Section 129 of the Central Goods and Services Tax Act, 2017 deals with the detention, seizure and release of goods and conveyances in transit when goods are transported or stored while in transit in contravention of the provisions of the GST law or the rules made under it.
This provision is particularly important for businesses, transporters, e-commerce operators, logistics companies and persons responsible for transporting goods because GST authorities can detain goods and the vehicle carrying them when violations are detected during movement.
The present Section 129 operates primarily as a mechanism for dealing with goods moving in contravention of GST requirements. It specifies the monetary conditions for release, the procedure for issuing notice and passing an order, the right to be heard, and the circumstances in which proceedings may move towards confiscation under Section 130.
The provision has undergone significant changes over the years. In particular, the Finance Act, 2021 amendments, made effective from 1 January 2022, substantially changed the release and adjudication mechanism under Section 129. The current law should therefore be distinguished from older articles that still describe the pre-2022 tax-plus-penalty structure.
What Is Section 129 of the CGST Act?
Section 129 is titled “Detention, seizure and release of goods and conveyances in transit.”
It applies where a person:
- transports goods while they are in transit; or
- stores goods while they are in transit,
and does so in contravention of the CGST Act or the rules made under it.
In such circumstances, the goods, the conveyance used for transporting them and the documents relating to the goods and conveyance can become liable to detention or seizure.
The section then provides specific monetary conditions for release of the goods and conveyance.
Purpose of Section 129
The purpose of Section 129 is to provide a statutory mechanism for dealing with GST violations detected while goods are in transit.
Movement of goods under GST is supported by documentation and compliance requirements, including requirements relating to:
- tax invoices;
- bills of supply;
- delivery challans;
- e-way bills;
- correct description of goods;
- quantity and value;
- consignor and consignee details;
- vehicle details; and
- other prescribed information.
Where goods are found to be transported in contravention of the GST law or rules, Section 129 provides the legal mechanism through which the goods and conveyance may be detained or seized and subsequently released subject to the statutory conditions.
Section 129(1) – When Can Goods Be Detained or Seized?
Section 129(1) begins with a non-obstante clause and applies where any person transports or stores goods while they are in transit in contravention of the Act or the rules made thereunder.
In such a case, the following can be liable to detention or seizure:
- The goods;
- The conveyance used as a means of transport for carrying those goods; and
- Documents relating to the goods and conveyance.
The provision therefore does not deal only with the goods themselves. The conveyance used for transporting the goods can also be affected.
What Does “Goods in Transit” Mean?
Section 129 applies specifically to goods that are in transit.
This generally concerns situations where goods are being transported from one place to another and the movement is subject to GST compliance requirements.
For example, goods may be transported:
- from a manufacturer to a distributor;
- from a supplier to a customer;
- between branches;
- from a warehouse to a customer;
- from one State to another;
- from a seller to an e-commerce customer; or
- through a logistics or transport operator.
If the movement is found to contravene GST law or rules, Section 129 can become relevant.
Release of Goods When the Owner Comes Forward
Section 129(1)(a) provides a specific monetary mechanism where the owner of the goods comes forward for payment of the penalty.
For taxable goods, release is available on payment of a penalty equal to 200% of the tax payable on the goods.
For exempted goods, release is available on payment of an amount equal to:
- 2% of the value of the goods; or
- ₹25,000,
whichever is less.
An important point is that the current Section 129(1)(a) refers to the penalty payable for release. Older versions of Section 129 contained a different tax-plus-penalty structure, so outdated explanations should not be used for current compliance.
Example – Owner Comes Forward
Suppose taxable goods are being transported and the tax payable on those goods is ₹50,000.
If the owner comes forward under the current Section 129(1)(a), the penalty for release would be:
200% of ₹50,000 = ₹1,00,000
The statutory release mechanism would therefore require payment of the applicable penalty of ₹1,00,000.
The exact liability in an actual case must be determined from the applicable facts and statutory provisions.
Release When the Owner Does Not Come Forward
Section 129(1)(b) provides a separate formula where the owner of the goods does not come forward for payment of the penalty.
For taxable goods, release is available on payment of a penalty equal to the higher of:
- 50% of the value of the goods; or
- 200% of the tax payable on the goods.
