Traders across Gujarat have raised serious allegations against both Central and State GST officers, accusing them of misusing Section 67(1) of the GST Act to harass and extort money under the pretext of inspections and raids.
According to complaints, GST officials have been threatening traders with seizures and legal action, despite Section 67(1) granting them only the power to inspect business premises, not to seize property or recover tax dues powers reserved under Section 67(2).
Traders allege that officials enter shops and offices with vague warrants, failing to specify whether the inspection falls under Section 67(1) or 67(2).
Due to a lack of legal awareness, many small and elderly business owners panic, assuming that their premises are being raided. Officers reportedly take mobile phones and access stock and accounts actions that go beyond the authority of a simple inspection.
After conducting inspections, officials are allegedly demanding hefty payments under CGST and SGST heads, threatening further action. A formal complaint has been filed with CGST Chief Commissioner Sunil Kumar Mal, outlining these practices.
The Ahmedabad Traders’ Federation has urged the government to revise current procedures to prevent such misuse. It suggests that instead of direct inspections at business premises, traders should be summoned to government offices, where proper inquiries can be conducted.
The Federation also emphasised the need for:
Allowing traders to be accompanied by their tax consultants during inspections.Mandatory clarification of warrant type (67(1) vs 67(2)) before any action.
Educating traders about the differences between inspection and seizure powers under the GST Act.
They stated that minor errors are being exaggerated by officers to extract money, when instead, guidance should be offered to help traders comply with the law.
