GST Intelligence gets centre's nod to set up five digital forensic labs to foil tax evaders

In a bid to tighten the noose on tax evaders, the Central Board of Indirect Taxes and Customs (CBIC) has given the approval to set up five digital forensic laboratories in the Directorate General of GST Intelligence (DGGI), the CBIC chairman has informed in a letter to GST officers

“With deep penetration of information technology, adoption of automated accounting systems, and proliferation of devices on which data may be stored by business, it is imperative for us to have the requisite physical infrastructure, skill sets, know-how and ability to be able to access data from those systems/devices and to be able to decrypt, decipher, and at times even debug it for carrying out investigations,” the CBIC chairman said in the letter, adding that setting up such laboratories in-house would address this need and lend a firmer footing to the investigations.

With better technology and tools available, the GST department has been able to detect thousands of crores in tax evasion over the last couple of years leading to a much-improved tax collection.

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The DGGI has detected tax frauds of more than Rs. 54,000 crore in 2021-22 and recovered more than Rs. 21,000 crore of such evaded tax.

DGGI sources say that the agency has unearthed a number of ways by which tax evasion was being done. Those include short payment of tax by undervaluing taxable goods and services, wrong availment of exemptions, wrong availment of the input tax credit, etc.

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Due to measures adopted by the GST department against tax evasion, the GST collections in 2021-22 rose 20% from pre-pandemic levels (in 2019-20) to Rs 14.76 lakh crore. This year, going by the trend, the total GST collection will likely cross Rs 18 lakh crore in 2022-23.