For exempted goods, release is available on payment of:
- 5% of the value of the goods; or
- ₹25,000,
whichever is less.
This distinction between the owner coming forward and not coming forward is one of the most important features of the current Section 129.
Example – Owner Does Not Come Forward
Suppose taxable goods have:
- Value = ₹4,00,000
- Tax payable = ₹50,000
Under Section 129(1)(b):
50% of value = ₹2,00,000
200% of tax = ₹1,00,000
The higher amount is ₹2,00,000.
Therefore, the statutory penalty amount under clause (b) would be ₹2,00,000.
Release Against Security
Section 129(1)(c) provides another route for release.
Instead of making the payment specified under clause (a) or clause (b), the person can obtain release by furnishing security equivalent to the amount payable under the applicable clause, in the form and manner prescribed.
This means that Section 129 does not restrict release only to immediate cash payment.
The statutory framework also recognises release against security, subject to the prescribed procedure.
Detention or Seizure Order Must Be Served
The proviso to Section 129(1) contains an important procedural safeguard.
It states that goods or conveyance cannot be detained or seized without serving an order of detention or seizure on the person transporting the goods.
Therefore, detention is not intended to operate without a formal order being served on the person transporting the goods.
Section 129(2) – Important Current Position
Older versions of Section 129 contained a sub-section 129(2) stating that the provisions of Section 67(6) would apply, mutatis mutandis, to detention and seizure under Section 129.
However, this provision was removed as part of the changes made effective from 1 January 2022. Therefore, current explanations of Section 129 should not continue to present the old Section 129(2) as an operative provision.
This is an important distinction between older GST articles and the current statutory framework.
Section 129(3) – Notice and Order
Section 129(3) prescribes the procedure after goods or conveyance have been detained or seized.
The proper officer detaining or seizing the goods or conveyance must:
- issue a notice specifying the penalty payable; and
- thereafter pass an order for payment of the penalty under Section 129(1)(a), (b) or (c).
Under the current provision, the notice must be issued within seven days of detention or seizure, and the order must be passed within seven days from the date of service of the notice.
This time-bound mechanism is an important part of Section 129.
FORM GST MOV-06 – Order of Detention
In the prescribed procedural framework, FORM GST MOV-06 is used for the order of detention under Section 129(1).
The order records the detention of the goods and conveyance and forms part of the procedural chain following interception and inspection.
The prescribed forms and procedures should be followed by the proper officer while implementing Section 129.
FORM GST MOV-07 – Notice
After detention, the notice under Section 129(3) is issued in FORM GST MOV-07.
The notice specifies the amount proposed to be payable in accordance with Section 129.
The person concerned can respond to the notice and exercise the statutory opportunity of hearing before the order is passed.
FORM GST MOV-09 – Order
The order determining the amount payable under Section 129 is issued in FORM GST MOV-09 under the prescribed procedure.
The importance of this order was clarified by the Supreme Court in M/S ASP Traders v. State of Uttar Pradesh, decided on 24 July 2025.
The Supreme Court held that payment of the amount under Section 129 does not eliminate the statutory obligation of the proper officer to pass a formal, reasoned order under Section 129(3). The Court specifically held that the taxpayer’s right to challenge the levy through the statutory appeal mechanism cannot be treated as waived merely because payment was made for release of the goods.
This is an important current legal development for taxpayers dealing with Section 129 proceedings.
Section 129(4) – Opportunity of Being Heard
Section 129(4) provides an important procedural safeguard.
No penalty can be determined under Section 129(3) without giving the person concerned an opportunity of being heard.
This means that the person affected by the detention proceedings must be given an opportunity to present their explanation before the final determination is made.
The person may explain, depending on the facts:
- why the goods were being transported;
- why the documents were correct;
- why an alleged discrepancy occurred;
- whether the e-way bill was valid;
- whether the invoice matched the goods;
- whether the vehicle details were correctly reported;
- whether the alleged contravention actually occurred; or
- any other relevant factual or legal issue.
Section 129(5) – Proceedings Deemed Concluded on Payment
Section 129(5) provides that upon payment of the amount referred to in Section 129(1), proceedings in respect of the notice issued under Section 129(3) shall be deemed to be concluded.
