Govt looking to tighten GST leakages after Nirmala Sitharaman's message

The government is looking at further tightening goods and services tax (GST) leakages, according to people in the know. This comes after Finance Minister Nirmala Sitharaman said that India should look at better compliance via system generated alerts to tighten the leakages in the tax system.

The Central Board of Indirect Taxes and Customs (CBIC) is looking at the further tightening of GST tax leakages through system-generated alerts, which is a continuous drive of  the Directorate General of GST Intelligence (DGGI) and DG Systems. Together, they have devised new tools, which will be used for curbing tax leakages in the future.

DGGI and field formations, together, have detected around Rs 52,000 crore of tax leakages since GST's inception till April 1, 2022. Of these, tax evasions of Rs 48,000 crore were only on account of fake invoices and irregular IT claims. The new tools are being adopted to curb the same.

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This entire detection involved around 20,000 GST tax registrants or taxpayers, so further tightening will occur on these leakages.

CBIC will soon introduce a mandatory quarterly scrutiny exercise of the monthly returns that people file under the GST system. It will be aimed at better compliance and enhancement of GST collections. Some of the measures/SOPs that CBIC has directed to field formations include using business intelligence and other enterprise data, which is available with the department to run the quarterly scrutiny exercise.