In order to curb GST evasion, the Central Board of Indirect Taxes & Customs has instructed its filed formation to have a structured co-ordination with state authorities on sharing information related to illegal mining and transportation of minerals.
“Timely sharing of information relating to illegal mining and transportation of minerals would facilitate identification of cases involving possible suppression of taxable supplies, non-payment or short payment of GST, wrongful availment of input tax credit and other violations of the provisions of the Central Goods and Services Tax Act, 2017,” the board said in an instruction to its field formation.
This instruction will lead to the cross-departmental data sharing between CGST formations, State Mining Authorities and tax administrations. Such an exercise would enable mining records to be compared with E-Way Bills, e-invoices and GST returns.
This instruction has been issued after Comptroller & Auditor General (C&AG) in its report, “Assessment, Levy and Collection of GST on Minerals” observed that State Mining Authorities detect numerous instances of illegal mining, illegal transportation of minerals, seizure of minerals and vehicles, cancellation/suspension of mining leases, excess extraction of minerals, and other violations under the mining laws.
The instruction asked all Principal Chief Commissioners/Chief Commissioners of CGST Zones to ensure that a Nodal Officer is designated in each CGST Zone for coordination with the respective State Mining Department. A mechanism will be established with the State Mining Authorities for periodic sharing of information relating to illegal mining and transportation of minerals detected within the jurisdiction.
“Information so received shall be suitably analysed for identification of GST implications and appropriate action shall be initiated wherever warranted under the provisions of the CGST Act, 2017 and the rules,” the instruction. Further, intelligence generated from such information is disseminated to the jurisdictional Commissionerates / DGGI formations, wherever necessary, for further necessar action. It also prescribed periodic meetings with the State Mining Authorities are held to review the effectiveness of the information-sharing mechanism and to resolve operational issues.
Letter from the CBIC emphasised that information detected by State Mining Authorities has potential implications under the Central Goods and Services Tax Act, 2017, as it may indicate suppression of taxable supplies, non-registration, undervaluation, non-payment or short payment of tax or other forms of GST evasion. The audit report further observed that there is presently no structured or institutional mechanism for periodic sharing of such information between the State Mining Authorities and the CGST field formations.
Consequently, valuable enforcement intelligence available with the State Mining Authorities is not being systematically utilised by the GST authorities for examination of possible tax implications and initiation of appropriate action under the GST law, the instruction said.
