E-Way Bill Notices — Detention, Seizure & Penalty (MOV-07)
Vehicle intercepted and goods detained over an e-way bill error? Understand the MOV form chain, the 7-day reply window, when the 200% penalty does NOT apply, and how to get your goods and vehicle released.
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What Happens When a Vehicle is Intercepted?
Under Section 68 of the CGST Act, 2017 read with Rules 138 and 138A of the CGST Rules, the person in charge of a conveyance carrying goods worth more than ₹50,000 must carry the tax invoice (or delivery challan) and a valid e-way bill. When a proper officer intercepts a vehicle and finds a defect — expired e-way bill, missing Part-B, a data-entry error, or no e-way bill at all — the goods and the conveyance can be detained under Section 129 of the CGST Act.
Since 1 January 2022 (Finance Act, 2021 amendments), Section 129 proceedings are penalty-only — the officer does not demand the tax itself at this stage, but the penalty is steep: 200% of the tax payable on the goods where the owner comes forward. This is why even small clerical errors can produce shockingly large penalty notices.
| Provision | Details |
|---|---|
| Section 68, CGST Act | Inspection of goods in movement — documents to be carried |
| Rule 138 / 138A, CGST Rules | E-way bill requirement (consignments > ₹50,000); validity 1 day per 200 km |
| Section 129, CGST Act | Detention, seizure and release of goods and conveyance in transit — penalty |
| Section 130, CGST Act | Confiscation of goods or conveyance (separate, more serious proceeding) |
| CBIC Circular 41/15/2018-GST | Prescribes the MOV-01 to MOV-11 procedure for interception and detention |
| CBIC Circular 64/38/2018-GST | Minor errors — only ₹500 CGST + ₹500 SGST penalty under Section 125, NOT Section 129 |
The MOV Form Chain — Step by Step
Every detention follows a prescribed sequence of MOV forms. Knowing where you are in this chain tells you exactly what to do next and how much time you have.
| Form | What It Is | Timeline |
|---|---|---|
| MOV-01 | Statement of the driver / person in charge of the conveyance | At interception |
| MOV-02 | Order for physical verification / inspection of goods and documents | At interception |
| MOV-04 | Report of physical verification | Within 3 days of MOV-02 |
| MOV-05 | Release order — where no discrepancy is found | On completion of verification |
| MOV-06 | Order of detention of goods and conveyance | If discrepancy found |
| MOV-07 | Show Cause Notice under Section 129(3) — specifies proposed penalty. This is the notice you must reply to. | Within 7 days of detention |
| MOV-08 | Bond (with security) for provisional release of goods pending adjudication | On application |
| MOV-09 | Order of demand of penalty — passed after considering your reply | Within 7 days of MOV-07 |
| MOV-10 | Show Cause Notice for confiscation under Section 130 | Where intent to evade is alleged |
| MOV-11 | Order of confiscation of goods and conveyance | After MOV-10 proceedings |
Penalty Under Section 129 — How Much?
| Situation | Taxable Goods | Exempted Goods |
|---|---|---|
| Owner comes forward — Sec 129(1)(a) | Penalty = 200% of tax payable | 2% of value of goods or ₹25,000, whichever is less |
| Owner does not come forward — Sec 129(1)(b) | 50% of value of goods or 200% of tax, whichever is higher | 5% of value of goods or ₹25,000, whichever is less |
| Provisional release — Sec 129(1)(c) | Furnish security (bond in MOV-08 + bank guarantee) equal to the penalty payable | |
| Conveyance release — Sec 129(6) | Transporter may obtain release of the vehicle on payment of the penalty or ₹1,00,000, whichever is less | |
| Non-payment within 15 days of MOV-09 | Goods and conveyance become liable to be sold or disposed of to recover the penalty | |
Minor Errors — When the 200% Penalty Does NOT Apply
This is the most under-used defence in detention cases. CBIC Circular No. 64/38/2018-GST (14 September 2018) directs that where the invoice and e-way bill are otherwise in order, proceedings under Section 129 shall not be initiated for minor discrepancies. Instead, only a general penalty of ₹500 under CGST + ₹500 under SGST (₹1,000 total) per consignment applies under Section 125.
