Traders across Gujarat have accused both Central and State GST officers of misusing Section 67(1) of the GST Act to harass them and demand money, all under the guise of inspections and raids.
According to a media report, GST officials are allegedly threatening business owners with seizures and legal action—powers that are actually granted only under Section 67(2), not 67(1). Section 67(1) allows officials to inspect business premises, but does not authorize them to seize goods or collect dues on the spot.
Traders claim officers often enter shops and offices with vague or incomplete warrants, without clearly stating whether the inspection is under Section 67(1) or 67(2). This confusion, combined with limited legal knowledge among small and elderly business owners, leads many to panic, wrongly believing their premises are being raided.
In several cases, officials have allegedly taken mobile phones and accessed stock and financial records—actions that exceed the legal limits of an inspection. After such visits, traders say officers are demanding large payments under CGST and SGST, using threats of further action to pressure them.
A formal complaint highlighting these practices has been submitted to CGST Chief Commissioner Sunil Kumar Mal.
Traders Demand Clear Rules and Fair Treatment
The Ahmedabad Traders’ Federation has urged the government to reform the inspection process. Instead of sudden visits to business premises, they recommend that traders be summoned to GST offices, where inquiries can be conducted in a fair and formal environment.
They also proposed the following reforms:
- Traders should be allowed to have their tax consultants present during inspections.
- Officers must clearly state the type of warrant being used—whether under Section 67(1) or 67(2).
- The government should educate traders about the legal differences between inspection and seizure powers under the GST Act.
The Federation added that minor errors are often being exaggerated by officials to demand money, when a more constructive approach would be to guide traders on how to comply with GST rules.