GST Field Formations Ordered to Work with State Mining Authorities to Monitor Illegal Mining and Movements on Grounds of GST Evasion

· Instruction Issued: CBIC has issued Instruction No. 01/2026-GST dated 5 August 2026 directing GST field formations to strengthen coordination with State Mining Authorities for sharing information on illegal mining and transportation of minerals.

· Background: The instruction follows findings of the DG Performance Audit Report No. 07 of 2024-25, which observed inadequate coordination between GST authorities and State Mining Departments in tackling illegal mining, transportation of minerals, misuse of e-way bills, and GST evasion.

· Need for Coordination: The Audit highlighted that timely exchange of information between State Mining Authorities and GST authorities can help detect tax evasion and improve compliance.

· Role of Principal Chief Commissioners/Chief Commissioners: All CGST Zones have been directed to:

o Nominate a dedicated officer in each CGST Zone to coordinate with the respective State Mining Department.

o Establish a mechanism with State Mining Authorities for periodic sharing of information relating to illegal mining and transportation of minerals.

· Information to be Shared: State Mining Authorities should provide details of:

o Illegal mining activities.

o Illegal transportation of minerals.

o Suspected GST evasion and related cases.

· Action by GST Authorities: Information received should be analysed and verified against:

o GST returns,

o E-way bill data,

o Other information available under the CGST Act, 2017 and related rules,
to detect tax evasion and initiate appropriate action.

· Periodic Review: Principal Chief Commissioners/Chief Commissioners are required to periodically review the effectiveness of the information-sharing mechanism and take corrective measures wherever necessary.

· Monthly Compliance Report: Field formations must review the action taken every month and submit the prescribed information to the GST Investigation Wing Headquarters.

· Objective: The instruction aims to improve inter-agency coordination, curb illegal mining, prevent GST evasion linked to mineral transportation, and strengthen tax compliance through timely intelligence sharing.

[CBIC Instruction No. 01/2026-GST dated 5 August 2026]

Subject: Instruction regarding Coordination with State Mining Authorities for sharing information relating to illegal mining: and transportation of minerals.

The undersigned is directed to refer to the Draft Performance Audit Report of the Comptroller and Auditor General of India (C&AG) on "Assessment, Levy and Collection of GST on Minerals" wherein it has been observed that State Mining Authorities detect numerous instances of illegal mining, illegal transportation of minerals, seizure of minerals and vehicles, cancellation/suspension of mining leases, excess extraction of minerals, and other violations under the mining laws.

1.2 Such information has potential implications under the Central Goods and Services Tax Act, 2017, as it may indicate suppression of taxable supplies, non-registration, undervaluation, non-payment or short payment of tax or other forms of GST evasion. The audit report further observed that there is presently no structured or institutional mechanism for periodic sharing of such information between the State Mining Authorities and the CGST field formations. Consequently, valuable enforcement intelligence available with the State Mining Authorities is not being systematically utilised by the GST authorities for examination of possible tax implications and initiation of appropriate action under the GST law.

2. The matter has been examined by the Board. It has been observed that timely sharing of information relating to illegal mining and transportation of minerals would facilitate identification of cases involving possible suppression of taxable supplies, non-payment or short payment of GST, wrongful availment of input tax credit and other violations of the provisions of the Central Goods and Services Tax Act, 2017.

3. Accordingly, it is hereby directed that all Principal Chief Commissioners/Chief Commissioners of CGST Zones shall ensure that:

(i) a Nodal Officer is designated in each CGST Zone for coordination with the respective State Mining Department;

(ii) a mechanism is established with the State Mining Authorities for periodic sharing of information relating to illegal mining and transportation of minerals detected within the jurisdiction;

(iii) information so received shall be suitably analysed for identification of GST implications and appropriate action shall be initiated wherever warranted under the provisions of the CGST Act, 2017 and the rules made thereunder;

(iv) intelligence generated from such information is disseminated to the jurisdictional Commissionerates/ DGGI formations, wherever necessary, for further necessary action;

(v) periodic meetings with the State Mining Authorities are held to review the effectiveness of the information-sharing mechanism and to resolve operational issues.

4. The field formations are hereby directed to circulate these instructions to all the formations under their charge for strict compliance. Difficulties, if any, in implementation of the aforesaid instructions may be brought to the notice of the Board.

F. No.GST/INV/Audit Report No.7 of 2024/33/2024-25