GST Officer Raid on Godown | Unregistered Purchases vs Unexplained Stock | GST Section 125 Penalty

A GST officer enters a dealer’s godown and finds a large stock of goods. On inspection, the officer immediately suspects a mismatch between physical stock and books of accounts. But what happens next changes the entire case interpretation.

The dealer explains that he deals in bangles and a significant portion of purchases are made from unregistered sources without proper invoices, along with some purchases from registered dealers. This raises a critical legal question under GST law — is this an “unexplained stock” case or simply “unverified/unexplained purchases”?

In this video, we break down a real-world GST scenario where the officer initially tries to raise a tax demand due to stock mismatch. However, legally, if the stock in books matches and only purchase documentation is missing, it does NOT automatically become “unexplained stock.”

Instead, such cases fall under unverified or unexplained purchases, which may attract a penalty under Section 125 of CGST Act, but not direct tax demand on entire stock.
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Видео GST Officer Raid on Godown | Unregistered Purchases vs Unexplained Stock | GST Section 125 Penalty канала GstGuy