GST officials used data analytics to detect tax credit fraud
According to an official update, officials from the Central Goods and Services Tax (CGST) in Alwar, Rajasthan, have discovered a case of input tax credit (ITC)-related fraud involving more than 5,500 crore on the basis of data analytics.
In a letter to field officers published on the website of the tax authority, the Central Board of Indirect Taxes and Customs (CBIC) stated that the development was proof of the effectiveness of a data-driven approach.
According to the communication approved by CBIC chairperson Vivek Johri, the entire credit has subsequently been reversed.
It also stated that CGST officials in Delhi discovered a case involving the use of more than 53 crores worth of inadmissible input tax credits without the receipt of services. So far, this case has recovered a total of 15 crore. Additionally, the email stated that Delhi-based GST officials found instances of over 102 crores worth of inadmissible tax credits.
The Directorate of Revenue Intelligence (DRI) has discovered a case of deliberate misdeclaration in the description of some products imported for use in the production of mobile phones, which resulted in the avoidance of customs duty. According to the report, this led to the improper use of duty exemption advantages of more than 2217 crores. A showcase notice has been published when the investigations were finished. The notification stated that a total of 60 crore had been recovered in the case.
The tax authorities has increased its use of tech-enabled data mining over the past few months to spot suspicious transactions and stop abuse of the tax credit system. Additionally, it has increased revenue collections and reduced tax avoidance. The second-highest monthly revenue collection in the first five years of the new indirect tax system came from the central and state governments’ collection of approximately 1.49 trillion in GST income.