Goods in Transit under GST: What Sections 129 and 130 Permit and What an Assessee Can Do
This article examines the CGST Act provisions on inspection, detention, seizure and confiscation of goods in movement, the safeguards in them, the way valuation and document errors are treated, and the remedies open to owners and transporters.
It is relevant now because the GST Council, at its 57th meeting on 8 October 2026, made recommendations on interception limits and on excluding goods in transit from Section 130. Those recommendations are proposals only. Until they are carried into amendments, notifications or circulars, the law stays as it was amended with effect from 1 January 2022, and a client's defence must rest on that law.
The statutory frame
Section 68 requires production of documents and permits inspection of goods in movement. Rules 138 to 138D deal with e-way bills, accompanying documents, verification, inspection reports and reporting of detention. Section 129 covers detention, seizure and release of goods and conveyances transported or stored in transit contrary to the Act or Rules. Section 130 covers confiscation, but only where the conditions of its particular clauses are made out. The determination of tax lies elsewhere, in Sections 73, 74 and 74A, of which Section 74A applies from the financial year 2024-25.
The interception procedure is prescribed by CBIC Circular 41/15/2018-GST dated 13 April 2018. Its references to tax-plus-penalty and to automatic escalation must be read subject to the amendments effective 1 January 2022.
What Section 129 requires
Order and time limits
- Goods or a conveyance cannot be detained or seized without serving an order of detention or seizure on the person transporting them (proviso to
Section 129(1)). A verbal hold is not sufficient. - Under
Section 129(3), notice is to be issued within 7 days of detention or seizure, and the order is to be passed within 7 days of service of the notice. Section 129(4)bars a penalty without an opportunity of hearing.Section 130(4)carries the same protection for confiscation.
The amount demanded for release
The release amount is a penalty-based sum under Section 129(1), and not tax plus 200% penalty as under the pre-2022 text. Any independent tax liability stays under the tax-determination provisions.
- Owner comes forward (clause (a)): for taxable goods, 200% of the tax payable; for exempt goods, 2% of the value or Rs 25,000, whichever is less.
- Owner does not come forward (clause (b)): for taxable goods, 50% of the value or 200% of the tax, whichever is higher; for exempt goods, 5% of the value or Rs 25,000, whichever is less.
- Clause (c) permits release against security equal to the clause (a) or (b) amount, in the prescribed form and manner. The circular refers to a bond in FORM GST MOV-08 with bank guarantee.
A worked example: taxable goods valued at Rs 8,00,000 with GST at 18% carry tax of Rs 1,44,000. Under clause (a), the penalty is 200% of tax, which is Rs 2,88,000. Under clause (b), 50% of value is Rs 4,00,000 and 200% of tax is Rs 2,88,000; the higher figure, Rs 4,00,000, applies.