In a growing outcry across Gujarat, traders have accused both Central and State GST officers of grossly misusing Section 67(1) of the Goods and Services Tax (GST) Act, leading to harassment, fear, and alleged extortion under the guise of inspections.
Allegations of Overreach and Misuse of Power
According to multiple complaints, GST officials are reportedly visiting business premises armed with vague or unclear warrants, often failing to clarify whether the action is under Section 67(1) (which allows inspection) or Section 67(2) (which permits search and seizure).
Traders claim that during such inspections, officers:
- Intimidate business owners, especially the elderly and small-scale traders.
- Confiscate mobile phones and access stock registers, accounts, and sensitive data.
- Threaten legal consequences and property seizures, which are not permitted under Section 67(1).
- Demand lump-sum payments under CGST and SGST heads post-inspection, often without proper documentation.
This has created a climate of fear, particularly among less-informed business owners who are unaware of the legal boundaries between inspection and seizure.
Formal Complaint Lodged with CGST Commissioner
In response to these alleged abuses, a formal complaint has been submitted to Sunil Kumar Mal, Chief Commissioner of CGST. The complaint highlights how inspection powers are being twisted to coerce payments and how procedural lapses are being weaponized instead of corrected.
Call for Reforms from Ahmedabad Traders’ Federation
The Ahmedabad Traders’ Federation has called on the government to take immediate corrective measures to prevent the misuse of inspection powers. Their key demands include:
- Mandatory distinction of warrant type: Officers must clearly state whether the action is under Section 67(1) or 67(2).
- Presence of tax consultants: Traders should be allowed to have their tax consultants present during any inspection.
- Summons instead of on-site inspections: Where possible, inquiries should be held at government offices instead of business premises.
- Trader education: Initiatives to educate traders about their rights and the legal difference between inspection and seizure.
The Federation stressed that minor compliance errors are often inflated and used as a tool for intimidation. Instead of penal action, they suggested that GST officials should focus on assisting businesses in adhering to tax regulations.
Conclusion
The growing unrest among Gujarat’s trading community reveals deep concerns over how GST enforcement is being carried out. With formal complaints now in motion and trader bodies stepping up pressure, authorities may soon have to reconsider the implementation and oversight of Section 67(1) to ensure it is not abused for unofficial gains.