Ministry of Finanace
Department of Revenue
Central Board of Indirect Taxes & Customs
North Block, New Delhi-110001
Tel. No. : + 91-11-23092849, Fax No. : + 91-11-23092890
E-Mail : ajit.m@gov.in

Date: 26/October, 2020

D.O.No.38/CH(IC)/2020

The use use of IT products in enhancing our service delivery has been a major theme in my recent letters to you. The DG Systems today has at its disposal a treasure trove of GST and Customs data that it primarily receives from GSTN and ICEGATE and from third party government departments. This information is not only useful for purposes of assessment of duty but also in risk assessment, audit and in anti-evasion matters. All these measures will help us in augmentation of revenue and in ensuring that the taxpayer are by and large compliant to the law. I would like to dwell on this theme in my letter.

The DGARM has been carrying out various analytical studies and has identified high-risk taxpayers based on certain risk parameters. It has also been sharing various Red Flag reports and Risky Exporters details with field formations for verification and follow-up action through an online application hosted on the CBIC-DDM portal. This targeted information shared with field formations must be used in our revenue augmentation exercises. While the DG Systems and DG ARM are using the bulk data exchanged under various MoUs signed by CBIC with third parties for exchange of data for sending inputs to field for third party verification, this information base can be tapped by field formations in individual cases of importance too.

Similarly, EDW is an excellent tool lending itself to multi-dimensional analytics on the ICES database. EDW/ADVAIT has already issued licenses to each formation for use of Customs data. The business author/analyst licenses should be used fully for anti-evasion efforts in Customs. The APIS interface at the Airports provides great intelligence development opportunities in respect of international passengers arriving in India. BIFA tools developed by GSTN for the use of DGGI and CGST officials have also been put in place. It envisages detection of tax evasion, by its ability to display complex networks of suppliers and do an analysis on connected transactions. The focus areas of the BIFA Tools are primarily Gap Analysis, Network Analysis, Anomaly Detection, Identification of Inconsistent Behaviour, Revenue Analysis and Predictive Modelling. During the first month itself, DGGI has been able to make very good cases by using the Network Analysis tools. I am sure that in times to come more pinpointed detection would be affected by field formations also by using this facility. The IT team is also working on integration of the GST database with ADVAIT over next few months for better synergy and targeted action.

The DIGIT platform was made available by DRI to all Customs formations in 2016. DIGIT provides a repository of Customs/Narcotics cases booked by DRI and Customs field formations. It serves as a very effective database on offences and is easily searchable. Similarly, the DIGIT Module launched by the DGGI in 2018 and made available to all CGST Zones aims at creating a centralized

GST offence database for storing and retrieving data on cases of evasion of Central Excise Duty/Service Tax/GST. DIGIT not only ensures proper monitoring of the progress of live cases, the progress of adjudication, sanction of prosecutions, reward to informers/officers etc., but is also a tool for mobilising additional revenue by augmenting effective anti-evasion activities.

The tools enumerated above are very useful resources for data analytics, checking antecedents and developing intelligence. However, the utility of these tools depends on the data quality on which they work and on the frequency of their usage. EDW, BIFA, APIS, DIGIT etc. should be put to use regularly for analytics and intelligence development for effective and targeted enforcement action to ensure that legitimate trade and passengers do not suffer and are rather incentivized. What is important is not merely the detection of cases, but the prompt feedback for the information provided by DGSYSTEMS/ DGARM. It not only gives perspective to the tax administration but also helps in timely completion as well as identification of illicit activities and their modus operandi. It will also assist in machine learning and improve our strike rate. Most importantly, these tools helps us in clearly identifying and segregating the outliers from the compliant and honest taxpayers. This makes it important that field officers ensure high standards of data quality being entered into the system in a timely manner. I expect that the Zonal Chiefs of the Zones as well as the Directorates, especially DG Systems, DRI, DGGI and DGARM, would give, due importance to this aspect. They should set up small teams tasked with using these tools for providing intelligence inputs to their strike formations and also give a feedback to DG Systems/DGARM.

I am happy to note that the officers of CGST Vadodara-II Commissionerate had utilized IT tools rigorously to mine data using the AIO and the e-Way Bill portal. This led to the detection of 115 fake firms with illegal availment and passing on of Input Tax Credit to the tune of Rs. 50.24 crore. One person who was the mastermind of the evasion has been arrested. Congratulations to the Vadodara team.

Writing to you at the beginning of the last week of the month, I take this opportunity to bid farewell and convey good wishes, on behalf of all of you and on my own personal behalf, to all officers and staff who are superannuating this October. I also wish good health to all officers and staff and their families.

Yours sincerely
(M. Ajit Kumar)

To,
All Officers and Staff of Central Board of Indirect Taxes and Customs

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