GST Evasion: Kerala SIT Can Now Summon Accounts, Bank Statements and Verify E-Way Bills

The Kerala government has constituted a five-member Special Investigation Team (SIT) with wide-ranging powers to investigate suspected tax evasion, summon and scrutinise accounts and registers, verify e-way bills and GST returns, examine bank statements, and trace financial transactions.

The SIT has also been authorised to seek information from banks, financial institutions, government agencies, e-commerce platforms and logistics operators, giving the team broad access to financial and transactional records needed to detect revenue leakage.

The Kerala government has stepped up its efforts to detect and curb Goods and Services Tax (GST) evasion by constituting a five-member Special Investigation Team (SIT) to examine complaints received through the Chief Minister’s Office, media reports and other sources. The move comes amid concerns over possible revenue leakage and allegations of irregularities in the handling of GST-related cases.

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The government has directed the SIT to undertake investigations on a “war-footing” and complete them within a time-bound framework. The team has been specifically empowered to examine suspected tax evasion, trace financial transactions and obtain records from a wide range of public and private entities.

The development comes shortly after Chief Minister V.D. Satheesan said that alleged GST irregularities connected with an event involving football star Lionel Messi would be examined by the state government.

Five-Member Team Constituted

The SIT is headed by Deputy Commissioner Brijesh C and comprises State Tax Officer Rex Alex K and Assistant State Tax Officers Dina C.F., Sunil Kumar N.C. and Ajeesh H.

According to the government order, the team has been constituted after complaints of a “grave and serious nature” were received through the Chief Minister’s Office, news reports and other sources.

The government has taken the view that large-scale GST evasion, if not investigated effectively, could result in substantial loss of revenue to the state exchequer. The order also underlines the wider impact of tax evasion on compliant taxpayers and the credibility of the tax administration.

The SIT has consequently been instructed to proceed with its inquiries on a priority basis and submit its findings within the prescribed framework.

SIT Empowered to Trace Money Trails

A significant feature of the new mechanism is the broad investigative authority given to the SIT.

The team can summon and verify files, books of accounts, registers, e-way bills, GST returns, bank statements and other physical or electronic records relevant to the cases under investigation.

The SIT can also seek information from banks, financial institutions, statutory authorities, government departments, e-commerce platforms and logistics operators. It can requisition records available with jurisdictional tax offices as well as documents held by other government agencies or authorities.

This wider information-gathering mandate could allow investigators to compare tax returns with actual financial transactions, movement of goods and digital commerce records. Such cross-verification is particularly significant in GST investigations, where discrepancies may emerge only when information from multiple sources is examined together.

Allegations Surrounding Reporter Broadcasting Corporation Under Scanner

One of the matters that is expected to come under the SIT’s scrutiny is a complaint concerning Reporter Broadcasting Corporation (RBC) in connection with allegations of GST evasion relating to transactions associated with the ongoing controversy surrounding an event involving Lionel Messi.

At this stage, the allegations remain matters for investigation. The constitution of the SIT does not by itself establish tax evasion or wrongdoing by any particular company or individual. The facts, financial transactions and tax compliance position will have to be examined by the investigating authorities before any conclusions are reached.

The government’s decision to bring such complaints within a specialised investigation mechanism indicates an attempt to ensure that allegations involving potentially significant revenue implications are examined systematically rather than through isolated departmental inquiries.

₹4.5 Crore Cash Seizure Case Also Likely to Face Scrutiny

The SIT is also expected to examine a recent case in Ernakulam involving ₹4.5 crore in cash that was seized from a private firm and subsequently reportedly returned by the GST department.

Questions have reportedly been raised regarding the circumstances in which the seized cash was released and whether the concerned officials followed the applicable legal and departmental procedures.

Another issue that could attract scrutiny is the reported manner in which the money was returned through the firm’s bank account. This has prompted questions over whether the handling of the seized cash had implications for the financial trail and whether the departmental action was appropriate.

The SIT’s investigation will be important in determining the factual circumstances surrounding the seizure, the reasons for the subsequent release, the documentary basis for the decision and whether any procedural or substantive violations occurred.

Focus on Revenue Protection

The formation of the SIT comes against the backdrop of wider concerns over GST revenue leakage in Kerala.

GST evasion can take several forms, including suppression of taxable turnover, incorrect reporting of transactions, fraudulent input tax credit claims and discrepancies between declared transactions and actual business activity. Investigating such cases increasingly requires authorities to examine data beyond conventional tax returns.

Kerala has previously witnessed political and administrative controversy over allegations of large-scale GST fraud. In October 2025, Satheesan, then Leader of the Opposition, had alleged a large GST scam in the state and called for a central investigation, highlighting concerns over fraudulent GST registrations and diversion of tax-related transactions.

The latest SIT mechanism therefore represents a significant shift towards a more centralised investigation of complaints that may involve substantial revenue implications.

Access to Banking and Digital Commerce Records

The SIT’s ability to seek information from banks, e-commerce companies and logistics operators could prove particularly important in complex GST investigations.

Modern commercial transactions often generate multiple digital records—tax invoices, e-way bills, payment records, delivery details, bank transactions and platform-level transaction data. Comparing these records can help tax investigators identify inconsistencies between the turnover disclosed by a taxpayer and the transactions actually undertaken.

The inclusion of logistics operators is also significant because movement of goods can provide an independent trail against which GST returns and invoices can be verified.

Similarly, information from e-commerce platforms may help authorities examine transactions conducted through digital marketplaces and identify possible differences between platform records and tax declarations.

Government Seeks Accountability Alongside Tax Recovery

The SIT’s mandate appears to extend beyond merely quantifying tax dues. The government has indicated that credible complaints should be examined thoroughly and that responsibility should be fixed wherever wrongdoing is established.

A senior GST department official was quoted as saying that the mechanism was being treated as a priority intervention to ensure prompt investigation of tax-evasion complaints. The official also linked the initiative to the Chief Minister’s earlier public focus on GST evasion and revenue leakage.

The broader objective, according to the official, is to ensure that credible complaints are not ignored, persons responsible for violations are held accountable and avoidable loss of public revenue is prevented.

Confidentiality Made Mandatory

Given the sensitive nature of the investigations, the government has directed the SIT to maintain strict confidentialityduring the inquiry process.

This requirement is particularly relevant where investigations involve financial records, bank accounts, tax returns and allegations against businesses or individuals. Maintaining confidentiality can also help prevent premature disclosure of investigative findings before the evidence has been properly examined.

The SIT will submit its inquiry reports to the Secretary to the Chief Minister through the State GST Commissioner.

Significance of the SIT Initiative

The constitution of the SIT gives Kerala’s GST enforcement mechanism a dedicated structure for handling complaints that may otherwise require coordination between multiple offices and agencies.

Its wide powers to requisition records and obtain financial and transactional information could enable investigators to undertake a more comprehensive examination of suspected tax evasion. The emphasis on time-bound investigation also signals that the government intends to avoid prolonged inquiries in cases considered serious.

At the same time, allegations against taxpayers or officials will have to be distinguished from established violations. The SIT’s findings, supporting documents and subsequent proceedings will determine whether tax evasion, procedural lapses, financial irregularities or any other wrongdoing is ultimately established.

For Kerala’s tax administration, the immediate challenge will be to convert the new investigative framework into effective enforcement while ensuring due process, confidentiality and accountability. If the SIT succeeds in identifying genuine cases of revenue leakage and recovering legally due taxes, the initiative could become an important component of the state’s broader efforts to strengthen GST compliance and protect public revenue.