CBIC directs CGST zones to track illegal mining, curb tax evasion

Synopsis

Central tax authorities are taking proactive measures by partnering with state mining departments to address the issue of illegal mineral extraction and transportation. This collaboration will involve setting up a comprehensive information-sharing system across all CGST areas. This directive is a result of a CAG report identifying critical gaps in intelligence sharing, with the goal of significantly reducing tax evasion in the mining sector.

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New Delhi: The Central Board of Indirect Taxes and Customs (CBIC) has directed all central goods and services tax (CGST) zones to establish a formal information-sharing mechanism with state mining departments to track illegal mining and transportation of minerals and to curb tax evasion in the mining sector.

The move is expected to strengthen GST enforcement in the mining sector, where tax authorities have long suspected revenue leakages due to illegal extraction and movement of minerals.

As per the instructions, every CGST zone will appoint a nodal officer to coordinate with the respective state mining department. The field formations have also been directed to establish a periodic intelligence-sharing mechanism, analyse violations for GST implications, disseminate actionable intelligence to jurisdictional commissionerates and the Directorate General of GST Intelligence, and hold regular review meetings with state authorities. The instructions were circulated earlier this week to all principal chief commissioners and chief commissioners of CGST for immediate compliance. The directive, issued by the GST investigation wing, comes after the Comptroller and Auditor General (CAG), in its draft performance audit on GST on minerals, flagged the absence of an institutional framework for sharing intelligence on illegal mining with GST authorities.