Gujarat govt raises GST target, set to intensify crackdowns on tax evaders

Gandhinagar: With Gujarat’s goods and services tax (GST) collections falling short of expectations, the state govt has directed its commercial tax department to collect at least 5% more than the budgetary estimate of Rs 81,000 crore for 2026-27 — a move that will directly translate into more raids, searches, and enforcement action against tax evaders.The revised target of Rs 84,050 crore, arrived at after a high-level meeting chaired by chief secretary Manoj Das, represents an increase of over Rs 10,000 crore compared to the Rs 74,000 crore actually collected in 2025-26. Officials described this as a “tall task,” but said the govt was committed to achieving it through a combination of tighter enforcement and technology-driven detection.On the enforcement front, authorities are planning to step up raids and searches, introduce more rigorous verification mechanisms to detect fraud, and strengthen recovery mechanisms. “The aim is to adopt a two-pronged strategy of boosting efficiency of the department and checking evasion simultaneously,” said an official.The shortfall in collections has been attributed in part to GST rate cuts on several items, including vehicles, announced in Sep last year, as well as rising govt expenditure on development projects. “As a result, the GST being collected this year is falling short of actual projections,” a source explained.On the technology side, the state has already deployed artificial intelligence (AI) and machine learning (ML) tools to combat the rising menace of fraudulent input tax credit (ITC) claims, which have been draining thousands of crores from the state exchequer.The commercial tax division has tied up with BISAG-N — the Bhaskaracharya National Institute for Space Applications and Geo-informatics — to develop a comprehensive system for detecting ITC scams.Officials said the use of AI and ML has become indispensable given the sheer volume of transactions. Around 29 crore transactions related to input credit are registered in the state every year, making manual verification of each practically impossible. The AI-based models are designed to flag fraudulent entities and suspicious transactions from within this vast data pool.In addition to technological tools, the commercial tax department has also been asked to boost human intelligence operations to more effectively detect GST evasion on the ground.