The Central Board of Indirect Taxes and Customs (CBIC), through its GST-Investigation Wing, has issued Instruction No. 01/2026-GST dated August 03, 2026, vide F. No. GST/INV/Audit Report No. 7 of 2024/33/2024-25, laying down a structured mechanism for coordination between Central GST field formations and State Mining Authorities. The mechanism is aimed at facilitating the timely sharing and examination of information relating to illegal mining and illegal transportation of minerals.
The Instruction has been issued in the context of observations contained in the Draft Performance Audit Report of the Comptroller and Auditor General of India on “Assessment, Levy and Collection of GST on Minerals.” The report noted that State Mining Authorities regularly detect cases involving illegal mining, transportation of minerals without authorisation, seizure of minerals and vehicles, cancellation or suspension of mining leases, excess extraction of minerals and other violations of mining laws.
Such enforcement information may also have significant implications under the Central Goods and Services Tax Act, 2017. It may indicate suppression of taxable supplies, non-registration under GST, undervaluation of mineral supplies, non-payment or short payment of tax, wrongful availment of input tax credit and other violations of GST provisions.
CBIC observed that, in the absence of a structured and institutional mechanism for periodic exchange of information, valuable intelligence available with State Mining Authorities was not being systematically utilised by GST authorities for examining possible tax implications and initiating appropriate action.
Accordingly, all Principal Chief Commissioners and Chief Commissioners of CGST Zones have been directed to designate a Nodal Officer in each CGST Zone for coordination with the respective State Mining Department.
The CGST Zones will establish a mechanism with State Mining Authorities for the periodic sharing of information regarding cases of illegal mining and transportation of minerals detected within their respective jurisdictions. The information received will be suitably analysed to identify possible GST implications, and appropriate action will be initiated wherever warranted under the CGST Act, 2017 and the rules made thereunder.
The Instruction further provides that intelligence generated from such information should be disseminated, wherever necessary, to the jurisdictional Commissioners and formations of the Directorate General of GST Intelligence for further action. Periodic meetings will also be held with State Mining Authorities to review the effectiveness of the information-sharing mechanism and resolve operational issues.
CBIC has directed all field formations to circulate the Instruction among officers under their charge and ensure strict compliance. Any difficulty encountered in implementing the mechanism may be brought to the notice of the Board.
The initiative is expected to strengthen inter-agency coordination, improve the utilisation of mining-related enforcement intelligence and enable timely action against possible GST evasion associated with illegal mining and transportation of minerals.
The Instructions can be accessed at: https://taxinformation.cbic.gov.in/view-pdf/1000583/ENG/Instructions
