Namaskar!

I recently came across a case where the Officer did more than what was in his power, and all this started with a wrong HSN Code.

This incident will teach you a lot about what to do when an Officer intercepts you for issues related to GST.

Without any further ado, let's understand what happened.

A Truck was stopped in the middle of its journey, and the Officer asked for documents related to the movement of Goods. Upon checking everything, the Officer found out that all the necessary documents were present in the Truck, including the valid Eway Bill, Invoice and other documents.

The Officer found no discrepancy, yet went on for physical verification of the Goods and found out that the Goods' HSN code (Leggings in this case) mentioned on the Tax Invoice was incorrect. There was no mismatch either in quantity or description.

 The Business had used the code 6104, whereas the correct code that should have been used was 6115. 

The Officer on checking this denied the further movement of the Truck and detained the truck.

Is the Officer right in this Instance?

This is a fantastic example to understand the rules and how the system works. The Officer is right with regards to the incorrect HSN code. However, the Officer needs to understand that the flying squad can check the documents and the Goods but cannot raise a dispute concerning valuation or classification of Goods.

In this case, the Officer can, however, refer the case to the Jurisdictional Officer of the owner of the goods who can further examine and take a decision for the particular case.

What should you do in such a case?

Now, let's face the reality!

It is almost impossible to convince the Officer of your scenario, majorly because the Officer has already made up his/her mind not to understand whatever you put in front of him/her.

But you need not worry when you have GST DOST on your side. We have listed the best options for you here:

(1) You should ask for MOV-06 and MOV-07 from the Intercepting Officer, which mentions the classification dispute. After getting the documents, you can submit a written reply along with relevant judgements and cite the rules as per Section 68. Doing this will cause problems for the Officer to make an Order against your specific case.

(2) Every state has an assigned EWB Nodal Officer. You can submit a complaint to the EWB Nodal Officer and ask for support.

Click Link to Get the List.

(3) If the Officer is harassing you and is misusing his/her powers, you can also lodge your complaint in the CPGRAMS, a Govt. Portal for Redressal of Public Grievances.

https://pgportal.gov.in/

A Piece of Advice from our Side

We handle many such cases on a day-to-day basis which has helped us understand what actually happens in these cases.

In a similar scenario concerning Input Tax Credit, the matter was taken to Honourable Rajasthan High Court, and the Business was instructed to arrange Surety for the particular amount in question.

The Court ordered the Business to ask two people to give Surety of Rs. 15 Lacs each instead of security in case the Business lost the case.

Case Reference: S. B. Civil Writ Petition No. 5266/2021

This tells us that even if you are not penalised at the moment, you will have to face a lot of problems like these which will affect your Business and mental health at the same time. Thus, taking care while selecting the correct HSN code will go a long way in avoiding Issues in your Business!

Any Officer does not have anything personal with any of the Businesses. It is the way you talk and present your case, makes all the difference.

In fact, in most cases, Truck Drivers or Business owners say something that hurts the Officer's Ego, resulting in all the problems.

Properly presenting yourself and the right choice of words with tone can save you tons of problems in the form of fines, litigation and what not!

There is more to share about the Current Issue, which I will be writing to you in the following Email.

Make sure to read that to have complete knowledge about this Issue.

If you have any Doubt related to anything linked to GST, feel free to contact GST DOST, and we will help solve your concerns along with Life-changing solutions for your Business!!!

T: 90 8888 3000

E: support@gstdost.com

www.askdost.com