Section 130 is the most severe consequence for goods: confiscation. It requires intent to evade, or unaccounted goods, or supply without registration, and the owner can redeem the goods by paying a fine.
Key points
- Under section 130(1) of the CGST Act, 2017 goods or conveyances are liable to confiscation, and the person to penalty under section 122, where the person supplies or receives goods in contravention with intent to evade tax, does not account for goods on which tax is payable, supplies taxable goods without applying for registration, contravenes the Act with intent to evade, or uses a conveyance in contravention (unless the owner proves lack of knowledge).
- The owner must be given the option to pay a fine in lieu of confiscation, not exceeding the market value less tax; the aggregate of fine and penalty must be at least 100% of the tax payable (section 130(2), as amended from 01.01.2022).
- A conveyance used for hire may be redeemed on a fine equal to the tax on the goods (third proviso).
- No order without a hearing; on confiscation title vests in the Government (section 130(4)–(5)).
The provisions
130(1)–(7)Confiscation and fine in lieu
Statutory text
(1) 1[Where] any person-
(i) supplies or receives any goods in contravention of any of the provisions of this Act or the rules made thereunder with intent to evade payment of tax; or
(ii) does not account for any goods on which he is liable to pay tax under this Act; or
(iii) supplies any goods liable to tax under this Act without having applied for registration; or
(iv) contravenes any of the provisions of this Act or the rules made thereunder with intent to evade payment of tax; or
(v) uses any conveyance as a means of transport for carriage of goods in contravention of the provisions of this Act or the rules made thereunder unless the owner of the conveyance proves that it was so used without the knowledge or connivance of the owner himself, his agent, if any, and the person in charge of the conveyance,
then, all such goods or conveyances shall be liable to confiscation and the person shall be liable to penalty under section 122.
(2) Whenever confiscation of any goods or conveyance is authorised by this Act, the officer adjudging it shall give to the owner of the goods an option to pay in lieu of confiscation, such fine as the said officer thinks fit:
Provided that such fine leviable shall not exceed the market value of the goods confiscated, less the tax chargeable thereon:
Provided further that the aggregate of such fine and penalty leviable shall not be less than the 2[penalty equal to hundred per cent. of the tax payable on such goods]
Provided also that where any such conveyance is used for the carriage of the goods or passengers for hire, the owner of the conveyance shall be given an option to pay in lieu of the confiscation of the conveyance a fine equal to the tax payable on the goods being transported thereon.
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(4) No order for confiscation of goods or conveyance or for imposition of penalty shall be issued without giving the person an opportunity of being heard.
(5) Where any goods or conveyance are confiscated under this Act, the title of such goods or conveyance shall thereupon vest in the Government.
(6) The proper officer adjudging confiscation shall take and hold possession of the things confiscated and every officer of Police, on the requisition of such proper officer, shall assist him in taking and holding such possession.
(7) The proper officer may, after satisfying himself that the confiscated goods or conveyance are not required in any other proceedings under this Act and after giving reasonable time not exceeding three months to pay fine in lieu of confiscation, dispose of such goods or conveyance and deposit the sale proceeds thereof with the Government.
* Enforced w.e.f . 1st July, 2017 .
1. Substituted (w.e.f. 1st January, 2022 vide Notification No. 39/2021-C.T., dated 21st December, 2021) by s. 118(a) of The Finance Act, 2021 (No. 13 of 2021) dated 28th March, 2021 for "Notwithstanding anything contained in this Act, if".
2. Substituted (w.e.f. 1st January, 2022 vide Notification No. 39/2021-C.T., dated 21st December, 2021) by s. 118(b) of The Finance Act, 2021 (No. 13 of 2021) dated 28th March, 2021 for "amount of penalty leviable under sub-section (1) of section 129".
3. Omitted (w.e.f. 1st January, 2022 vide Notification No. 39/2021-C.T., dated 21st December, 2021) by s. 118(c) of The Finance Act, 2021 (No. 13 of 2021) dated 28th March, 2021 for "(3) Where any fine in lieu of confiscation of goods or conveyance is imposed under sub-section (2), the owner of such goods or conveyance or the person referred to in sub-section (1), shall, in addition, be liable to any tax, penalty and charges payable in respect of such goods or conveyance."
Statutory text as published on the CBIC tax information portal, as on 03.10.2026; the numbered notes record each amendment. Official source
Common questions
- When can GST officers confiscate goods?
- Under section 130 of the CGST Act, where goods are supplied or received with intent to evade tax, are unaccounted, or are supplied without registration; the owner must be offered a fine in lieu of confiscation.
Commentary and case notes checked against the judgments and CBIC sources on 04.10.2026.
What it means
Since 01.01.2022 section 130 is independent of section 129: goods detained in transit are dealt with under section 129, and confiscation needs its own grounds and notice (Form MOV-10). "Intent to evade" in clauses (i) and (iv) must be shown on material; unaccounted stock found during inspection is the common ground under clause (ii).