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Newsletter no. 81 dated 02.05.2023
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This website contains information about recent changes mainly in GST laws. It also contains Articles on various topic in GST. Please visit the website and read more.
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Index
- Recent updates
- GST in Media
- Income Tax in Media
- Article
- Press Release
- GST Notes
- Book by CMA Anil Sharma
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GSTN Advisory no. 672 dated 19.09.2026
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This is an advance information to the all users – Taxpayers and Tax Officers, of GST System who use Digital Certificate Signature on the GST Portal.
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A new version of emSigner (v3.3) is being made available for download for the purpose of providing compatibility with tokens (USB dongles) that are issued on or after 21-September-2026.
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A. Users with valid certificates: There is no change for the users having existing valid digital certificates and their existing token (USB Dongle) are working, as of 21-Sep-2026. If your existing DSC works normally, you may continue using your current emSigner version.
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If you encounter signing failures or if your certificate does not appear for selection despite correctly installed token drivers, upgrade to the emSigner version 3.3 by following steps given under point-B below. The emSigner version 3.3 is backward compatible to support the existing tokens (USB dongles).
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B. Users with newly issued tokens: The users who have been issued a new token (USB Dongle) on or after 21-Sep-2026, either due to issuance of new certificate and dongle, or renewal of certificate in a new dongle, shall have to upgrade to version 3.3 of emSigner by following below steps:
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Step-1. Please ensure that your system – desktop / laptop / AIO which on which the DSC is used for the GST System, meets the following minimum system requirements:
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1.1 Operating system and hardware
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Step-2.Download & install the version 3.3 of emSigner from the GST Portal by navigating to https://www.gst.gov.in/help/docsigner - the older versions of emSigner will not work for such new DSC dongles issued from 21 September 2026 onwards.
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C. Validity and future renewal: Under CCA’s advisory, DSCs downloaded onto FIPS 140-2 dongles on or before 21 September 2026 can continue to be used until the DSC expires. That date does not automatically invalidate existing DSCs. Subsequent renewal or fresh issuance generally requires a FIPS 140-3 dongle, subject to CCA’s specified exceptions. The CCA migration advisory may be referred for more details on this aspect by navigating to https://cca.gov.in/sites/files/pdf/news/Advisory_on_Migration_from_FIPS_140- 2_to_FIPS_140-3.pdf
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Please create a ticket on the GST Helpdesk if you need any assistance while upgrading to the emSigner version 3.3 and our teams shall get in touch for resolution.
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Mr. Nilesh Modi presenting 20 case studies on Tax audit report by Taxmann
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GSTN is taking downtime to enhance its services on the GST Portal on 18.09.2026 from 12:00 AM onwards until 2:00 am of 18.09.2026.
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We shall be enhancing services on the GST portal on : 18th Sept’26 12:00 AM onwards. GST Portal services will not be available until 18th Sept’26 02:00 AM. The inconvenience caused is regretted.
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GSTN is taking downtime to enhance its services on the GST Portal on 17.09.2026 from 03:00 AM onwards until 4:30 am of 17.09.2026.
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We shall be enhancing services on the GST portal on : 17th Sept’26 03:00 AM onwards. GST Portal services will not be available until 17th Sept’26 04:30 AM. The inconvenience caused is regretted.
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GSTN is taking downtime to enhance its services on the GST Portal on 16.09.2026 from 12:00 AM onwards until 2:00 am of 16.09.2026.
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We shall be enhancing services on the GST portal on : 16th Sept’26 12:00 AM onwards. GST Portal services will not be available until 16th Sept’26 02:00 AM. The inconvenience caused is regretted.
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GSTN is taking downtime to enhance its services on the GST Portal on 12.09.2026 from 01:30 AM onwards until 3:30 am of 12.09.2026.
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We shall be enhancing services on the GST portal on : 12th Sept’26 1:30 AM onwards. GST Portal services will not be available until 12th Sept’26 03:30 AM. The inconvenience caused is regretted.
