FM Sitharaman to Review Direct Tax Concerns Amid Inputs from Field Units

FM Sitharaman to Review Tax Refunds, Investigations and Pending Litigations at Upcoming Conclaves.

Finance Minister Nirmala Sitharaman will hold high-level review meetings with tax authorities later this month to assess key bottlenecks in refund processing, investigations, litigation, and fraud detection. Ahead of these sessions, the Ministry of Finance has asked field offices of both direct and indirect tax departments to submit detailed data.

The Central Board of Indirect Taxes and Customs (CBIC) will conduct a two-day conclave on June 19–20, followed by a similar session by the Central Board of Direct Taxes (CBDT) on June 23.

Refunds, SEZ claims under scrutiny
The Finance Minister is expected to focus heavily on delays in refund processing, particularly claims linked to exports and Special Economic Zones (SEZs). According to officials, zones with delays exceeding 60 days will be closely examined, and officers may be asked to explain rejection patterns using data analytics.

Cargo clearance times at ports and airports will also be reviewed, with the Minister expected to seek explanations for prolonged dwell times.

High-pendency cases under the Directorate General of GST Intelligence (DGGI), especially investigations pending beyond 180 days, are also likely to come under the scanner.

Direct tax meeting to focus on legacy litigation and refund delays
In the CBDT session, the Finance Minister will review systemic delays in issuing income tax refunds, accountability in processing returns, and the burden of legacy litigation. Pending appeals will be analysed by age and region to speed up resolutions.

Both CBIC and CBDT have asked their field formations for comprehensive inputs. These include figures on pending refunds, unresolved investigations, fraud detection cases, and adjudications, to ensure an in-depth discussion during the conclaves.

GST fake firm crackdown
In a letter sent on June 14, GST field officers were asked to examine cases involving networks of fake firms operated by a single mastermind. The letter directs officers to study how such entities secured GST registration undetected, with the aim of closing loopholes and making the registration process more robust and fraud-proof.

Another letter, issued on June 12, asked officers to submit data on completed investigations in FY 2023–24 and 2024–25, average investigation timelines, and a breakup of cases pending for over one and two years. Reasons for delay and timelines of unresolved investigations have also been sought.