Parlimentary panel asks revenue dept to conduct 'ground reality' check on physical check-posts

New Delhi: A Parliamentary committee on Monday asked the revenue department to "ascertain the ground reality" by taking up with the concerned state governments on instances of state police, commercial tax departments and highway authorities continuing to operate physical check-posts, causing avoidable inconvenience to the movement of goods.

The standing committee on Finance's 'Action Taken Report' of the revenue department, tabled in the Lok Sabha, emphasised that unauthorised physical check-posts and routine vehicle interceptions defeat the core premise of Goods and Services Tax (GST) as a seamless, barrier-free national market.

The committee pulled up the revenue department for not "explicitly mentioning" whether follow-up action was taken to verify these instances with the state governments or whether the matter was brought before the GST Council, as recommended by the committee.


The committee noted that the ministry, in its reply, has merely explained the existing legal provisions under the GST framework and technological tools, rather than addressing the ground reality of unauthorised physical check-posts.

"The committee, therefore, expects the department of revenue to take up the matter with the concerned state governments to ascertain the ground reality and, if required, bring it to the notice of the GST Council for systemic resolution, and strengthen portal reporting mechanisms to protect transporters from transit delays. The action taken details in this regard may be furnished in the Final Action Taken Statement," the committee said in its report.

The committee, in its report earlier in March, had asked the revenue department to address instances where state-level police, commercial tax departments and highway authorities continue to operate physical check-posts, which causes transit delays and may lead to avoidable inconveniences and irregularities. This is contrary to the core premise of the GST regime to create a seamless, barrier-free national market.

"The committee strongly recommends that the issue may be taken up at the appropriate level so that the GST Council may take immediate cognizance of this issue. They also desire that the central government must coordinate with state governments to address the issue of unauthorised physical check-posts for ensuring the seamless movement of goods and the effective implementation of the GST regime across the country," the Standing Committee on Finance, chaired by Bhartruhari Mahtab, had said in its report tabled in Parliament on March 12.

In the Action Taken Reply the Ministry of Finance (department of revenue) has submitted that GST was introduced with the aim to replace physical barriers/check posts.

The provisions for transit checks of goods are governed by Section 68 of the CGST Act wherein interception is allowed only by "proper officer". Further, technology-based enforcement measures like e-way bill system and RFID are already in place which rule out the requirement of such physical checkposts, the revenue department said in its reply to the panel.