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GSTN Advisory no. 671 dated 07.09.2026
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In cases where a dispute regarding liability exists but the demand amount is reflected as "NIL" or "Zero" in the demand order, and payment has been made by the taxpayer prior to the issuance of the demand order, the previous validation restricting the filing of an appeal against such demand orders has been removed from the GST Portal. Accordingly, taxpayers are now enabled to file an appeal in Form GST APL-01 against demand orders reflecting a NIL or Zero demand amount.
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Taxpayers facing the above issue may now file an appeal in Form GST APL-01 against such demand orders.
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In case of any query or difficulty while filing the appeal, taxpayers may raise a ticket with the GST Helpdesk for assistance.
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The Preventive Wing of the Central Goods and Services Tax (CGST) Commissionerate, Shimla, has uncovered an alleged GST fraud involving input tax credit of around ₹5.55 crore in the Kala Amb industrial area of Sirmaur district. The investigation has also led to the arrest of Gaurav Jain, managing director of M/s Samay Pharma India Private Limited, Trilokpur.
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How Was the Alleged GST Fraud Carried Out?
CGST officials alleged that Samay Pharma and M/s Dual Healthcare claimed input tax credit using fake invoices issued by several firms that either did not exist or were found to be non-genuine.
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The investigation found that ITC worth around ₹5.55 crore was allegedly claimed through invoices linked to 10 such firms. Officials examined the transactions to determine whether the supplies mentioned in these invoices had actually taken place.
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What Did Officials Find About the Goods?
Officials said the invoices showed the purchase of goods, but there was no evidence confirming that those goods were actually transported.
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E-way bills and toll-plaza records also did not support the movement of goods mentioned in the invoices, raising questions about whether the transactions reflected genuine supplies.
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How Were GST Refund Claims Allegedly Involved?
Officials further alleged that the fake input tax credit was later included in GST refund claims.
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The suspected credit was allegedly used in an attempt to obtain money back from the government through the GST refund mechanism.
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What Other Irregularities Were Found?
During the investigation, officials found several suspicious transactions, fake firms and invoices without actual movement of goods.
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They also alleged that shell entities were being used to manipulate the GST credit and refund system.
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What Evidence Did Investigators Examine?
The CGST team recorded statements from several people during the investigation and examined digital evidence.
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The inquiry also looked at invoices, the firms connected to them and records relating to the alleged movement of goods.
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Why Was the Managing Director Arrested?
Based on the evidence collected during the investigation, Gaurav Jain, managing director of M/s Samay Pharma India Private Limited, was arrested.
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The arrest was made under Section 69(1) of the Central Goods and Services Tax Act, 2017.
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Follow for daily updates on cybercrime, corporate fraud, DFIR, hacking, investigations, and digital forensics
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GST officers have arrested a partner of a firm engaged in trading of iron and steel goods for fraudulently availing input tax credit of over Rs 15.78 crore.
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Investigations by the Central Goods & Services Tax (CGST), Delhi South Commissionerate's anti-evasion branch revealed that the firm had availed inadmissible ITC on the basis of invoices issued by multiple firms, several of which were found to be non-existent, non-functional, suspended or cancelled.
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Field verification also established that certain suppliers had no genuine business activity at their declared places of business.
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In a statement, the Finance Ministry said, "CGST Delhi South Commissionerate have arrested a partner of the firm engaged in trading of iron and steel goods in a case involving fraudulent availment, utilisation and passing on of inadmissible ITC aggregating to over Rs 15.78 crore through bogus invoices of approximately Rs 87.67 crore."
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Further inquiry established that ITC was availed without actual receipt of goods and was also passed on to various recipients through invoices issued without corresponding supply of goods.
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Based on the evidence gathered during the investigation and statements recorded under Section 70 of the CGST Act, 2017, the accused was arrested on September 14 and produced before the Patiala House Court, which remanded him to judicial custody for 14 days.
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The Superintendent of Central GST, Mohit Pratap Singh, was caught while allegedly accepting a bribe of Rs 8 lakh through a mediator, the Lokayukta said.
