In a major push to curb GST evasion, the Directorate General of GST Intelligence (DGGI) claims to have detected 6,074 cases involving evasion of duty amounting to ₹2,01,931 crore, top sources told CNBC-TV18. This marks a staggering 99% surge in the year-on-year (YoY) detection of tax evasion compared to the amount of duty evasion detected by the investigation arm of the tax authority.
Upon detection of evasion, taxpayers voluntarily paid ₹26,598 crore, marking a 28.4% increase in these payments compared to the previous year, sources said. In the fiscal year 2023–24, DGGI arrested 147 individuals considered masterminds behind tax evasion, they added.
In the preceding fiscal year 2022-2023, DGGI had detected 4,872 cases, involving duty evasion amounting to ₹1,01,354 crore, with taxpayers voluntarily paying ₹20,713 crore and 92 arrests made, sources added, sharing the last year's report card of DGGI.
Sources suggest that the tax evasion of over ₹2 lakh crore detected represents approximately 10% of the total GST collections in the previous financial year.
They further indicated that out of the total evasion detected, taxpayers voluntarily contributed ₹26,598 crore, which accounts for about 1.4% of the total GST collections for FY 2023–24.
"The Directorate General of GST Intelligence (DGGI), which is the premier investigating agency for GST matters, in FY24, investigated matters on diverse sectors, post which the internal analysis highlighted that the top sectors where maximum evasion was recorded included— banking, financial services and insurance, pharmaceuticals, e-commerce operators, secondment (import of manpower services), online gaming, and casinos, among others," sources added.
To curb the claims of fake input tax credits (ITC) during FY24, DGGI continued its special drives against ITC fraudsters to plug the revenue leakages through the system.
"DGGI's annual performance report card highlights that it detected 2,197 cases involving ITC fraud of ₹21,089 crore and during the investigation, the taxpayers caught with the offence decided to voluntarily pay ₹2,577 crore. As many as 113 masterminds were arrested to check the menace of fake invoicing," sources added.
This marks a more than 60 % increase on a YoY basis. In FY23, DGGI unearthed 1,940 cases leading to detection of ₹13,175 crore, resulting in voluntary payment of ₹1597 crore and arrested 68 masterminds, on fake invoicing cases, sources said.
Sectoral detection
"According to the yearly analysis, major sectors where GST evasion was the highest and got detected were the online gaming and casino industry, which according to DGGI, evaded ₹83,588 crore followed by co-insurance or re-insurance sector, where government detected ₹16,305 crore of evasion. Other sectors where DGGI claims to have identified evasion are from secondment (import of manpower services) with ₹1,064 crore of detection," sources said.
The future course of action
"For the coming fiscal year, DGGI has asked all the field formations and jurisdictions to undertake efforts and continue investigations within the country and also focus on initiating investigations with respect to offshore online gaming entities, wherein entities that do not comply with GST law will be identified and scrutinised," sources told CNBC TV18.
"Exploiting emerging technologies like ‘Big Data Analytics’ and ‘Artificial Intelligence’ has helped DGGI ramp up its technical capabilities apart from its existing infrastructure in cyber forensics. DGGI is also setting up five digital forensic laboratories in Gandhinagar, New Delhi, Kolkata, Mumbai and Chennai which will help strengthen technical resources. This is aimed at further enhancing the agency's efforts in curbing tax leakage," sources added.
