The Directorate General of GST Intelligence (DGGI) is set to wrap up its investigations into pre-GST tax evasion cases, which predominantly pertain to service tax and central excise. An official source confirmed that the DGGI, which has investigated nearly 300 cases over the past year, plans to disband the unit dedicated to these cases by March 2024. The cases probed so far, largely from the power, automobile, and infrastructure sectors, have uncovered tax evasion worth over ₹5,000 crore, with recoveries of a few hundred crores made to date.
The DGGI, formerly known as the Directorate General of Central Excise Intelligence (DGCEI) before the implementation of GST in July 2017, was the apex intelligence wing under the Central Board of Indirect Taxes and Customs (CBIC), tasked with tracking excise and service tax evasion across India. Less than 60 cases remain under investigation, with some awaiting court resolutions.
Sector-based tax issues, such as those involving construction services, liquidated damages in infrastructure contracts, and redevelopment projects, have been central to these probes, according to tax experts. Certain cases involve large evasion amounts, with individual instances exceeding ₹500 crore.
Experts also warn businesses to review any new show-cause notices related to the pre-GST era carefully, as the limitation period for issuing such notices may have expired. With COVID-related extensions, some notices may still be valid, but others could be dismissed on limitation grounds.
In FY24, the DGGI detected 6,084 cases of GST evasion, amounting to ₹2.01 lakh crore. The sectors most prone to evasion include online gaming and banking, financial services, and insurance (BFSI). Notably, ₹81,875 crore of evasion was detected in the "real money online gaming" sector alone, highlighting the growing concern in this industry.
This ongoing investigation and increased vigilance demonstrate the DGGI's commitment to addressing both historical and current tax evasion cases.
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