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Lokayukta sleuths trapped the Central government officer while he was allegedly accepting the bribe at Kendriya Sadan in Koramangala here, according to a statement.
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According to the Lokayukta, Singh had demanded the money to "close a false complaint" filed against the complainant, Syed Zameer, in connection with pending Central GST dues. PTI GMS SSK
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Punjab’s excise and taxation officials detained 170 vehicles carrying goods suspected to be in violation of GST provisions, officials said on Monday.
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The operation, carried out jointly by all State Investigation and Preventive Units with special focus on Mandi Gobindgarh and Khanna, led to the seizure of iron scrap and finished iron/steel goods valued at more than Rs 5 crore.
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Excise and Taxation Minister Harpal Singh Cheema described the drive as “a wake-up call for those who think they can get away with it.” He emphasised that the government is determined to plug every loophole and ensure that tax compliance becomes the rule of the day rather than the exception.
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A substantial number of vehicles were found without proper invoices and prescribed documents, a clear violation of the GST law.
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Punjab will not allow tax evasion to eat into the state’s revenue. Every legitimate rupee must reach the public exchequer, for it is the lifeblood of development, Cheema said in a statement.
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The minister further informed that the detained consignments are undergoing detailed verification, which is expected to be completed within a week. PTI CHS MPL MPL
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The Telangana Commercial Taxes Department has issued detailed guidelines governing the use of Artificial Intelligence tools and other third party online platforms by its officers, making individual officers personally accountable for any unauthorised sharing of taxpayer information through such platforms.
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Circular No. 1/2026, issued by the department, allows officers to use AI for generic research, drafting and administrative efficiency, but makes it clear that such use cannot come at the cost of taxpayer confidentiality, data security or the independent application of mind by officers.
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The circular prohibits officers and staff from typing, pasting, uploading, scanning, photographing, dictating, transcribing or otherwise transmitting taxpayer related information into any public or commercial AT tool, chatbot, generative AI platform, document analyster, summariser translation or transcription service, or cloud based analytical software, unless the platform has been expressly authorised in writing by the Commissioner of Commercial Taxes or the Government of Telangana.
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CA Jitendra Patel, Partner, Indirect Tax, N.A.Shah Associates LLP, said the circular was a significant and welcome step towards the responsible use of AI by tax officers.
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"The Telangana commercial taxes department's circular No. 1/2026 is a significant and welcome step towards the responsible use of Artificial Intelligence (AI) by tax officers. While the circular encourages the use of AI for research, drafting and administrative efficiency, it rightly emphasises that taxpayers' confidentiality and the independent application of mind by officers cannot be compromised and liable to penal action," Patel said.
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Officers face personal accountability
The restrictions cover a wide range of taxpayer information, including GSTIN, PAN, legal name or trade name, address and contact particulars, bank account details, returns and annexures, financial statements, invoices, e way bill data, discrepancy reports, notices, assessment, adjudication or appellate orders, audit material, refund applications, inspection , search and investigation records, statements recorded during proceedings, and internal notes or legal opinions relating to an identifable taxpayer.
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The circular also makes clear that the responsibility for protecting such information rests with the officer concerned. Unauthorised transmission of taxpayer information to an external AI platform can therefore expose the officer to disciplinary, legal and data protection consequences.
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Ikesh Nagpal, Lead, Indirect Tax, AKM Global, said the circular strikes a balance between the use and AI and the need to protect taxpayer confidentialy.
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"The Telangana Commercial Taxes Department's circular strikes a pragmatic balance between embracing AI and safeguarding taxpayer confidentiality. Rather than prohibiting AI, it permits its responsible use while drawing a firm boundary against sharing identifiable taxpayer information on unauthorised platforms. This is particularly relevant for tax administration, where officers routinely handle highly sensitive financial and transactional data," Nagpal said.
