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Treatment of goods released after payment of tax and penalty us 130(2) cgst

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Uttam Bohra

Proprietor

22 Points Posted on 25 February 2022

i have purchased some goods which were in transit and were detained and demand was created us 129(1) and the payment was made

My queries are

1 How to treat tax and penelty deposited as per the demand

2 Can i adjust the tax paid under demand with my output liabilities on sale of such good

3 Accounting of Demand 5000 Tax and 5000 penalty

Replies (1)

Aashok Kumar Sharma

Finance/Compliance Consultant

75671 Points Posted on 01 July 2026

Tax paid under Section 129(1) for detained goods should be accounted for as a "Deposit Under Protest" (asset) and the penalty as an expense in your books. You cannot directly adjust this tax against your routine output liability in GSTR-3B; if the tax demand is disputed, you must seek legal recourse through the appellate process to claim a refund or adjustment.