Top Revenue officials on Tuesday urged enforcement chiefs of State and Central GST formations to focus on “real evasion” of taxes rather than “interpretative issues and general industry practice” and emphasised on the importance of finely balancing enforcement actions with the ease of doing business.

Revenue Secretary Sanjay Malhotra called for enforcement teams to focus on identifying and weeding out fake registrations under a special two-month drive launched on August 16 and underlined that the masterminds and beneficiaries of fake input tax credit (ITC) must be tracked down. He called for strict action against such beneficiaries to ensure this creates the “necessary deterrence” effect.

Under the special drive, close to 59,000 potential fake firms have been identified for verification and further enquiry in a co-ordinated exercise by Central and State GST formations. The list has been drawn up based on certain identified risk parameters. Since 2020, fake ITC evasion of ₹1,20,000 crore has been detected, and 170 “masterminds” behind such cases have been apprehended.

Central Board of Indirect Taxes and Customs (CBIC) Chairman Sanjay Agarwal emphasised the need for enforcement agencies to stay ahead of the evaders so that the sanctity of the GST system is preserved. “He advised the enforcement units to focus on real evasion rather than interpretative issues and general industry practice,” the Finance Ministry said in a statement about the second national conference of enforcement chiefs.

Mr. Malhotra also underscored that tax officials must be “continuously connected” with trade and business “in the field reducing the need for intrusive enforcement action and enabling proactive compliance”. Some officials mooted “building a national register of enforcement actions so that real time information gets disseminated to all enforcement units in Centre and State formations”.