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"More importantly, the circular reinforces that AI may assist but cannot replace the officers' independent application of mind. Every AI generated legal proposition or case citation must be independently verified, and the final order must reflect the officer's own reasoning. This approach places accountability where it belongs with the decision make while still allowing technology to improve efficiency in tax administration," he added.
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AI cannot replace tax officer's judgment
The department has also stressed that AI cannot replace the independent judgment required from officers, particularly while issuing notices, assessments, adjudication orders and other quasi judicial decisions.
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Manoj Mishra, Partner and Tax controversy Management leader, Grand Thornton Bharat, said the circular comes at a time when AI is becoming increasingly embedded in legal and tax workflows.
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"As AI becomes increasingly embedded in legal and tax workflows, the focus has rightly shifted from whether AI should be used to ensuring it is used responsibly and within the boundaries of law. Recent judicial interventions, where courts have cautioned against mechanical reliance on AI generated content and even set aside orders lacking independent application of mind, underscore that technology cannot substitute statutory decision making. Recent Telangana's Circular on AI use is therefore a timely and pragmatic intervention. It reinforces that taxpayers information remains confidential under the GST framework and the Digital Personal Data Protection Act, and that unauthorised disclosure on public AI platforms can trigger disciplinary, legal and data protection consequences. By permitting AI for generic research and drafting while mandating human verification, confidentiality safeguards and independent judgment, the circular offers and balanced governance framework that could serve as a useful precedent for tax administrations across the country , "Mishra said.
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"The circular makes one point unmistakably clear: custodianship of taxpayer data carries personal accountability. Any unauthorised disclosure through public AI platforms may expose the officer to disciplinary action, criminal and data protection consequences, while also jeopardising the validity of the underlying tax proceedings. AI may improve administrative efficiency, but responsibility for data security, legal accuracy and independent decision making cannot be delegated to an algorithm," he added.
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Public AI platforms treated as third party transmission
Aravind Srivatsan, Partner and India Tax Leader, Nangia Global, described the framework as what could be termed a first of its kind detailed code governing the use of AI tools by tax department staff.
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He said the Telangana Government has acknowledged that officers are increasingly using AI based tools to improve the speed, consistency and quality of their work, while making it clear that such use cannot compromise taxpayer confidentiality, data security of the officer's independent judgment.
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Srivatsan pointed out that large language models, generative AI platforms, chatbots, document analysers, summarisers, translators, transcription services and coding assistants may process information on private servers, frequently outside India. Information entered into such platforms may also be logged, retained , reviewed or used for model training, he said.
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According to Srivatsan , typing , pasting, uploading, scanning, photographing or dictating departmental material into an external AI platform amounts to electronic transmission of information to a third party and can create risks of data leakage, misuse and subsequent litigation.
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He said that where an officer transmits taxpayer particulars to an external AI engine without authority of law or taxpayer consent, the act can attract personal accountability.
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Disciplinary, criminal and data protection consequences
The circular provides for consequences where taxpayer information is disclosed without authorisation. These can include disciplinary action under the applicable Telangana Civil Services rules, possible criminal consequences under applicable law and data protection consequences under the Digital Personal Data Protection Act, 2023.
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The circular also addresses the potential impact on tax proceedings where AI generated material is used without proper verification. An officer remains responsible for the accuracy of statutory provisions, legal propositions and judicial precedents relied upon in an official proceeding.
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Aditya Singhania, Founder of Trackase, said the guidelines could address the unauthorised and unconscious sharing of taxpayer data through general AI applications while also establishing individual responsibility for breaches.
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He said the framework draws a clear distinction between the role of humans and machines in proceedings where tax officers exercise quasi judicial authority. He also pointed to instances where courts have taken cognisance of non existent. AI generated citations and said the Telangana framework provides detailed guidance for responsible use of AI by tax officials.
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Officers told to delete past taxpayer data
The department has also addressed information that may already have been entered into AI platforms.
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Officers and staff have been directed, to the extent technically feasible, to delete taxpayer related information previously entered into AI platforms, along with associated chat histories and stored files.
