Up to 20% Reward to GST Fraud Informants: All You Need to Know about the DGGI & CBIC Reward Schemes

To comply with the Central Goods and Services Tax Act, Customs Act, Central Excise Act, NDPS Act, and Service Tax provisions, informers and government servants can receive rewards for reporting and recovering assets and properties related to arrears of duty, tax, fine, or penalty.

This also applies to cases of infringement or evasion of duty or tax, including fraud or abuse of export promotion schemes.

The importance of a reward system for reporting GST, Sales Tax, Customs, Excise Duties, and Tax Evasion cannot be overstated. A reward system serves as an incentive to encourage individuals and organizations to report instances of tax evasion and non-compliance.

Under these guidelines, informers who provide information leading to arrears recovery are eligible for rewards. Additionally, government servants who contribute to the recovery process can receive commendation and rewards based on specified conditions.

Informer and government servant rewards can amount to up to 20% of the net sale-proceeds of seized contraband goods, as well as the amount of duties and Service Tax evaded, and the penalty levied and recovered.

The latest notification from the Directorate General of Goods and Services Tax Intelligence (DGGI) stated that,

(i) Timelines for sending the reward proposal:

The reward proposals should be sent as per the time-line given below:

Advance Reward to the Informer - Within one month' of the issuance of the Show Cause Notice

Final Reward to the Informer - Within one month of the case attaining finality in favour of the department.

Advance Reward to the Departmental Officers - Within one month of the adjudication of the Show Cause Notice.

Final Reward to the Departmental Officers - Within one month of the case attaining finality in favour of the department.

In case, the case has been dosed without issuance of Show Cause Notice, the reward proposal should be sent after the appeal period is over. i.e. after 3 months from the date of closure. .

The reward proposals should be forwarded to the DGGI (Hqrs.), New Delhi, in the prescribed format (copy enclosed as Annexure-II), complete in all respects. The reward proposals should be sent under the signature/approval of the concerned Pr. ADG/ ADG/ Rr./ Commissioner.

The Commissionerates should send their reward proposals through their jurisdictional Chief Commissioner. However, the DGGI Zonal Units may send their reward proposals directly to the DGGI (Hqrs.), New Delhi.

For cases made by the DGGI (Hqrs.), New Delhi, the reward proposals should be sent by the concerned section of the DGGI (Hqrs.), New Delhi, under the signature/approval of the concerned Pr. ADG/ADG to the Reward Cell, DGGI (Hqrs.), New Delhi. After the receipt of the reward proposal, the Reward Cell, DGGI (Hqrs.), New Delhi, should send the copy of Annexure-I received along with the reward proposal to the Intelligence Section of the DGGI (Hqrs.), New Delhi, for verification/authentication, along with the Triplicate copy of the Annexure-I already received and kept in the Intelligence Section of DGGI (Hqrs.), New Delhi. Such verification/authentication should be carried out by the Intelligence Section of DGGI (Hqrs.) within one week.

The proposals received in the Reward Cell should be examined and processed by the Reward Cell, DGGI (Hqrs.), New Delhi, and in case any deficiency is noticed, the same should be brought to the notice of the sponsoring authority within 15 days of the receipt of the proposal. The sponsoring authority should rectify the deficiencies and send the proposal, complete in all aspects, within one month of receipt of the deficiency.

The reward proposals, which have been received completely in all aspects, should be examined and processed within one month for putting up before the Reward Committee.

The Reward Cell shall take necessary actions to arrange a meeting of the Reward Committee at least once in a quarter as per the terms of the Part 7.2 of the reward guidelines issued vide Circular No. 20/2015 dated 31/07/2015.

The guidelines also added – As a one-time measure, officers in charge of the 335 J register shall review the register and put up the list of all ripe cases for reward proposal so that the same can be put up to the respective Reward Committees. The review of the 335J register should be done on a quarterly basis in order to streamline the reward disbursal process.

Here’s how to Report a Case of Tax-Evasion in 3 Steps: –

Log on to: Report Tax Evasion, Directorate General of GST Intelligence(DGGI) RK Puram

Fill-in the following details: Name, Email, Mobile, Information and Security Code (Captcha).

Click Submit

Additionally, You can also send an email with attachment to add-dgcei@nic.in.

By providing a financial reward, the government can motivate people to come forward with information and evidence of fraudulent activities. This is especially important in cases where tax evasion is prevalent and difficult to detect.

In addition to serving as an incentive for whistleblowers, a reward system can also help to deter potential tax evaders. Knowing that there is a monetary reward for reporting tax evasion can make people think twice before engaging in such activities.

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