However, the Supreme Court’s 2025 judgment in ASP Traders is important for understanding how this provision operates.
The Court held that the deeming provision does not remove the proper officer’s obligation to pass a formal and reasoned order under Section 129(3). Payment for release cannot by itself be treated as a waiver of the taxpayer’s right to challenge the levy.
Therefore, businesses should distinguish between:
Release of goods after payment
and
Formal adjudication/order under Section 129(3).
They are not necessarily the same procedural event.
Supreme Court Ruling in ASP Traders
The Supreme Court’s judgment in M/S ASP Traders v. State of Uttar Pradesh is particularly significant for Section 129 compliance.
The taxpayer had paid the amount to secure release of the detained goods but sought a formal order so that the statutory appeal remedy could be exercised.
The Supreme Court held that the proper officer is required to pass a formal, reasoned order under Section 129(3) and upload the corresponding summary in FORM GST DRC-07.
The Court explained that the expression “deemed to be concluded” in Section 129(5) cannot be interpreted as meaning that the taxpayer has automatically abandoned the right to challenge the levy.
This judgment is important for taxpayers who make payment because goods are urgently required for business operations but subsequently wish to challenge the demand.
Section 129(6) – Failure to Pay
Section 129(6) deals with the situation where the person transporting the goods or the owner of the goods fails to pay the amount required under Section 129(1).
Under the current provision, if the required amount is not paid within seven days of detention or seizure, further proceedings are to be initiated under Section 130.
The proviso allows the proper officer to reduce this period where the detained or seized goods are:
- perishable;
- hazardous; or
- likely to depreciate in value with the passage of time.
Therefore, the seven-day period is not necessarily an absolute period in cases involving such goods.
Section 129 and Section 130
Section 129 and Section 130 are closely connected but serve different functions.
Section 129
Section 129 primarily deals with:
- detention;
- seizure;
- release; and
- penalty relating to goods and conveyances in transit.
Section 130
Section 130 deals with:
- confiscation of goods or conveyances; and
- penalty in circumstances specified by that section.
Where the amount required under Section 129 is not paid within the statutory period, Section 129(6) provides for further proceedings under Section 130.
Section 129 Is Different From Section 68
Section 68 deals with inspection of goods in movement.
It provides the legal framework under which the Government may require the person in charge of a conveyance carrying goods to carry prescribed documents or devices and produce them for verification.
Section 129 comes into operation when a contravention of the GST law or rules is found in relation to goods in transit.
Therefore:
Section 68 = Inspection and verification of goods in movement
Section 129 = Detention, seizure and release when contravention is found
The two provisions often operate together in practical enforcement situations.
Section 129 and E-Way Bill Compliance
E-way bill compliance is one of the important areas in which Section 129 can become relevant.
An e-way bill may contain information relating to:
- consignor;
- consignee;
- invoice or document number;
- value of goods;
- goods description;
- vehicle details;
- place of dispatch; and
- destination.
A discrepancy between the actual movement and the prescribed information can lead to enforcement action depending on the nature of the discrepancy and the applicable law.
However, not every minor or clerical discrepancy should automatically be treated as equivalent to every other type of GST violation. The facts and applicable provisions must be examined in each case.
Detention of the Conveyance
Section 129 specifically refers to the conveyance used as a means of transport.
Therefore, the proceeding can affect the vehicle or other conveyance carrying the goods.
This is particularly significant for transporters because the vehicle may belong to a person who is different from the owner of the goods.
The factual circumstances, ownership, involvement in the contravention and applicable statutory provisions should therefore be considered separately.
Does Section 129 Apply Only to Registered Persons?
No.
The wording of Section 129 refers to “any person” who transports or stores goods while they are in transit in contravention of the Act or rules.
Therefore, the provision is not framed as applying only to registered taxpayers.
The actual consequences depend on the facts and the nature of the contravention.
Practical Example – Incorrect Vehicle Details
Suppose a supplier dispatches goods with a valid invoice and e-way bill, but the vehicle number entered in the e-way bill does not correspond to the vehicle actually transporting the goods.
