Throughout this post, we have explained all of the government GST Reward Schemes for fraud informants. Informers and government employees can get rewards for disclosing and reclaiming assets and properties connected to unpaid taxes, duties, fines, and penalties in order to comply with the provisions of the Central Goods and Services Tax Act, Customs Act, Central Excise Act, NDPS Act, and Service Tax.
This is also applicable in the cases of fraud or tax evasion and it may involve fraud or mistreatment of export promotion schemes.
One cannot exaggerate the significance of a reward system for reporting GST, Sales Tax, Customs, Excise Duties, and Tax Evasion. A reward system encourages individuals and organisations to report instances of tax evasion and non-compliance by offering an incentive.
According to these rules, informants who provide information that results in the recovery of arrears are qualified for rewards. Additionally, under certain conditions, government employees that aid in the recovery process may be recognised and provided rewards.
Up to 20% of the net selling earnings of seized illegally transported goods, as well as the number of duties and service tax that was evaded, as well as the fine that was assessed and recovered, can be given as rewards to informers and government employees.
Latest Notification of DGGI
(i) Dates for sending the reward proposal-
The timeline for sending reward proposals is given below-
- Informer Gets Advance Reward- The due date is within one month of the issuance of the Show Cause Notice.
- Last Reward to the Informer – Within one month of the case reaching finality on the side of the department.
- Advance Reward to Officer Departmental – Within one month of the adjudication of the Show Cause Notice.
- Departmental Officers Get Final Rewards- Within one month of the case reaching finality on the side of the department.
The awarded proposal should be sent after the appeal process has ended if the matter has been resolved without the issue of a Show Cause Notice. And that time can be three months from the date of closure.
The award proposals must be presented before the DGGI (Hqrs. ), New Delhi, in the ordered format required (copy enclosed as Annexure II), complete entirely. The concerned Pr. ADG/ ADG/ Rr./ Commissioner’s signature and/or permission should be included with the reward proposals.
Through the Jurisdictional Chief Commissioner, reward proposals should be sent by commissioners. However, the DGGI Zonal Units may send their reward proposals directly to the DGGI Headquarters, in New Delhi.
For cases raised by the DGGI (Hqrs. ), New Delhi, the reward proposals shall be delivered to the award Cell, DGGI (Hqrs. ), New Delhi, by the concerned section of the DGGI (Hqrs.), New Delhi, with the signature or permission of the relevant Pr. ADG/ADG. Following receipt of the reward proposal, the Reward Cell, DGGI (Hqrs.), New Delhi, should send the copy of Annexure-I received with the reward proposal to the Intelligence Section, DGGI (Hqrs.), New Delhi, along with the triplicated copy of Annexure-I already received and kept in the Intelligence Section, DGGI (Hqrs.), New Delhi, for verification or authentication. The Intelligence Section of DGGI (Hqrs.) should complete this verification or authentication within a week.
What are the Proposals for the GST Reward Schemes?
The proposals received by the Reward Cell at the DGGI (Hqrs. ), New Delhi, should be inspected and then carried out further. If any discrepancies are found, these should be brought to the sponsoring authority’s attention within 15 days of the proposal’s receipt. Within one month of receiving the deficiencies, the sponsoring authority must make the necessary corrections and submit the proposal, complete in every way.
The reward proposals which have been received fully in all respects should be inspected and processed within a month before being presented to the Reward Committee.
It is required for the Reward Cell to take essential steps to lay out a meeting of the Reward Committee at least once in a quarter following the terms of Part 7.2 of the reward suggestions issued vide Circular No. 20/2015 dated 31/07/2015.
These suggestions or guidelines also included- Officers in charge of the 335 J register shall evaluate the register as a one-time measure and compile a list of all ripe cases for reward proposals, which will then be presented before the concerned Reward Committees. To simplify the reward payout procedure, the 335J registry should be done on a quarterly basis.
Steps to Report in Case of Tax or GST Evasion
- Log In to Directorate General of GST Intelligence (DGGI), RK Puram, Report Tax Evasion
- Fill Out the following information: Information such as name, email, phone number, and security code (captcha). And then Click ‘Submit’
- You can also send an email with an attachment, to add-dgcei@nic.in
By offering a financial reward, the government can encourage people to come forward with information and proof of fraudulent activity. This is crucial in situations when tax evasion is widespread and challenging to detect.
A reward system not only encourages whistleblowers but can also deter potential tax evaders. People may be discouraged from engaging in tax evasion if they are aware that there is a financial incentive for reporting it.
An informer gets a reward only when the entire dues have been recovered from the party, case closed after adjudication, appeals, prosecution in courts which may be in several lacs or crores. This may take several years of investigation and trials. But in case if the case has not been closed or entire dues not recovered then he will never get any reward amount on any amount recieved recovered by tax authorities. Most of the times its peanuts which both the informers or authorities get in the name of reward. The FIR may be in 100 crores but in case if there is recovery of say 60 crores one is eligible for Reward on only those cases where case is closed. A person may evade tax involving different parties hence unless the amount of evasion plus penalty and interest not recovered after a show cause informers never get a reward on the amount recovered. Upto 20% Reward may look very attractive but in the end most of the times despite time frame an informer or the officials never gets any reward. The system is very complicated. Right from Jurisdiction to Investigation, recovery etc.