New Delhi: The two-day brainstorming conclave of the Central Board of Indirect Taxes and Customs (CBIC) concluded on Friday with a strong message from Finance Minister Nirmala Sitharaman. In her address, the FM directed the board to fast-track pending vigilance cases, highlighting the urgent need to distinguish between honest and corrupt officers, and restore public faith in the tax administration.
The minister also raised serious concerns about low recovery rates of detected tax evasion, urging the department to shift its focus from mere detection to effective enforcement and recovery. Her remarks come in light of alarming data that shows a massive gap between evasion and actual collection.
Over ₹34,000 Crore GST Evasion Detected, But Recovery at Just ₹4,000 Crore
According to exclusive information sourced by CNBC-TV18, GST audit data for FY 2023–24 revealed that ₹34,000 crore worth of tax evasion was detected across India. However, the recovery made by the department stood at a mere ₹4,000 crore, amounting to less than 12% of the total.
This figure has raised red flags within the Ministry of Finance, particularly since this is the first time post-GST implementation that evasion investigations have crossed 10% of the total collection in a single year.
The cities with the highest reported tax evasion include:
- Chennai
- Mumbai
- Bengaluru
- Hyderabad
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This geographic concentration of tax leakage has prompted the CBIC to initiate a closer audit and compliance strategy for metro zones, where high-volume transactions and complex business structures may be enabling evasive practices.
FM Calls for Efficient Vigilance, Customs Reforms & Taxpayer-Centric Policies
In a candid appeal to CBIC officers, the Finance Minister underscored the need to resolve pending vigilance cases promptly. “Honest officers must be protected, and those found guilty must be punished swiftly. This will restore credibility in the system,” she stated.
Additionally, Customs officials were directed to:
- Speed up cargo clearances at airports, seaports, and land checkpoints
- Target high-cash transaction areas to bring them into the formal economy
- Enhance coordination between anti-smuggling units and GST intelligence
Sitharaman stressed that the credibility of the tax department was a crucial factor in boosting voluntary compliance. “There should be no doubt about the honesty and transparency of our institutions,” she added.
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Expanding the Tax Base & Improving Grievance Redressal
A key takeaway from the CBIC conclave was the renewed focus on Ease of Doing Business (EoDB) and grievance redressal mechanisms. The Finance Minister urged officers to sensitively address taxpayer issues and work on innovative strategies to expand the tax base.
This includes:
- Proactive engagement with small and medium enterprises
- Reducing procedural delays
- Improving responsiveness to tax-related complaints
The overarching message from the Finance Minister was clear: Detection is not enough — recovery, accountability, and trust-building are equally vital. The department now faces the dual responsibility of tightening its enforcement framework while maintaining a taxpayer-friendly approach.