The circular lists the following as minor errors:
- Spelling mistakes in the name of the consignor or consignee, where the GSTIN is correct
- Error in the PIN code, where the address is otherwise correct (and the error does not extend the e-way bill validity)
- Error in the address of the consignee, where the locality and other details are correct
- Error in one or two digits of the document (invoice) number
- Error in the 4-digit or 6-digit HSN, where the first two digits are correct and the tax rate mentioned is correct
- Error in one or two digits / characters of the vehicle number
If your case falls in this list, your MOV-07 reply should squarely cite Circular 64/38/2018-GST, demonstrate that the invoice and e-way bill are otherwise valid, that the correct tax was charged, and that there is no intent to evade — and request that the Section 129 proceedings be dropped with, at most, the ₹1,000 penalty under Section 125.
Common Triggers for Detention
- E-way bill expired in transit — even by a few hours (breakdowns, traffic diversions, driver rest). Note: Rule 138(10) allows the validity to be extended within 8 hours of expiry — transporters often miss this window.
- Part-B not filled — vehicle number missing or not updated after transhipment
- Vehicle number mismatch — goods moved in a different vehicle than declared
- Wrong document — delivery challan used where a tax invoice was required, or vice versa
- Undervaluation alleged — declared value below the officer's view of market value
- Wrong distance entered — validity computed short, causing expiry mid-journey
- No e-way bill at all — consignor assumed exemption that did not apply
Moving Your Own Machinery Between States — The "Distinct Person" Trap
A very frequent detention scenario: a business moves its own machinery, capital goods, or equipment from a branch in one state to a branch or project site in another state — no sale, no buyer — and the vehicle is detained for "movement without a tax invoice" or an e-way bill defect. Under GST, your branches in different states are distinct persons under Section 25(4) of the CGST Act, and the documentation depends on the nature of the movement:
| Nature of Movement | GST Treatment | Correct Documents |
|---|---|---|
| Permanent transfer of machinery / stock to a branch in another state | Supply between distinct persons under Schedule I — IGST payable even without consideration | Tax invoice (with IGST) + e-way bill |
| Temporary movement — equipment sent to own project site / for own use, to be brought back (e.g., cranes, rigs, machinery moved on own account) | Not a supply — per CBIC Circular 21/21/2017-GST, inter-state movement of goods like rigs, tools and machinery on own account (not for further supply) is not liable to IGST | Delivery challan under Rule 55 + e-way bill |
| Machinery sent for repairs to another state | Not a supply of the machinery (only the repair service is taxed by the repairer) | Delivery challan under Rule 55 + e-way bill |
| Goods sent for job work | Not a supply if returned within the Section 143 time limits | Delivery challan + e-way bill (+ ITC-04 reporting) |
Detentions in these cases usually happen because (a) the delivery challan was missing or incomplete, (b) the officer treats a temporary movement as a permanent Schedule I transfer and alleges evasion of IGST, or (c) the e-way bill was generated against the wrong document type. Your reply should establish the nature of the movement with evidence — asset register extracts, work orders or project contracts at the destination, a board/management note recording that the asset will return, and the delivery challan itself — and cite Circular 21/21/2017-GST where the movement is on own account.
How to Respond — Step by Step
Secure the Paperwork Immediately
Obtain copies of MOV-01, MOV-02, MOV-04, MOV-06 and MOV-07 from the driver / officer. Verify the detention is properly documented — the officer must record specific discrepancies, and the physical verification report (MOV-04) must be issued within 3 days. Note the exact ground stated in MOV-07; your entire reply is built around it.
Classify Your Case — Minor Error, Documentation Gap, or Substantive Dispute
If the defect is in the Circular 64/38/2018 minor-error list, your reply seeks dropping of Section 129 with only the ₹1,000 Section 125 penalty. If it is an own-goods / distinct-person movement, assemble evidence of the nature of the movement. If tax genuinely was payable, weigh paying the penalty for immediate release against contesting — demurrage and business loss often exceed the amount in dispute.
