FM calls for clarity on classification-related issues under GST at the earliest

In a significant move towards fortifying the Goods and Services Tax (GST) system, Finance Minister Nirmala Sitharaman addressed the first National Conference of Enforcement Chiefs from the State and Central GST formations on Monday, March 4. Emphasising the urgency of addressing classification-related issues, the FM stressed the need for issuing clarity through appropriate channels for GST taxpayers at the earliest.

During the conference, Sitharaman urged all GST formations to leverage technology as a means to plug loopholes in the system, emphasising that better technology would lead to enhanced taxpayer services. The Finance Minister underscored the pivotal role of innovation, advocating for the sharing of emerging best practices and seamless coordination across states in the national interest.

Highlighting the importance of regular meetings among enforcement chiefs of the Centre and states, Sitharaman encouraged authorities to utilise this platform for discussing obstacles, exchanging successful strategies, and collectively advancing towards a more robust and harmonious tax infrastructure.

Commending the tireless efforts of both Centre and States GST formations since 2017 in making GST a reliable and goal-oriented system, Sitharaman urged GST officials to engage with stakeholders to understand their concerns, enhance compliance, streamline processes, and work collaboratively towards making the tax system more transparent and efficient.

The conference saw in-depth discussions on GST evasion typologies, preferred methods, and prevalent sectors. Participants emphasised the importance of collaborative efforts, the need to utilise technology effectively, and proactively preventing fraudulent behavior by identifying high-risk taxpayers.

In another revelation, data presented by the GST Council Secretariat showed that the nationwide crackdown on fake registrations and bogus billing from May 2023 alone has resulted in the detection of Input Tax Credit (ITC) tax evasion amounting to ₹49,623 crore, involving 31,512 bogus firms.

The Central Board of Indirect Taxes and Customs (CBIC) further reported detecting fake ITC evasion of ₹1,14,755 crore from the year 2020 till date. This underscores the critical need for continued vigilance and collaborative efforts to ensure the integrity of the GST system.