In a significant move to enhance tax compliance, the Directorate General of GST Intelligence (DGGI) has issued over 20,000 notices across India for assessment years 2017-18 to 2021-22. The total tax demand from these notices is estimated to exceed Rs 80,000 crore, highlighting the government's stringent approach towards curbing tax evasion and ensuring compliance under the GST regime.
The notices, issued under Section 74 of the Central GST Act, primarily address alleged shortfalls in tax payments, discrepancies in input tax credit (ITC) claims, and the interpretation of specific legal provisions. The majority of these notices were time-sensitive, particularly those for AY 2017-18, which were required to be sent before the deadline of August 5, 2024. Final orders are expected to be issued by February 5, 2025.
An official familiar with the matter explained that these notices might involve pre-GST issues, which could potentially transition into GST-related cases based on the responses from the companies involved. The deadline for issuing notices for AY 2018-19 is June 30, 2025, indicating that further scrutiny and assessments are on the horizon.
The sectors under scrutiny include foreign airlines, shipping companies, insurance firms, online gaming companies, and information technology entities, among others. The increased use of e-invoices for B2B transactions, enhanced data collection, and digitized payment systems have played a crucial role in aiding tax authorities in their compliance efforts.
To ensure uniformity in GST notices and audits, the Central Board of Indirect Taxes and Customs (CBIC) has issued guidelines, instructing zonal chief commissioners to consult GST policy experts when faced with interpretative challenges. Despite these measures, a significant portion of the notices issued pertain to fraudulent ITC claims. In response, the GST department has launched a special drive to identify and eliminate fake registrations, uncovering approximately 1.2 trillion rupees in tax evasion cases and marking 59,000 entities for verification.
The DGGI's actions underscore the government's commitment to maintaining the integrity of the GST system and ensuring that businesses across sectors comply with tax laws. Taxpayers are advised to review their filings and address any discrepancies promptly to avoid penalties or further legal action.
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