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The restrictions also extend to the use of personal mobile phones, tablets, laptops, personal email accounts and personal cloud storage for processing departmental material through AI tools.
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At the same time, the circular does not prohibit AI use altogether. Officers can use AI for generic research, drafting assistance and language related tasks, provided identifiable taxpayer information is not shared and AI generated material is independently verified before being relied upon.
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The framework effectively places a clear boundary around the use of AI in tax administration. AI can be used as an efficiency tool, but the responsibility for taxpayer confidentiality, data security, legal accuracy and independent decision making remains with the tax officer.
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Source: cfo economictimes
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The September 30, 2026 deadline for filing tax audit reports for assessment year (AY) 2026-27 is fast approaching, but the government has not announced any extension so far. Several Chartered Accountant (CA) associations have sought more time, citing the workload involved in completing audits, reconciliation issues and delays in getting audit-related information and utilities.
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For taxpayers whose accounts are subject to audit, September 30 remains the applicable deadline unless the Central Board of Direct Taxes (CBDT) announces a change. Experts say taxpayers should continue working towards the existing deadline rather than wait for an extension.
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CA associations seek more time
The demand for an extension has gained momentum as professional bodies have raised concerns over the time available to complete tax audits. The Chartered Accountants Association, Jalandhar has sought an extension of the tax audit deadline to October 31, while the Punjab Accountants Association and Rajasthan Consultants Association has also made a similar representation.
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The associations have cited the delayed release of ITR forms and utilities, increased compliance requirements and the overlap between the August 31 non-audit ITR deadline and the September 30 tax audit deadline. They have argued that extending the audit deadline would provide CAs with more time for proper reconciliation and verification.
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The request comes against the backdrop of a tax audit process that requires detailed reporting and verification across several financial and tax records.
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Mohit Gupta, partner – direct & international taxation, PNAM & Co. LLP, said taxpayers and professionals should continue to work on the assumption that September 30 is the deadline unless the CBDT formally announces an extension.
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“At present, taxpayers and professionals should proceed on the basis that September 30, 2026 remains the applicable deadline unless the CBDT issues a formal extension notification,” Gupta said.
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He said the demand for additional time is not merely about getting more time to file the report. Auditors need to reconcile books of account with GST records, TDS/TCS data, AIS/TIS and other information before finalising the report.
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“The demand for additional time is therefore primarily about ensuring quality and accuracy of compliance rather than merely seeking additional time for filing,” he said.
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What are the biggest challenges?
The audit process has become increasingly data-intensive, with auditors required to examine information from multiple sources. Any mismatch between the books and tax records may need further investigation before the report can be finalised.
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Dinesh K. Jain, managing partner, Dinesh Aarjav & Associates, said the pressure is coming from several issues at the same time.
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“Three things are stacking up: a compressed working window, recurring portal issues — login failures, OTP delays, DSC errors, and glitches pulling AIS/TIS/Form 26AS data; and reconciliation friction,” Jain said.
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Taxpayers may have to reconcile turnover with GST returns, verify TDS/TCS details, check AIS and TIS entries and match bank transactions with the books. Pending information from taxpayers can further delay the process.
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Gupta said bank statements, fixed-asset details, loan schedules, related-party information, expense details and other supporting documents need to be available with the auditor before the report can be completed.
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Another factor this year is the transition to the Income-tax Act, 2025. However, the tax audit relating to FY 2025-26 and AY 2026-27 continues under the Income-tax Act, 1961.
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Will the government extend the deadline?
There is a precedent for extending the tax audit deadline. For FY 2024-25, the CBDT had extended the deadline for filing tax audit reports from September 30, 2025 to October 31, 2025.
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However, last year's extension does not mean that the government will necessarily take a similar decision this year.
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What should taxpayers do now?
With the deadline approaching, taxpayers whose accounts are subject to audit should start closing any pending gaps rather than wait for a government announcement.