During verification, the officer may examine the discrepancy and the circumstances in which it occurred.
If the movement is found to contravene the GST law or rules, Section 129 proceedings may become relevant.
The taxpayer or transporter should provide the relevant documents and explanation and use the opportunity of hearing provided under Section 129(4).
Practical Example – Goods Without Required Documents
Suppose taxable goods are being transported without the documents required under the applicable GST rules.
The vehicle is intercepted during movement.
If the officer determines that the goods are being transported in contravention of the GST law or rules, Section 129 can provide the statutory basis for detention or seizure and subsequent release proceedings.
The owner or person concerned should examine the notice and provide an appropriate response.
Practical Example – Owner Comes Forward
Suppose taxable goods are detained and the owner comes forward for payment under Section 129(1)(a).
If the tax payable on the goods is ₹80,000, the penalty under the current clause (a) would be:
200% × ₹80,000 = ₹1,60,000
The release mechanism under Section 129(1)(a) would operate according to the statutory conditions and prescribed procedure.
👉 Read More → Section 131 – Confiscation or penalty not to interfere with other punishments
Practical Example – Owner Does Not Come Forward
Suppose taxable goods have:
- Value = ₹6,00,000
- Tax payable = ₹1,00,000
Under Section 129(1)(b):
50% of value = ₹3,00,000
200% of tax = ₹2,00,000
The higher amount is ₹3,00,000.
Therefore, the statutory penalty under clause (b) would be ₹3,00,000.
Practical Example – Exempt Goods
Suppose exempt goods have a value of ₹8,00,000.
Where the owner comes forward, Section 129(1)(a) provides an amount equal to:
- 2% of value = ₹16,000; or
- ₹25,000,
whichever is less.
Therefore, the amount under that clause would be ₹16,000.
If the owner does not come forward, Section 129(1)(b) provides:
- 5% of value = ₹40,000; or
- ₹25,000,
whichever is less.
Therefore, the amount would be ₹25,000.
Documents That May Be Relevant in a Section 129 Proceeding
Depending on the circumstances, a taxpayer or transporter may need to produce:
- tax invoice;
- bill of supply;
- delivery challan;
- e-way bill;
- purchase order;
- transport documents;
- vehicle registration details;
- lorry receipt or similar transport record;
- GST registration details;
- correspondence concerning the movement; and
- other documents relevant to the transaction.
The precise documents required depend on the nature of the movement and the alleged contravention.
What Should a Taxpayer Do When Goods Are Detained?
A taxpayer or transporter should take the following practical steps:
1. Obtain the Detention Order
Check the order served by the proper officer and identify the stated reason for detention.
2. Review the Notice
Examine the notice issued under Section 129(3), including the amount proposed to be payable.
3. Verify the Documents
Check:
- invoice;
- e-way bill;
- vehicle number;
- quantity;
- value;
- HSN or description;
- consignor;
- consignee; and
- other relevant details.
4. Prepare a Factual Response
Explain the discrepancy clearly and provide supporting documents.
5. Use the Opportunity of Hearing
Section 129(4) requires an opportunity of hearing before determination under Section 129(3).
6. Consider the Release Mechanism
Where immediate release is necessary, examine the statutory payment or security mechanism available under Section 129(1).
7. Obtain the Formal Order
Following the Supreme Court’s 2025 ruling, the taxpayer should not assume that payment eliminates the requirement for a formal Section 129(3) order.
8. Consider Appeal Where Appropriate
A person aggrieved by the applicable order should examine the statutory appeal mechanism and applicable limitation period.
Section 129 and Appeal
An order under Section 129(3) can have significant financial consequences.
The Supreme Court in ASP Traders emphasised that a formal, reasoned order is important because it enables the taxpayer to exercise the statutory remedy of appeal.
Therefore, a taxpayer should retain:
- the detention order;
- notice;
- reply;
- hearing submissions;
- payment proof;
- MOV-09 order;
- DRC-07 summary; and
- other relevant records.
These documents may be important if the taxpayer challenges the determination.
Section 129 and FORM GST DRC-07
Rule 142 provides the procedural framework for uploading summaries of specified orders.
