Officers in government agencies like police, BSF, CISF and coast guard can give information to the indirect tax authorities about evasion and get rewarded.
The Central Board of Indirect Taxes and Customs (CBIC) has amended the reward guidelines to include officers of other government agencies within the scope of the scheme.
"Government Servants working in other Departments/Agencies such as Police, BSF, Coast Guard,CISF, State CST etc who play a role in Customs, CST, Central Excise, Service Tax and NDPS cases booked / investigated by the formations and agencies under CBIC may also be considered for sanction of reward," the CBIC said in a circular.
However, only such officers of these department/agencies who hold rank equivalent to the Additional Commissioner of Customs & Central Excise or lower rank, will be considered eligible for sanction of rewards, it added.
So far, as per the guidelines under the Customs Act, Central Excise Act, Narcotic Drugs & Psychotropic Substances (NDPS) Act, and Service Tax provisions and Drawback frauds or abuses of Export Promotion Schemes, rewards are granted to the informers and government servants in respect of cases of seizures made and/or infringements/evasion of duty / service tax etc.
Informers and government servants were eligible for reward up to 20 per cent of the net sale-proceeds of the contraband goods seized and/or amount of duty/ service tax evaded plus amount of penalty levied and recovered.
In respect of cases of detection of Drawback frauds or abuse of duty exemption schemes under various Export Promotion Schemes, the informers and government servants were eligible for reward up to 20 per cent of recovery of drawback claimed fraudulently and/or recovery of duties evaded.
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Final rewards, both to government servants as well as informers, are sanctioned only after conclusion of adjudication/appeal/revision proceedings, as well as closure of proceedings.
"Consequent to the introduction of GST, a need was felt to include recovery in cases under CGST and IGST Acts under the Reward Guidelines to ensure their parity with cases booked under the Customs Act, NDPS Act, Service Tax and Central Excise References were also received in the Board to treat officers of other Government agencies, who play a role in the detection of cases, at par with CBIC officers, irrespective of the fact whether seizure has been effected by these agencies or by officials of CBIC," the circular said.
The informant reward scheme will, henceforth, also include recovery under the Central GST (CGST) and Integrated GST (IGST) acts. This would help check evasion of Goods and Services Tax by unscrupulous traders and businesses.
"The amended reward guidelines will also be applicable to cases which have not been processed till date," the CBIC said.
These guidelines will be applicable to informers (who give information relating to assets, immovable properties etc of persons from whom arrears of duty, tax, fine, penalty etc are recoverable and the information results in the recovery of arrears) and Government Servants who put in commendable efforts to effect recovery as per conditions specified therein.
Currently, an informer to the Income Tax department can earn up to Rs 5 crore for providing information to income tax authorities regarding black money stashed abroad. Under the benami transaction prohibition act, the informants can earn up to Rs 1 crore by providing information regarding benami transaction or property.
In the run up to the roll out of the Goods and Services Tax (GST) on July 1, 2017, the government had renamed the Directorate General of Central Excise Intelligence (DGCEI) as DGGSTI for investigating cases of evasion in the new indirect tax regime. The Directorate General of GST Intelligence (DGGSTI) has already made several arrests for evasion of the indirect tax and an informant reward scheme is expected to help the directorate to keep an eye on such activities.
AMRG Associates Partner Rajat Mohan said: "Informant scheme has been extended to recovery of CGST and IGST which would ensure full circle inclusion of all central indirect taxes for the purposes of rewards to informants, including officers of other government agencies playing a role in the detection of cases, with CBIC officers".
EY Tax Partner Abhishek Jain said: "This scheme would aid in unearthing black money and checking tax evasion by businesses. Where successful, this could help boost tax collections by the Government as well".