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Inspection, Search and Seizure Under GST

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Inspection is the process of applying assessments, tests, and tools to specific areas of work. The findings are usually compared to specified requirements and standards to see if the object or event satisfies these goals. A Benchmark Evaluation Procedure is generally utilised to ensure consistency.

The CGST/SGST Act includes a new clause called “inspection.” It is a gentler provision than the search that allows police to enter any taxable person’s place of business, as well as any person engaged in moving goods or who owns or operates a warehouse or godown.

Did you know?

With the strict anti-tax evasion scheme by the government, GST has strict provisions for inspecting and searching places of business for suspected tax evaders.

Inspection Under GST

Officers are given numerous regulations and authorities in order to perform inspections under GST. The goods and service tax, India’s most major and important economic reform, went into effect on July 1, 2017. The Goods and Service Tax (GST) replaced many taxes, including centralised excise, VAT, service charges, and others. GST, or the consolidated tax system, has improved company efficiency. When it comes to the application element, most firms are subject to GST and GST rates

The CGST/SGST Act includes a provision for GST inspection. In comparison to search, inspections under GST are a gentler provision that allows inspectors to enter any taxable person’s business location, as well as any business location of a non-taxable person.

Also Read: GST FAQ – Search Your GST Queries | GST Frequently Asked Questions

When Does Inspection Under GST Take Place? 

A Joint Director (or a higher-ranking official) may have “reasons to think” that someone has undertaken the following in order to avoid paying taxes: 

  • Any supply transaction was suppressed. 
  • Stock in hand that has been suppressed 
  • Violated any of the requirements by claiming an excessive input tax credit 
  • Any transporter or warehouse owner/operator has retained products that have evaded tax payment or has stored accounts and/or items in a way that tax evasion is possible.

What’s the Difference Between a Search and an Inspection under GST? 

The term ‘search’ under GST refers to an endeavour to locate something. In tax/legal jargon, a search is an activity taken by a government official (either a tax agent or a law enforcement officer, depending on circumstances) to go through or closely inspect a location, person, item, or other objects in order to locate anything hidden or to uncover proof of a crime. Only the proper and lawful authority of law can be used to conduct the search. 

The act of studying anything, usually closely, is referred to as ‘inspectionunder GST. It is a gentler provision than search in tax/legal terms. It allows police to enter any taxable person’s place of business, as well as any business premises of a person who transports products or is an agent.

When and Who can Order a Search Under GST?

If the Joint Director of SGST/CGST or a senior official has “reasons to believe” – based on the findings of an audit or any other reason – they might conduct a search. 

There are several items that can be confiscated. Any papers, books, or other items that will be important throughout the proceedings are stashed away. Under the GST, a seizure can be made. 

What Does it Mean to Have a Seizure Under GST? 

In GST, the term ‘seizure’ is not defined in any way. Seizure, in legal terms, is the seizing of someone or something by force via legal processes, such as the confiscation of evidence discovered at a crime scene. It usually entails forcibly acquiring ownership against the owner’s will.

Seizure Procedure

The competent officer will issue a seizure order in the form GST INS-02. 

What authority does the officer with the search warrant have? The officer authorised to investigate will have the authority to close the premises’ door. If the entrance is denied, he can also bust through any establishment’s door. He can also crack open any closet or box where commodities, books, documents, or other valuables are thought to be hidden.

How Long Will the Officer Keep The Books and Documents? 

The officer shall keep the books and papers for as long as they are required for examination and investigation. Other books that are unrelated to the notification will be returned after 30 days of the notice’s date. The confiscated items can be discharged temporarily in exchange for a bond in GST registration INS-04 for the price of the items.

 Additionally, the owner must provide security in the form of a guarantee for the money owed ( tax, interest and penalty payable). The safety will be redeemed and used against the amount payable if the seller fails to provide the conditionally released items at the scheduled date and location.

What Happens After Seizure? 

  • Only in the company of an officer can the individual whose documents have been confiscated make copies. 
  • The commodities will be restored if no notification is issued within 6 months (extendable for another six months) following their seizure. 
  • The government has the authority to create a list of dangerous or perishable products that can be eliminated as quickly as they are confiscated. 
  • The officer will correctly list all seized items. 

Is the Criminal procedure Code applicable in these circumstances? Search, and seizure shall be governed by the rules of the Criminal Procedure Code.

Arrests Made Under the GST 

The defendant can be detained under GST if the Director believes they have committed an infraction under Section 132. To learn more about GST arrests, see our article. Interception and inspection of items in transit are also covered by the GST.

Also Read: GST Payment Online – How to Pay GST Online?


The most popular means of achieving uniformity, homogeneity, and standard of work is inspection. It is a cost-effective method of ensuring product quality by comparing it to already defined standards and specifications.

It also has a quality control function. If the item does not fall below the acceptable range, it will be rejected, and corrective steps will be implemented to ensure that future goods meet the required requirements.

In today’s industrial process, a GST inspection is a must-have tool. It aids in the control of quality, the reduction of manufacturing costs, and removes scrap losses.
Do you have issues with payment management and GST? Install the Legaltree App, a friend-in-need and one-stop solution for all issues related to income-tax or GST filing, employee management and more. Try it today!


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