GST Evasion of Rs 34,000 Crore: Nirmala Sitharaman Expresses Concern

Her direction came after the finance ministry’s two-day conclave of field officers in the national capital, which ended here with a directive to top officials of CBIC to address gaps in GST enforcement. “Over Rs 34,000 crore in GST evasion was detected in the financial year 2024, but recoveries remain low. However, she issued a five-point directive to improve compliance, recovery, and departmental integrity,” the source said.

As per the GST audit data, it is, however, learnt that major metro cities and some tier II cities are under the lens. “The highest cases of tax evasion were recorded in all capital cities like Chennai, Mumbai, Bengaluru, and Hyderabad and others that account for a large share of the country’s formal and informal economic activity,” the source said.

In the two-day conclave, the finance minister in her interaction directly with senior field officers and zonal chiefs also made it clear that both enforcement and taxpayer facilitation must go hand-in-hand. During the interaction, Sitharaman also stressed the need to make the GST registration process easier, seamless, and more transparent for taxpayers, with the use of technology and risk-based parameters.

Emphasising taxpayer trust, the finance minister also called for a targeted and sustained focus on grievance redressal, ensuring the timely resolution of queries and complaints through improved systems and accountability. “The CBIC was also urged by the minister to expedite the processing of GST and customs refunds to ensure timely redressal and ease of doing business, especially for MSMEs and exporters,” said the finance ministry’s statement.

“There is a need for the speedy closure of investigations for customs & CGST cases, and exhorted for an analysis on detection and recovery and to seek solutions to reduce the gap between detection and recovery. At the same time, there is also the need for preventing tax evasion and wrongful input tax Credits (ITC) claims,” she said in the statement.

As far as her five-pont directive to CBIC is concerned, an official source said, she directed the officers to enhance follow-ups post-detection and speed up the recovery process. “Secondly, customs departments across land, sea, and airports were asked to streamline cargo movement to support trade and logistics. Thirdly, officials need to identify regions with high cash-based transactions and work to bring them into the formal economy. Besides, they need to ensure departmental Integrity and improve the taxpayer interface,” she said.