Fake ITC Under Scanner as State Taxes Kashmir Tightens Enforcement, Reviews Revenue Performance | Kashmir Life

SRINAGAR: The State Taxes Department has intensified its crackdown on fake Input Tax Credit (ITC) and tax evasion networks while reviewing overall revenue performance across the Kashmir Division.

Commissioner State Taxes, PK Bhat on Monday chaired a high-level review meeting in Srinagar, where officers from all circles of the division participated, including Additional Commissioner (Administration and Enforcement) Kashmir, Parveez Ahmad Raina.

The meeting assumed significance as it focused on growing concerns over fake ITC claims, misuse of registrations, and revenue leakage through irregular transactions. Officials reviewed GST Analytics and Fraud Detection (BISAG) reports, audit cases under Section 65 of the JK GST/CGST Act for FY 2022–23, scrutiny of returns under Section 61, and enforcement outcomes against non-filers.

A key discussion point was the rising threat of fraudulent Input Tax Credit claims, with the department stressing the need for stronger integration of data analytics and field intelligence to detect and prevent tax evasion.

The Commissioner also reviewed the impact of GST rate rationalisation, noting that reductions in tax rates for automobiles and cement from 28 percent to 18 percent, and to zero for insurance, may temporarily impact revenue growth in FY 2025–26, though expected to improve compliance and stability in the longer term.

The meeting further flagged concerns over tax compliance linked to payments routed through Drawing and Disbursing Officers (DDOs) and misuse of Rule 14A registrations. Officers were directed to ensure tighter scrutiny to prevent revenue loss.

Circle-wise performance was also assessed, including recoveries made through DRC-03 following assessments and enforcement actions. The Commissioner stressed the need for improved target achievement through data-driven monitoring and coordinated field action.

PK Bhat directed officers to fully utilise intelligence inputs from BISAG, PRIME, DC IT analytics, Special Investigation Unit (SIU), and Business Intelligence Unit (BIU) to identify evasion patterns and dismantle fake ITC networks.

Reiterating the department’s priority, he said the focus remains on revenue protection, elimination of fraud, and promotion of fair trade practices through technology-driven enforcement.

The department also called for heightened vigilance in sensitive sectors and emphasized that cancellations or loopholes should not translate into revenue loss, particularly through unchecked government-linked payments.

Officials reaffirmed their commitment to strengthening GST compliance and building a transparent, technology-backed tax administration system across Kashmir.