Bond for Release of Seized Goods under GST

Under GST, Offices not below the rank of Joint Commissioner can order for inspection or search of premises when they have reasons to believe there are contraventions to the

GST Act or Rules. During an inspection or search, the authorised Officer can order for the seizure of goods, documents, books or things liable to confiscation. To release the seized goods under GST, the concerned individual shall execute a bond in FORM GST INS-04 with required details and documents. On seizing goods or documents or things, the officer would prepare an inventory of goods seized with the description, quantity, unit, make, mark or model and have it signed by the person from whom the goods are seized. Along with the inventory, the Office would issue an order for seizure in FORM GST INS-02 or FORM GST INS-03. Read on GST Interstate vs Intrastate Supply Meaning

Releasing Goods Seized under GST

Any person who wishes to release the seized goods on a provisional basis can execute a bond for the value of the goods in FORM GST INS-04 and furnish security in the form of a bank guarantee equivalent to the amount of applicable tax, interest and penalty payable. If the person to whom the goods were released provisionally fails to produce the goods at the appointed date and place, the bank guarantee could be encashed and adjusted against the tax, interest and penalty and fine. A sample bond for the release of goods seized under GST is provided below:

BOND FOR RELEASE OF GOODS SEIZED

[See rule 140(1)]

I.................of....................hereinafter called "obligor(s)" am held and firmly bound to the President of India (hereinafter called "the President") and/or the Governor of ………….(State) (hereinafter called “the Governor”) in the sum of...........................rupees to be paid to the President / the Governor for which payment will be made. I jointly and severally bind myself and my heirs/ executors/ administrators/ legal representatives/successors and assigns by these presents; dated this...................day of.................... WHEREAS in accordance with the provisions of sub-section (2) of section 67, the goods have been seized vide order number ……………………dated………… having value ………….rupees involving an amount of tax of ……………………. rupees. On my request the goods have been permitted to be released provisionally by the proper officer on execution of the bond of value …………………rupees and a security of ……………………rupees against which cash/bank guarantee has been furnished in favour of the President/ Governor; and WHEREAS I undertake to produce the said goods released provisionally to me as and when required by the proper officer duly authorized under the Act. And if all taxes, interest, penalty, fine and other lawful charges demanded by the proper officer are duly paid within ten days of the date of demand thereof being made in writing by the said proper officer, this obligation shall be void. OTHERWISE and on breach or failure in the performance of any part of this condition, the same shall be in full force: AND the President/Governor shall, at his option, be competent to make good all the losses and damages from the amount of the security deposit or by endorsing his rights under the above-written bond or both; IN THE WITNESS THEREOF these presents have been signed the day hereinbefore written by the obligor(s).

Signature(s) of obligor(s).

Date : Place : Witness (1) Name and Address Witness (2) Name and Address Date: Place: Accepted by me this.............................day of .........................(month).................……..(year) ……………………………….. (designation of officer) for and on behalf of the President /Governor.

(Signature of the Officer)

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Frequently Asked Questions

Common questions about Bond for Release of Seized Goods under GST.

Executing a bond in FORM GST INS-04 allows an individual to release the goods seized by the authorities on a provisional basis. By furnishing this bond, along with security in the form of a bank guarantee, the person can temporarily regain possession of the seized goods while the investigation or inquiry is ongoing.

Officers not below the rank of Joint Commissioner can order for inspection or search of premises if they have reasons to believe there are contraventions to the GST Act or Rules. These authorized officers can seize goods, documents, books, or things liable for confiscation during such inspections or searches.

During the seizure of goods, the authorized officer prepares an inventory of the seized goods, describing their details such as quantity, unit, make, mark, or model. Additionally, the officer issues an order for seizure in FORM GST INS-02 or FORM GST INS-03.

To release the seized goods provisionally, the individual must furnish security in the form of a bank guarantee equivalent to the amount of applicable tax, interest, and penalty payable on the seized goods.

If the person to whom the goods were released provisionally fails to produce the goods at the appointed date and place, the bank guarantee provided as security could be encashed and adjusted against the tax, interest, penalty, and fine payable.

No, the bond for the release of seized goods under GST (FORM GST INS-04) can be executed only by the person from whom the goods were seized or their legal representative, such as an heir, executor, administrator, or successor.

The security deposit or bank guarantee furnished along with the bond for the release of seized goods serves as a financial guarantee to ensure compliance with the conditions of the bond. It can be encashed by the authorities if the person fails to fulfill their obligations or pay the applicable taxes, interest, and penalties.

Yes, according to the bond conditions, all taxes, interest, penalties, fines, and other lawful charges demanded by the proper officer must be duly paid within ten days of the date of demand being made in writing.

If there is a breach or failure in the performance of any part of the bond's conditions, the bond shall be in full force, and the President/Governor shall be competent to make good all the losses and damages from the amount of the security deposit or by endorsing their rights under the bond or both.

The bond for the release of seized goods under GST (FORM GST INS-04) is accepted by the designated officer on behalf of the President or the Governor of the respective state, depending on the jurisdiction of the case.