Anisha Kumari | Jun 11, 2025 |
CGST Scanner on Rs. 1,032 Crore GST Refund Scam in Sikkim
The Central Goods and Services Tax (CGST) department has reopened the assessment of several manufacturing companies based in Sikkim. These companies are under investigation for wrongly claiming GST refunds worth around Rs. 1,032 crore.
This issue is linked to the Scheme of Budgetary Support, 2017. The launch of this scheme took place after the GST system came into force. Before this, businesses in hilly and backward regions like Sikkim were getting full tax exemptions under the Central Excise Area-Based Exemption Scheme. The government started giving partial tax refunds to support them based on the company’s “value addition”. Value addition means how much value a company adds to raw materials to make the final product.
Many companies in Sikkim are suspected of misusing this support. As per the CGST department, some of the large companies claimed much higher refund amounts than what they were allowed. They reported increased the number of value additions in their calculations which is not allowed under the scheme’s rules.
The Siliguri CGST Commissionerate told this fraud was discovered through reliable intelligence reports. Officials found many businesses including some well-known names claimed extra GST refunds which were not in line with the official limits during the investigation. Even, a few companies accepted that they took refunds at higher rates than what was notified by the government during the questioning.
Officials said that a detailed check audit is going on. They are going through the records of these companies with full attention. The companies will have to return the extra money if the investigation confirms the wrongdoing. They may also have to pay penalties and could even face legal action under the GST law.
This case shows that better checks and strict rules are needed very much to stop such misuse of government scheme. The main goal of the Budgetary Support Scheme was to help industries in backward areas. The purpose of the scheme is lost if companies start taking unfair advantage. The CGST department has said it will continue its audits and take action against all those found guilty.
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