When GST Officers Ask for Warehouse Data: The Expanding Powers Under Section 52

When a GST officer asks an e-commerce operator for warehouse stock data, the demand often comes under Section 52 of the Central Goods and Services Tax (CGST) Act. Section 52 is not limited to tax collection at source. It also gives the department a clear route to obtain transaction data and stock data from the operator including data linked to warehouses managed by the operator.

Section 52(12) authorises an officer not below the rank of Deputy Commissioner to serve a notice on an e-commerce operator. The statutory provision reads as follows:

“Any authority not below the rank of Deputy Commissioner may serve a notice, either before or during the course of any proceedings under this Act, on any electronic commerce operator who is required to collect tax at source under this section, requiring him to furnish such details relating to—

(a) supplies of goods or services or both effected through such operator during any period; or (b) stock of goods held by the suppliers making supplies through such operator in the godowns or warehouses, by whatever name called, managed by such electronic commerce operator and declared as additional places of business by such suppliers, as may be specified in the notice.”

This language makes warehouse data a compliance subject under Section 52. The warehouse does not need to be owned by the operator. The law covers warehouses managed by the operator and uses wide words such as “by whatever name called”.

What Section 52(12)(b) Covers

Section 52(12)(b) links three elements. The goods must belong to suppliers who make supplies through the operator. The goods must be held in a godown or warehouse managed by the operator. The place must be declared as an additional place of business by the supplier.

This third element is central. Once a supplier declares a fulfilment centre as an additional place of business, the stock at that location enters the GST compliance framework. Shared fulfilment centres fall within this structure, and more than one supplier can declare the same warehouse as an additional place of business, subject to proper records.

What the Operator Must Do After a Notice

Section 52(13) fixes a strict timeline for compliance. The provision states:

“Every electronic commerce operator on whom a notice has been served under sub-section (12) shall furnish the required information within fifteen working days of the date of service of such notice.”

The operator must treat this timeline as mandatory. The response must be complete and filed within the stated period.

Section 52(14) prescribes the consequence of failure. The provision reads:

“If an electronic commerce operator fails to furnish the information required by the notice served under sub-section (12), he shall be liable to a penalty which may extend to twenty-five thousand rupees, without prejudice to any action which may be taken under section 122.”

This penalty applies even if no tax demand is raised at that stage.

Why Officers Ask for Warehouse Data

Warehouse data supports verification of outward supplies, stock movement, and return disclosures. E-commerce operators hold order data and platform transaction data. In fulfilment models, operators also hold data on inward and outward movement of goods stored in their warehouses.

Section 52 treats the operator as a key holder of this data. This data helps officers verify whether suppliers have reported correct turnover and tax liability.

Practical Scope of Warehouse Data

A notice under Section 52(12) can seek supplier-wise stock positions at operator-managed warehouses that are declared as additional places of business. It can also seek period-wise details of supplies made through the platform.

In practice, officers seek details such as supplier GSTIN, warehouse address, product details, stock inward, stock outward, and closing stock for a specified period. The notice governs the scope, and the operator must respond within that scope.

Impact on Suppliers Using Warehouses

Suppliers using fulfilment centres must ensure that such warehouses are declared as additional places of business when required. Stock stored at these locations must match outward supply records, invoices, and GST returns.

If discrepancies arise, officers can rely on warehouse data obtained from the operator. This can lead to demand, interest, and penalty proceedings against the supplier.

Suppliers cannot claim that warehouse data rests only with the operator. The law integrates this data into the compliance system.

Judicial View on Section 52 Data

Section 52 data often forms the basis of mismatch assessments including differences between GSTR-8 and supplier returns. In Sneh Communications v. The Deputy Commercial Tax Officer, the Madras High Court examined an assessment that involved a TCS mismatch between GSTR-8 and GSTR-1. The Court set aside the assessment order, directed the authority to pass a fresh order after granting a hearing, required deposit of a portion of the disputed tax, and treated the assessment order as a show cause notice for filing objections.

The decision confirms that in actions based on Section 52 data, the department must grant an opportunity of hearing before confirming any adverse consequence arising from a data mismatch. The taxpayer must be allowed to explain the mismatch with supporting records.

Compliance Position for Businesses

E-commerce operators must maintain clear warehouse and transaction records. They must have systems to extract supplier-wise and period-wise data when a notice is received. They must meet the fifteen working day deadline.

Suppliers must ensure correct registration details including additional places of business. They must keep stock records that reconcile with operator data and GST returns.

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