Govt to integrate data repositories to curb GST evasion, fraud

The Central Board of Indirect Taxes and Customs (CBIC) is considering merging its existing DG (Systems) database with that of the Goods and Services Tax Network (GSTN) to enhance its coverage of taxpayer activities and crack down on tax evasion, a senior official informed FE. “Starting from the first week of June, CBIC is likely to make GSTN the primary database,” the official stated.

Currently, the GSTN serves as the front-end of the GST-IT ecosystem, while DG (Systems) handles back-end functions like tax administration. “After June, GSTN will also serve as the back-end,” the official added.

This merger is primarily aimed at curbing tax evasion. In the fiscal year 2024, the Directorate General of GST Intelligence (DGGI) unearthed over 6,074 cases of duty evasion amounting to Rs 2.01 trillion, approximately 10% of the total GST collection for that year. Additionally, voluntary payments totaled Rs 26,598 crore, contributing about 1.4% to the total GST collections. In the previous fiscal year, 4,872 cases of GST evasion involving Rs 1.01 trillion were detected, with voluntary payments amounting to Rs 20,713 crore.

According to an expert, merging GSTN and DG (Systems) will facilitate a seamless flow of taxpayer data within a unified setup, simplifying the detection of tax fraud.

GSTN serves as the interface between taxpayers, the Center, and states, maintaining the common GST electronic portal and facilitating registration, return filing, and IGST settlement. DG (Systems), on the other hand, focuses on integrating technology into departmental processes and providing data support to CBIC and field formations.

The official mentioned that the merger will enhance coordination between CGST and SGST officers, enabling better tracking of tax evaders.

Another expert highlighted that unified access to comprehensive data will enable more effective monitoring, advanced analytics, and coordinated enforcement actions, leading to improved tax compliance and reduced evasion.

Moreover, as DG (Systems) also manages IT systems for customs operations, including data management for import and export activities, the merger will enhance transparency in cross-border transactions, aiding in the identification of tax evasion.

Source: Financial Express