The GST Council’s materials specifically identify Section 129 orders among the orders for which the summary is uploaded electronically in FORM GST DRC-07.
The Supreme Court in ASP Traders also referred to the requirement of uploading the summary of the Section 129(3) order in DRC-07.
Section 129 and Transporters
Transporters should understand that their role can become important during detention proceedings.
A transporter should generally maintain proper documentation concerning:
- vehicle;
- driver;
- consignor;
- consignee;
- goods;
- invoice;
- e-way bill; and
- movement details.
Where the transporter is not the owner of the goods, the legal consequences should be examined based on the particular facts and statutory provisions.
Important Difference Between Old and Current Section 129
The Section 129 mechanism has changed substantially since GST was introduced.
Older versions generally described release in terms of payment of:
- applicable tax; and
- specified penalty.
The current provision, effective from 1 January 2022, changed the release structure and primarily prescribes specified penalties for release under Section 129(1)(a) and (b).
Similarly, the old Section 129(2) relating to Section 67(6) is no longer part of the current operative structure.
Therefore, taxpayers should be careful when relying on old websites, old articles, old circular explanations or pre-2022 examples.
Section 129 – Key Differences from Section 130
| Basis | Section 129 | Section 130 |
|---|---|---|
| Main subject | Detention, seizure and release | Confiscation and penalty |
| Primary situation | Contravention during movement/transit | Statutory circumstances warranting confiscation |
| Release | Payment/security under Section 129(1) | Release through statutory confiscation framework, where applicable |
| Notice/order | Section 129(3) | Section 130 proceedings |
| Hearing | Section 129(4) | Separate statutory procedure |
| Further proceedings | Section 129(6) can lead to Section 130 | Confiscation proceedings |
Section 129 and Section 130 should therefore not be treated as identical provisions.
Section 129 – Key Differences from Section 68
| Basis | Section 68 | Section 129 |
|---|---|---|
| Main subject | Inspection of goods in movement | Detention, seizure and release |
| Purpose | Verification | Enforcement following contravention |
| Documents | Prescribed documents/devices | Relevant records supporting the movement |
| Consequence | Inspection/verification | Detention, seizure and monetary release mechanism |
Section 68 provides the inspection framework, while Section 129 addresses the consequences where goods in transit are found to be in contravention of GST law or rules.
Section 129 – Key Differences from Section 67
| Basis | Section 67 | Section 129 |
|---|---|---|
| Main subject | Inspection, search and seizure | Detention, seizure and release in transit |
| Typical setting | Business premises, places, goods, documents | Goods and conveyances in transit |
| Authority | Proper officer under statutory conditions | Proper officer dealing with goods/conveyance in transit |
| Purpose | Investigation/enforcement | Transit-related contravention |
| Release mechanism | Section 67 and applicable rules | Section 129(1) |
Section 129 should therefore not be treated as merely another form of search and seizure under Section 67.
Important Judicial Development – ASP Traders
The Supreme Court’s 24 July 2025 judgment in M/S ASP Traders v. State of Uttar Pradesh & Others is particularly important for the practical interpretation of Section 129.
The Court held that the proper officer remains required to pass a formal and reasoned order under Section 129(3), even where payment has been made for release of detained goods.
The Court also held that Section 129(5)’s deeming provision does not mean that payment automatically amounts to abandonment of the taxpayer’s statutory right to challenge the levy.
This means that taxpayers should not assume that paying the amount merely for immediate release of goods necessarily ends every legal question concerning the determination.
Compliance Checklist for Businesses
Businesses involved in movement of goods should maintain a strong transit-compliance system.
Before Dispatch
Check:
- invoice;
- recipient GSTIN;
- taxable value;
- tax amount;
- goods description;
- quantity;
- e-way bill;
- vehicle details; and
- other applicable documents.
During Transit
The transporter should ensure that prescribed documents and information remain available for verification.
After Interception
If goods are detained:
- obtain the detention order;
- review the alleged violation;
- verify all documents;
- respond to the notice;
- participate in the hearing;
- consider the release mechanism;
- obtain the formal order; and
- examine appeal rights where appropriate.
