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CMA Final · Indirect Tax Laws and Practice · Inspection, Search, Seizure, Arrest and Prosecution

Under the CGST Act, 2017, a proper officer not below the rank of Joint Commissioner has authorised an officer to inspect a transporter's godown. Which condition must the officer have reason to believe for inspection of the godown or any other place under section 67(1)(b)?

Inspection of a godown or warehouse is justified when the officer has reason to believe that goods which have escaped payment of tax are being kept there, or that accounts or goods are kept in a way likely to cause tax evasion. No value limit or late-filing trigger applies.

  1. AThe keeper of the godown has filed a GST return late by more than one month
  2. BThe owner or operator is keeping goods which have escaped payment of tax, or has kept accounts or goods in a manner likely to cause evasion of taxCorrect
  3. CThe godown holds goods worth more than Rs 10 lakh
  4. DThe godown owner is not registered under GST

Explanation

Section 67(1)(b) allows authorisation of inspection where a transporter, or the owner or operator of a warehouse, godown or other place, keeps goods which have escaped tax or keeps accounts or goods in a manner likely to cause evasion. No value threshold or late return trigger exists. Hence the second option is correct, and the others are conditions not in the provision.

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