File Your MOV-07 Reply and Attend the Hearing
File a written reply (template below) on the portal / with the proper officer before the MOV-09 order is passed, and insist on the personal hearing guaranteed by Section 129(4). If release is urgent, simultaneously apply for provisional release under Section 129(1)(c) with a bond in MOV-08 and security — this frees the goods while the dispute continues.
Pay Under Protest or Appeal (APL-01)
If MOV-09 confirms the penalty and you need the goods released, you may pay under protest (record this in writing) and then appeal. An appeal against a Section 129(3) order lies to the Appellate Authority in Form APL-01 within 3 months, with a mandatory pre-deposit of 25% of the penalty. Payment of the penalty concludes the detention proceedings but does not bar the appeal if made under protest.
Reply Template — MOV-07 Show Cause Notice (Section 129)
Adapt the options below to the ground stated in your MOV-07. File before the MOV-09 order is passed, and keep every factual claim backed by an enclosure.
REPLY TO SHOW CAUSE NOTICE IN FORM GST MOV-07
UNDER SECTION 129(3) OF THE CGST ACT, 2017
To,
The Proper Officer,
[Designation and Mobile Squad / Circle as shown in MOV-07]
[State]
Subject: Reply to notice in Form GST MOV-07 dated [DATE] — detention of
goods and conveyance under Section 129, CGST Act, 2017
GSTIN of Consignor: [GSTIN]
Legal Name: [LEGAL NAME]
Invoice / Delivery Challan No.: [NUMBER], dated [DATE]
E-Way Bill No.: [EWB NUMBER]
Vehicle No.: [VEHICLE NUMBER]
MOV-06 Detention Order No. / Date: [NUMBER / DATE]
MOV-07 Notice No. / Date: [NUMBER / DATE]
Proposed Penalty: ₹[AMOUNT]
Respected Sir/Madam,
This reply is submitted against the notice in Form GST MOV-07 dated
[DATE] proposing penalty under Section 129(1) of the CGST Act, 2017 on
the ground that [REPRODUCE THE EXACT GROUND STATED IN MOV-07].
1. FACTS OF THE MOVEMENT
The goods under detention were being transported from [ORIGIN] to
[DESTINATION] under [tax invoice / delivery challan] No. [NUMBER] dated
[DATE] with e-way bill No. [NUMBER] generated on [DATE/TIME]. The
applicable tax of ₹[AMOUNT] was duly charged on the invoice [OR: the
movement is not a supply, as explained below]. All documents required
under Rule 138A were available with the person in charge of the
conveyance at the time of interception.
2. SUBMISSIONS ON THE ALLEGED DISCREPANCY
[OPTION A — MINOR / CLERICAL ERROR (Circular 64/38/2018-GST):]
The only discrepancy alleged is [e.g., an error in two characters of
the vehicle number / a spelling error in the consignee name / an error
in the PIN code]. The invoice and e-way bill are otherwise complete and
valid; the GSTIN, description, quantity, value and tax charged are all
correct, and the goods match the documents.
CBIC Circular No. 64/38/2018-GST dated 14.09.2018 specifically directs
that in such cases proceedings under Section 129 SHALL NOT be initiated,
and only a penalty of ₹500 under Section 125 of the CGST Act and ₹500
under the SGST Act may be imposed. The discrepancy alleged falls
squarely within clause [(a)/(b)/(c)/(d)/(e)/(f)] of paragraph 5 of the
said Circular, which is binding on the department.
It is therefore prayed that the proceedings under Section 129 be
dropped and the goods and conveyance be released forthwith.
[OPTION B — E-WAY BILL EXPIRED IN TRANSIT:]
The e-way bill was valid up to [DATE/TIME]. The vehicle could not
complete the journey within the validity period due to [breakdown /
traffic diversion / driver's rest mandated by law / natural cause],
as evidenced by [garage bill / toll receipts / FASTag log / RTO
records] (Annexure [X]). The expiry is a bona fide operational delay.