After Resolution
Maintain complete records of:
- MOV-06;
- MOV-07;
- replies;
- hearing records;
- payment documents;
- MOV-09;
- DRC-07; and
- any appeal or subsequent order.
Key Takeaways of Section 129
Section 129 can be summarised through the following points:
- Section 129 deals with detention, seizure and release of goods and conveyances in transit.
- It applies when goods are transported or stored while in transit in contravention of the CGST Act or rules.
- Goods can be detained or seized.
- The conveyance used to transport the goods can also be detained or seized.
- Documents relating to the goods and conveyance can also be covered.
- Section 129(1)(a) provides a release mechanism where the owner comes forward.
- For taxable goods, clause (a) prescribes a penalty equal to 200% of the tax payable.
- For exempt goods under clause (a), the amount is 2% of value or ₹25,000, whichever is less.
- Section 129(1)(b) applies where the owner does not come forward.
- For taxable goods, the penalty under clause (b) is 50% of the value or 200% of the tax payable, whichever is higher.
- For exempt goods under clause (b), the amount is 5% of value or ₹25,000, whichever is less.
- Section 129(1)(c) permits release against security equivalent to the applicable amount.
- Goods or conveyance cannot be detained or seized without serving the detention or seizure order on the person transporting the goods.
- The old Section 129(2) relating to Section 67(6) is no longer an operative provision after the 2021 amendments.
- Section 129(3) requires a notice specifying the penalty payable and a subsequent order.
- The current Section 129(3) provides seven days for issuance of the notice and seven days from service of notice for passing the order.
- Section 129(4) requires an opportunity of hearing before determination under Section 129(3).
- Section 129(5) states that proceedings relating to the notice are deemed concluded upon payment of the amount referred to in Section 129(1).
- The Supreme Court clarified in ASP Traders in 2025 that payment does not eliminate the requirement for a formal, reasoned Section 129(3) order.
- The formal order is important because it preserves the taxpayer’s statutory right to challenge the levy.
- Section 129(6) provides for further proceedings under Section 130 when the required amount is not paid within seven days, subject to the special proviso for perishable, hazardous or depreciating goods.
- Section 129 is closely connected with Section 68, which deals with inspection of goods in movement.
- Section 129 is different from Section 130, which deals with confiscation.
- Proper documentation and e-way bill compliance are important for avoiding transit-related GST disputes.
- Businesses should maintain complete records of detention notices, orders, payments and subsequent proceedings.
👉 Read More → Section 129 – Detention, seizure and release of goods and conveyances in transit
Conclusion
Section 129 of the CGST Act provides the statutory framework for dealing with goods and conveyances in transit that are transported or stored in contravention of GST law or the rules.
Where such a contravention is found, the goods and the conveyance used to transport them may be detained or seized. Section 129(1) then provides specific mechanisms for release, including payment of the prescribed penalty where the owner comes forward, a different penalty mechanism where the owner does not come forward, or furnishing of security equivalent to the applicable amount.
The current Section 129 is substantially different from the original GST provision. The Finance Act, 2021 changes, effective from 1 January 2022, altered the release structure and removed the earlier Section 129(2) mechanism relating to Section 67(6). Therefore, businesses should be careful when relying on older explanations of the section.
Section 129 also contains important procedural safeguards. The detention or seizure order must be served, the proper officer must issue the required notice and order within the statutory time periods, and Section 129(4) requires an opportunity of being heard before determination under Section 129(3).
A particularly important development is the Supreme Court’s 2025 decision in ASP Traders. The Court held that payment made for release of detained goods does not remove the proper officer’s obligation to pass a formal, reasoned order under Section 129(3). The Court also clarified that Section 129(5) cannot be interpreted as automatically taking away the taxpayer’s statutory right to challenge the levy.
Section 129 should therefore be understood not merely as a penalty provision but as a complete statutory procedure covering detention, seizure, release, notice, hearing, determination and further action under Section 130. For businesses and transporters, accurate invoices, valid e-way bills, correct vehicle details and proper transit documentation remain important parts of GST compliance.
Based on Google's Helpful Content System, this article emphasizes user value, transparency, and accuracy. It incorporates principles of E-E-A-T (Experience, Expertise, Authoritativeness, Trustworthiness).
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