Inspection of Goods in Movement – Section 68 of GST

In the dynamic landscape of GST in India, Section 68 of the CGST Act plays a pivotal role in ensuring transparency, compliance, and effective monitoring of goods in transit. Introduced as part of the GST framework, this section lays down specific obligations for transporters and empowers authorities to inspect goods during movement.

Enforced from 1st July 2017, Section 68 provides a robust mechanism for preventing tax evasion and tracking the movement of goods across the country.

What is Section 68 of the CGST Act?

Section 68 of the CGST Act, 2017 pertains to the inspection of goods in movement and outlines the responsibilities of persons in charge of a conveyance carrying goods. It also empowers proper officers to inspect such goods during transit.

Sub-Section (1): Obligation to Carry Documents and Devices

“The Government may require the person in charge of a conveyance carrying any consignment of goods of value exceeding such amount as may be specified to carry with him such documents and such devices as may be prescribed.”

• The government mandates that transporters of goods exceeding a specified value (usually ₹50,000 or as notified) must carry prescribed documents, including:

  • E-way bill (Electronic Way Bill)

  • Invoice or Bill of Supply

  • Delivery challan, if applicable

• The person in charge must also carry any device (such as a mobile device with E-way bill system access) that allows real-time verification of documents.

Sub-Section (2): Validation of Documents

“The details of documents required to be carried under sub-section (1) shall be validated in such manner as may be prescribed.”

• Documents such as the E-way bill must be validated either electronically via the GST portal or any notified method.

• The validation process ensures that the details mentioned in the invoice or delivery challan match the details filed online.

• Proper validation facilitates seamless transit and helps in reducing check-post delays.

Sub-Section (3): Powers of the Proper Officer

“Where any conveyance referred to in sub-section (1) is intercepted by the proper officer at any place, he may require the person in charge of the said conveyance to produce the documents prescribed under the said sub-section and devices for verification, and the said person shall be liable to produce the documents and devices and also allow the inspection of goods.”

• Authorized GST officers can intercept vehicles at any place.

• They are empowered to demand the production of:

  • Valid documents (E-way bill, invoice, etc.)

  • Devices used for generating and storing such documents

• The person in charge of the vehicle must cooperate fully with inspection proceedings.

• Failure to comply may lead to detention of goods and vehicle, and subsequent penalties.

Compliance Guidelines Under Section 68

To remain compliant with Section 68, businesses and transporters must adhere to the following best practices:

1. Always generate an E-way bill for consignments exceeding the notified threshold.

2. Ensure document accuracy: Match all details across invoice, E-way bill, and delivery challan.

3. Train drivers and logistics staff to respond appropriately if intercepted by GST officials.

4. Use tracking and mobile tools to store and present documents quickly during inspection.

5. Stay updated with GST notifications and circulars regarding any changes in rules or limits.

Connection with Rule 138 of CGST Rules

Though Rule (7) is mentioned, the detailed inspection mechanism and E-way bill generation are extensively covered under Rule 138 of the CGST Rules. Rule 138 specifies:

• When and how the E-way bill is to be generated

• Details required in the E-way bill

• Modes of generation (web portal, SMS, mobile app, etc.)

Thus, Section 68 and Rule 138 work in tandem to ensure effective control over the movement of goods and curb tax evasion.

Penalties for Non-Compliance

Failing to comply with the provisions under Section 68 can result in:

• Seizure of goods and conveyance

• Penalty equivalent to the tax payable

• Detention of goods until penalty is paid

• Prosecution in extreme cases of evasion

The authorities are strict in enforcing these provisions to maintain the sanctity of GST compliance.

Conclusion

Section 68 of the CGST Act is a cornerstone in the framework of GST compliance for the movement of goods. It not only empowers tax officers to conduct inspections but also holds transporters and suppliers accountable for maintaining proper documentation during transit. As businesses increasingly embrace digital solutions, ensuring real-time documentation and validation is key to seamless logistics and regulatory compliance.

To avoid legal hassles and penalties, it is essential for all stakeholders—manufacturers, traders, transporters, and logistics partners—to thoroughly understand and implement the requirements under Section 68.