On March 4, Union Minister for Finance and Corporate Affairs, Smt. Nirmala Sitharaman, inaugurated the National Conference of Enforcement Chiefs of State and Central GST Formations in New Delhi. The conference aimed to enhance understanding and streamline operations of tax authorities in enforcement actions across different indirect tax agencies.
Accompanying Smt. Sitharaman were Union Minister of State for Finance, Shri Pankaj Chaudhary, Secretary of the Department of Revenue, Shri Sanjay Malhotra, Chairman of the Central Board of Indirect Taxes and Customs (CBIC), Shri Sanjay Kumar Agarwal, along with other senior officials from the Department of Revenue, GST Enforcement Chiefs from states and central authorities, and representatives from various enforcement agencies.
In her address, the Union Finance Minister praised the continuous efforts of both central and state GST formations since 2017 in strengthening the GST system through technology integration. She urged GST formations to utilize technology to address loopholes and improve taxpayer services, emphasizing the importance of sharing emerging best practices and promoting seamless coordination among states.
Smt. Sitharaman underscored the necessity of regular meetings among enforcement chiefs to address obstacles, share successful strategies, and enhance the overall tax infrastructure. She also emphasized the need for swift resolution of classification-related issues through appropriate channels.
Highlighting the achievements of the past decade under Prime Minister Shri Narendra Modi's leadership, she emphasized the possibility of cleansing and improving systems through persistent efforts. Smt. Sitharaman encouraged GST officials to engage with stakeholders, enhance compliance, streamline processes, and collectively work towards a more transparent and efficient tax system.
Commending the organization of the conference, Shri Chaudhary remarked that it would streamline issues related to indirect tax enforcement and foster the development of strategies to tackle upcoming challenges through collaborative brainstorming.
Praising GST as a significant reform in India, Shri Chaudhary noted its role in simplifying indirect taxation and reducing the effective tax rate, thereby improving people's lives. He urged GST formations to focus on facilitating more taxpayers and acknowledged the substantial increase in GST collections.
Shri Chaudhary credited the leadership of the Prime Minister and Finance Minister for India's economic progress, from being one of the "fragile five" in 2014 to a top performer now. He expressed confidence in achieving a monthly GST revenue target of Rs. 2 lakh crore soon.
In his address, Revenue Secretary Shri Sanjay Malhotra stressed the vital role of enforcement in ensuring the success of the GST system. He outlined key priorities such as targeting high-risk areas, combating tax evasion, balancing enforcement with taxpayer rights, enhancing collaboration between central and state authorities, and gathering feedback for policy and technological improvements.
CBIC Chairman Shri Sanjay Kumar Agarwal contextualized the conference, highlighting the threat of fake entities and GST evasion to national revenue and fair competition. He emphasized the importance of robust data analytics, technology utilization, and staying ahead of GST evasion perpetrators. Additionally, he reminded officers to adhere to CBIC instructions regarding enforcement procedures.
In his welcome address, the Additional Secretary of Revenue emphasized the unique potential of this platform for fostering collaboration and sharing best practices among GST enforcement authorities at both the central and state levels.
Throughout the one-day conference, various presentations were delivered by GST formations. According to data from the GST Council Secretariat, the nationwide crackdown on fake registrations and bogus billing since May 2023 has uncovered ITC tax evasion amounting to Rs. 49,623 crore involving 31,512 bogus firms. Additionally, CBIC reported detecting fake ITC evasion totaling Rs. 1,14,755 crore from 2020 to date.
Maharashtra State GST showcased its real-time monitoring dashboard for suspected non-genuine taxpayers (NGTPs), revealing that as of February 29, 2024, 41,601 suspected NGTPs were identified, with 6,034 detected. The detection was based on various intelligence sources, including registration data, e-way bills, and inputs from CBIC and other states, with outlined steps to enhance early-stage detection rates.
During thematic sessions, delegates from both central and state GST formations engaged in in-depth discussions on various issues, including GST evasion typologies, preferred methods, prevalent sectors, collaborative efforts' significance, and the effective utilization of technology to detect and prevent fraudulent behavior proactively.
Participants also deliberated on combating fake invoicing and associated issues such as money laundering, identity theft, and circular trading. Best practices and deterrent actions implemented by the Directorate General of GST Intelligence were shared.
The conference also addressed legal and operational challenges faced by enforcement authorities while minimizing disruptions for businesses. Emphasis was placed on CBIC and DGGI's instructions advocating for a more taxpayer-friendly approach to GST enforcement, prioritizing evidence-based inquiries over unnecessary audits concerning prevalent trade practices, considering location convenience, and formal information requests through letters rather than summons.
The conference, attended by GSTN and DG Systems from CBIC, discussed a range of analytical tools for detecting risky taxpayers and combating GST evasion. They also focused on streamlining these tools for broader accessibility among GST enforcement units.
DG Analytics and Risk Management demonstrated a risk analytical tool to identify potential GST evaders early in the cycle, even before their first return filing. Gujarat highlighted the success of GST Seva Kendras in reducing fake registrations, citing a recent case where 20 individuals were arrested under the Gujarat Control of Terrorism and Organised Crime Act, 2015.
Karnataka highlighted unique case typologies such as bill trading in the services sector and misclassification of mild steel scrap. West Bengal emphasized the benefits of establishing a cyber forensic lab to aid in investigating GST frauds. Uttarakhand, Sikkim, and Andhra Pradesh shared their best practices in GST enforcement.
The conference facilitated experience sharing and knowledge transfer between states and the central government, reviewing past enforcement actions and exploring future work areas for tax enforcement officers.
Due to positive feedback, it was decided to hold the National Conference of Enforcement Chiefs of State and Central GST Formations bi-annually from now on.
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