The Kerala Goods and Services Tax ( GST ) department has issued instructions for the detention of goods during transportation on grounds of undervaluation.
The instructions are issued in the light of the recent Kerala High Court judgment wherein the goods belonging to the petitioner were detained in a parcel godown by the Intelligence Squad on the ground that the value quoted in the invoice that accompanied the goods was low when compared to the Maximum Retail Price (MRP) and that the HSN code of the goods was wrongly entered.
While disposing of the above case, the High Court found that there is no provision under the Goods and Services Tax Act that mandates that the goods shall not be sold at prices below the MRP declared thereon. Also, there is nothing in the GST MOV-06 detention order to show that, on account of the wrong classification, there was any difference in the rate of tax adopted by the assessee.
“In the light of the above-said facts and in compliance with the direction of the Hon’ble High Court of Kerala in WP(C). No. 30798 of 2019 (Y) dated. 18.11.2019, all concerned are hereby directed not to detain or issue any Show Cause Notice to the goods under transport or stored in parcel agencies, raising the sole reason for undervaluation of the goods compared to the Maximum Retail Price (MRP),” the circular issued on Wednesday said.
“If any undervaluation cases are suspected in such cases, the officers are directed to upload the details of such invoices using the option provided in the Mobile App and send a report to the jurisdictional Officer, marking a copy to the jurisdictional district Joint Commissioner. Further, the intelligence squads shall gather evidence to establish the case by collecting documents about the actual value of the supply. The jurisdictional officer concerned shall verify the same with the help of the report and the uploaded details. Thereafter, the jurisdictional officer of the taxpayer vertical or the Intelligence formation can take further action as provided in the law,” the circular added.
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