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The immediate priority should be to provide CAs with all outstanding documents and complete key reconciliations. This includes GST turnover, AIS/TIS and Form 26AS, bank and loan accounts, fixed assets, statutory dues, related-party transactions and expenses that may require tax-disallowance analysis.
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Experts say taxpayers should work backwards from the deadline and ensure that their reports are not left for the final day.
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“Work backward from September 30, not toward it,” Jain said.
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Taxpayers should also remember that uploading the audit report is not the end of the process. The CA files the report electronically, after which the taxpayer has to approve it through their income-tax e-filing account.
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Therefore, taxpayers should keep sufficient time for the approval step as well.
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For now, September 30 remains the tax audit deadline for AY 2026-27. Unless the CBDT formally announces an extension, taxpayers and CAs should proceed on the basis that the existing deadline will apply.
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Taxpayers with foreign assets are waiting for rules to catch up with a promise made in the Union Budget. A proposed six-month amnesty window remains unavailable even as the income tax department steps up scrutiny of overseas holdings. Tax professionals say the delay has left affected residents uncertain about this year’s returns. The confusion comes as foreign-asset details increasingly appear in tax notices and Annual Information Statements.
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The I-T department has been seeking details of foreign bank accounts, investments, and income in tax returns. Meanwhile, the Union Budget 2026-27 proposed a settlement window for past omissions. With its rules, forms, and operating guidelines still awaited, tax professionals say affected taxpayers are uncertain about how to proceed with this year’s returns.
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International tax expert Mukesh Patel said the govt announced a scheme for taxpayers with foreign assets and income in Febr, but it has not yet been implemented. “Such taxpayers are confused whether they should disclose their foreign assets in the ITR this year,” he said.
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The Foreign Assets of Small Taxpayers – Disclosure Scheme, 2026 (FAST-DS), proposed in the Budget, offers resident Indians a one-time, six-month window to declare previously unreported overseas holdings. These may include foreign bank accounts, employee stock options (ESOPs), restricted stock units (RSUs) and mutual funds.
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A key feature is the proposed immunity from prosecution and steep penalties under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act.
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FAST-DS divides eligible cases into two categories. Category A covers overseas income or assets that were not disclosed and on which tax was not paid in India. It applies to foreign assets with a fair market value of up to Rs 1 crore as of March 31, 2026. Taxpayers opting for this category would have to pay a total levy of 60% of the fair market value, comprising 30% tax and an additional 30% penalty or fee, Patel said.
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Category B covers assets acquired either from income on which Indian tax had been paid or while the taxpayer held non-resident status. It applies where such assets were subsequently omitted from the foreign-asset schedules of the ITR after the individual became a resident. Assets valued at up to Rs 5 crore as of March 31, 2026 would be covered on payment of a flat fee of Rs 1 lakh.
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The scheme’s six-month period will begin only after it is formally notified. Patel said taxpayers were still awaiting the guidelines, forms and rules required to use it.
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Chartered accountant Karim Lakhani said overseas asset details were also appearing in taxpayers’ Annual Information Statements (AIS). Taxpayers should examine their AIS for previous years and, if the information is accurate, assess whether updated returns are required, he said. Incorrect information should be disputed or reported to the department.
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Source: The Times of India
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Press release no. 2300883 dated 18.08.2026
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Top Tax Officials Deliberate on Key Issues Concerning the Income Tax Department at Conclave
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The two-day conclave of Principal Chief Commissioners of Income Tax and Principal Directors General of Income Tax, organized by the Income Tax Department, concluded today, August 18, in Jaipur. The conclave was chaired by Shri Ravi Agrawal, Chairman, Central Board of Direct Taxes (CBDT).
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The event was attended by Members of the CBDT—Shri Pankaj Kumar Mishra, Shri Sanjay Bahadur, Shri Prasenjit Singh, Ms. G. Aparna Rao, Ms. Pallavi Agrawal and Shri Sunil Kumar Singh—along with Principal Chief Commissioners, Principal Directors General, Commissioners of Income Tax (Administration) and other senior officers from across the country.
