• Notification Date: 15-01-2024
• Notification No: N/A

DGGI Reveals Rs 198,324 Crore GST Evasion of 2023

The Directorate General of GST Intelligence (DGGI), the investigating agency for GST matters, has uncovered a staggering 6,323 cases of tax evasion amounting to Rs 198,324 crore in 2023, according to the department of revenue, Ministry of Finance.  

This revelation comes as a significant increase compared to the 4,273 cases and Rs 90,499 crore detected in 2022. The findings in 2023 led to the voluntary payment of Rs 28,362 crore in taxes, with 140 masterminds involved in GST evasion being apprehended. 

In addition to cases of straightforward tax evasion, the DGGI also identified 2,335 cases involving Input Tax Credit (ITC) fraud, amounting to Rs. 21,078 crore. The perpetrators of these frauds voluntarily paid Rs 2,642 crore in taxes, and 116 masterminds were arrested during the year. 

The DGGI's investigations exposed significant GST evasion across various sectors, including online gaming, casinos, insurance, secondment (salary of expat employees), and fake ITC. The Ministry of Finance issued a statement highlighting the potential threats these non-compliance activities pose to fiscal stability and the broader social, financial, and economic security implications. 

The online gaming industry faced a considerable setback, with the GST department serving tax demand notices of Rs 1.12 lakh crore to several companies. However, these demands are currently under litigation, as the online gaming sector and the revenue departments are at odds over the issue of taxation on online gaming. 

The insurance sector also came under scrutiny, with the GST department serving notices to multiple companies in 2023 over fake input tax credit claims. The magnitude of the detected cases emphasises the need for stringent oversight to curb malpractices within these sectors. 

On a related note, the Central Board of Indirect Taxes and Customs (CBIC) recently provided relief to multinational corporations (MNCs) regarding the taxation of salaries paid to expatriate employees.  

It clarified that the non-payment of GST on expat salaries is a matter of interpretation, urging tax authorities to exercise caution before issuing tax evasion notices to Indian subsidiaries of MNCs in connection with expatriate manpower deputed from abroad. 

As the government intensifies its efforts to curb GST evasion, these developments underscore the importance of proactive measures to ensure the integrity of the taxation system and protect the nation's financial interests.