax Goods Type Penalty (% of the payable tax)
Transporter Exempted 5%
Taxable 50%
Owner Exempted 2%
Taxable 100%

There’s a lot riding on the process of seizure/detainment of goods in the e-way bill mechanism. So, let’s get a better understanding of the process: -

Document type Reason for issuance Timeline
MOV – 01 Recording of the statement by the person in charge of conveyance, if he/she fails to provide an e-way bill or other supporting documents  
MOV – 02 Order for conducting a physical inspection of vehicle, goods, or documents Within 24 hours of issuance of this MOV, the concerned officer must prepare a report in Part A of GST EWB – 03 and
upload it to the portal
MOV – 03 Order for extending time for inspection beyond 3 days  
MOV – 04 Final inspection report Must be issued within 72 hours of issuance of MOV – 02, if MOV – 03 is not
MOV – 05 Release order if no discrepancy is observed  
MOV – 06 Detention order if a discrepancy is observed  
MOV – 07 Notice to the taxpayer specifying taxes and penalties  
MOV – 08 Bond provided by the owner to release the goods against security  
MOV – 09 Order of demand for taxes and penalties Goods will be released if owner pays taxes and penalties, and if these are reflected in the electronic liability register
MOV – 10 Notice to the owner regarding confiscation of goods, if taxes and penalties are not paid within 7 days of issuance of MOV – 07  
MOV – 11 Confiscation order for goods or conveyance As per the confiscation order, a period not exceeding 3 months is given for payment, and if still payment is not made, the title of such goods/conveyance will be transferred to the government

If you are an owner or transporter, you should be aware that until MOV – 09, you can avoid the seizure of the vehicle and goods. However, the situation comes to boil, if you do not make proper payments i.e., taxes and penalties within 7 days, as post that you’re prone to seizure and, eventually, auction of your goods by the government. So, it’s time to get conscious and avoid the ulterior pitfalls.