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The conclave witnessed extensive deliberations on key issues concerning the Income Tax Department, including e-HRMS, service matters, litigation, reservation policy, taxpayer services, future projects, the Systems Directorate, capacity building, infrastructure, expenditure budget, TDS administration and inter-agency coordination. Senior officers also shared their views and suggestions on the challenges and future priorities of the Department. A documentary produced by the Media Cell of the CBDT was also screened during the programme.
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Shri Ravi Agrawal, Chairman, CBDT, held open and interactive discussions with senior officers on the future direction and functioning of the Department and emphasized the need for an actionable roadmap based on the suggestions received. Detailed discussions were also held on infrastructure requirements and essential facilities for Income Tax offices across the country.
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The programme was organized under the guidance of Shri Ravi Agrawal, Chairman, CBDT, and under the leadership of Shri Sumeet Kumar, Principal Chief Commissioner of Income Tax, Rajasthan. Shri Anil Kumar Bhardwaj, Commissioner of Income Tax (Administration & TPS), Jaipur; Shri Gautam Singh Chaudhary, Additional Commissioner of Income Tax (Administration); Shri Surendra Yadav, Deputy Commissioner of Income Tax (Headquarters); and other officers and staff made significant contributions towards the successful conduct of the conclave.
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At the conclusion of the programme, Ms. G. Aparna Rao, Member (TPS&R), CBDT, delivered the valedictory address. Shri Anil Kumar Bhardwaj, Commissioner of Income Tax (Administration & TPS), Jaipur, thereafter extended a vote of thanks to the Chairman, CBDT, Members of the Board, senior officers and all officers and staff associated with the successful organization of the conclave.
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The conclave concluded on a positive and forward-looking note, with a shared commitment to translating the deliberations and suggestions into concrete action towards strengthening the Department and enhancing taxpayer services.
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Press release dated 18.08.26
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Based on ground intelligence and analysis of data on outward foreign remittances, the Income Tax Department has identified several suspicious entities that remitted large amounts of foreign exchange over the last three years. A nationwide network of entities engaged in remitting funds abroad was uncovered during a search operation conducted on a group of fictitious charitable trusts involved in providing accommodation entries against bogus donations/contributions. Preliminary ground verification revealed that the entities making these remittances were either non-filers or were filing income-tax returns showing very small turnovers. The turnovers had no apparent correlation with the large amounts of money being remitted abroad. They also did not appear to match the stated purpose of the remittances, such as payment for freight, import of software, or import of consulting services. Further ground-level intelligence revealed that these entities were not actually operating from the addresses declared by them.
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Further analysis of the data also revealed that a large number of Form 15CB certificates were issued by a relatively small group of professionals. The remitted funds were also received by a clustered group of entities. Form 15CB, read with Rule 37BB of the Income-tax Rules, 1962 (corresponding to Form 146 read with Rule 220 of the Income-tax Rules, 2026), requires the Accountant certifying a foreign remittance to verify its taxability with reference to the books of account and other relevant documents. However, the findings raise concerns about whether adequate due diligence was carried out by the Accountants before issuing these certificates.
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On 18.08.2026, the Department launched a nationwide detailed verification exercise to verify these foreign remittances, focussing on shell entities, the persons behind them, and the professionals who have issued Form 15CB certificates. Entities located in districts along the country’s land borders and remitting significant amounts of money abroad have also been covered in the exercise. The exercise has covered approximately 394 entities (including 117 entities located in land-border States), and 36 professionals.
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The Department emphasises that Accountants issuing certificates in Form 15CB/Form 146 are expected to exercise due care, diligence and professional judgment. They should properly examine the underlying transactions and relevant facts before certifying the remittances, as these certifications play an important role in maintaining trust in the system.
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Further investigations are currently underway.