There is no allegation — and no material — of any intent to evade tax:
the invoice charges full tax of ₹[AMOUNT], the consignee is registered,
and the transaction is recorded in the books and GSTR-1 of the
consignor. Penalty under Section 129 is not warranted in the absence
of intent to evade; at worst the general penalty under Section 125 may
be considered.
[OPTION C — OWN GOODS / DISTINCT PERSON MOVEMENT (machinery for own use):]
The goods under detention are [MACHINERY / EQUIPMENT DESCRIPTION],
capital assets of the noticee, being moved from our [branch/office] in
[STATE] to our own [project site / branch] in [STATE] for [own use on
the project / repairs / temporary deployment]. The movement is NOT a
supply:
(a) The goods are being moved on our own account and will return to
the originating state on completion of [WORK/PURPOSE], as recorded
in [work order / project contract / management note] (Annexure [X]);
(b) CBIC Circular No. 21/21/2017-GST dated 22.11.2017 clarifies that
inter-state movement of goods such as rigs, tools, spares and
machinery on own account, not intended for further supply, is
neither a supply of goods nor of services and attracts no IGST;
(c) The movement was accordingly effected under delivery challan
No. [NUMBER] dated [DATE] issued under Rule 55 of the CGST Rules,
together with e-way bill No. [NUMBER] — the documents prescribed
for movement other than by way of supply;
(d) The asset appears in our fixed asset register (Annexure [X]) and
no consideration flows from any party for this movement.
There being no supply and no tax payable, there is no question of any
intent to evade tax, and the proposed penalty computed at 200% of
"tax payable" is without basis.
3. REQUEST FOR HEARING AND RELEASE
We request a personal hearing under Section 129(4) before any order is
passed. Without prejudice to the above, and purely to mitigate ongoing
business loss, we are willing to furnish a bond in Form GST MOV-08 with
security for provisional release of the goods and conveyance under
Section 129(1)(c), pending adjudication.
PRAYER
In view of the above, it is respectfully prayed that:
(a) The proceedings initiated under Section 129 be dropped;
(b) The goods and the conveyance bearing No. [VEHICLE NUMBER] be
released forthwith;
(c) A personal hearing be granted before any adverse order is passed.
Thanking you,
Yours faithfully,
[Authorised Signatory Name]
[Designation]
GSTIN: [GSTIN]
Mobile / Email: [CONTACT]
Date: [DATE] Place: [PLACE]
ENCLOSURES:
Annexure A: Copy of invoice / delivery challan and e-way bill
Annexure B: Copies of MOV-02, MOV-04, MOV-06 and MOV-07
Annexure C: [Evidence supporting your option — breakdown proof / asset
register / work order / Circular extracts]
Annexure D: [Any other relevant document]
After the Order — Payment, Release and Appeal
| Option | How | Effect |
|---|---|---|
| Pay penalty (with or without protest) | Payment via DRC-03 / portal as directed in MOV-09 | Goods and vehicle released; proceedings concluded. Record "under protest" in writing to preserve your appeal. |
| Provisional release | Bond in MOV-08 + security equal to penalty | Goods released while adjudication / appeal continues |
| Appeal against MOV-09 | Form APL-01 within 3 months, pre-deposit of 25% of penalty (proviso to Section 107(6)) | Appellate Authority re-examines the detention and penalty |
| Do nothing for 15 days | — | Goods and conveyance become liable to sale / disposal under Section 129(6) |
Confiscation (Section 130 / MOV-10 / MOV-11): Where the department alleges an intent to evade tax, it may initiate separate confiscation proceedings. These are more serious — fine in lieu of confiscation can extend to the market value of the goods. A Section 130 notice requires a distinct, carefully drafted defence — professional representation is strongly recommended.
Related GST Notices
Vehicle Detained? Every Hour Counts.
A 200% penalty for a two-digit vehicle number typo is not the law — but you must raise the right defence, in writing, before the order is passed. Our CA team can review your MOV-07, draft the reply, and guide the release process.