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Months long investigation reveals defrauding exchequer of over Rs. 2,500 crore (approx.); Rs. 75 lakh cash, 160 MT areca nuts seized (approx.); Nine arrested
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Syndicates imported areca nuts into India from Indonesia, Thailand, Malaysia and other South-East Asian countries by mis-declaring country of origin as Bangladesh
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Licence of Customs Broker firm responsible for clearance of most of the fraudulent imports of areca nuts suspended
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Press release no. 2300102 dated 16.08.2026
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The Directorate of Revenue Intelligence (DRI), in a month-long intelligence-led operation, has dismantled a major network involved in importing South-East Asian areca nuts into India by falsely declaring them as Bangladeshi origin and fraudulently availing concessional duty benefits under the South Asian Free Trade Area (SAFTA). The investigation has so far revealed a potential revenue loss of more than Rs. 2,500 crore. Nine persons have been arrested in connection with the case.
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The import of areca nuts into India attracts a Basic Customs Duty (BCD) of 100%. However, eligible imports of areca nuts made under SAFTA agreement are fully exempt from customs duty. The areca nuts originating from Bangladesh are entitled to exemption under SAFTA if imports meet the prescribed Rules of Origin criterion.
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Intelligence gathered and developed by DRI indicated that certain syndicates were fraudulently claiming the SAFTA benefits on a very large scale on imports of areca nuts. While they were importing areca nuts originating and sourced from Indonesia, Thailand, Malaysia and other South-East Asian countries, they were mis-declaring the country of origin of areca nuts imported into India as Bangladesh.
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Thereafter, simultaneous searches were conducted at multiple premises linked to importers, Customs Brokers and IEC holders in Kolkata and Visakhapatnam. Several incriminating documents and substantial evidences establishing the South-East Asian origin of Areca nuts were recovered. DRI officers also recovered and seized around Rs. 75 lakh in cash, believed to be sale proceeds of the illegally imported goods. A live consignment of around 160 MT of areca nuts.
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The investigations so far have revealed huge scale of fraudulent imports of areca nuts in which exchequer has been duped of customs duty in excess of Rs 2,500 crore in recent years. The masterminds were facilitating the import of areca nuts from South-East Asian countries into one of the EPZ in Bangladesh and thereafter routing the goods to India merely changing containers and bags and passing them off as Bangladeshi-origin areca nuts. They had fraudulently obtained SAFTA Certificates of Origin from Bangladeshi authorities. The masterminds were charging substantial commissions from Indian importers for arranging the routing, documentation, clearance and transportation of the consignments and massive collection of payments in cash... The investigation has also brought to light the use of hawala channels and dummy entities for movement and layering of the financial proceeds.
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Investigation has further revealed that one Customs Broker firm was particularly responsible for clearance of most of the fraudulent imports of areca nuts identified in the case. Consequent to the ongoing investigation by DRI, the Customs Broker's licence has been suspended by the competent authority. Nine persons have been arrested so far in connection with the case.
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Such illegal imports adversely impact domestic areca nut growers and legitimate trade by creating unfair price distortion, and disrupting the level playing field for legitimate businesses. Besides causing huge loss to the Government revenue, these illegal activities also undermine regulated trade practices and economic security in the border regions.
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With this operation, DRI has effectively disrupted a well-organised network involved in systematic mis-declaration of country of origin, fraudulent availment of SAFTA benefits and large-scale evasion of customs revenue.
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6. GST Notes by CMA Anil Sharma
1) Shri CMA Anil Sharma, Shri CMA Gurdev Singh Saini and Smt. CMA Bhawna Sharma posted Chapter-15 containing CGST Act in simple language in PPT format. This is to make dealers, professionals, academicians, students etc. understand the basics of GST laws. Each Chapter in CGST Act, 2017 is explained in the form of Slides as given below for easy understanding of the Act:
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Chapter-15 slides given below:-
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7) Book by CMA Anil Sharma
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Book by CMA Anil Sharma, B.Com (Honrs), M.Com, FCMA co-author of the book "Handbook on GST Audit by Tax Authorities" has authored yet another book title Goods & Service Tax – Some Perceptions and Reflections. Buy now at Price Rs. 240- (Rs.300/- minus 20% Discount).
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