GST came into force on 1st July, 2017 and we will be celebrating 6 years of GST this year. Currently, there are 1.39 crore businesses registered under GST.
With GST evasion crossing over Rs 1 lakh crore in 2022-23, Centre and state tax officers have initiated a two-month-long special drive to identify fake GST registration.
The objective of GST is seamless ITC, this campaign seeks to eliminate fake input tax credits.
The GST Policy Wing had earlier this month written to Principal Chief Commissioners of Central Tax highlighting that non-genuine registrations are being used to fraudulently pass on the input tax credit to unscrupulous recipients by issuing invoices without any underlying supply of goods or services or both.
The government launched the drive against fake GST registrations and is using robust technology deployment and data collection which allows the authorities to match data collected from various points in the supply chain to detect areas where revenue collections could be improved. The Special Drive would take place in close coordination between the State and Central tax administrations.
During the Drive from May 16 to July 15 2023, tax officers would also conduct requisite verification and take further remedial action to eliminate fake billers from the GST ecosystem.
Besides, mandatory Aadhaar-based authentication for new GST registrations as well as centralized suspension of registrations of businesses who default in timely filing of returns are also being used to curb fake registration.
Following points to keep in check for verification
- As per GST law, registered traders and businesses will have to display the GST registration number on their business signboards and the registration certificate in the premises. Also, composition dealers have to mention that they are availing the composite scheme and are not entitled to collect taxes from people.
- Check on the Statutory documents like Renewal of Rent agreement, NOC from Owners, Change in Board or Authorized signatories.
- Books of Accounts to be maintained as per the GST laws.
- Timely filing of Returns, Taxpayers are advised to file statutory returns on or before the due date to avoid suspension and penalties.
- Maintenance of separate documents for additional place of business.
Click here to check the recording on the topic "Discussion on Fake GST Registrations by CA Abhishek Raja Ram" that was recently hosted by CAclubindia on Twitter Spaces
Role of GSTN and Verification Drive
The Goods and Services Tax Network (GSTN) will play a pivotal role in the special drive. Using detailed data analytics and risk parameters, GSTN will identify fraudulent GSTINs for both state and central tax authorities. These identified suspicious GSTINs will be shared with the respective tax administrations for conducting verification drives and taking necessary actions. This collaborative approach will help strengthen the enforcement mechanism and deter fraudulent activities within the GST ecosystem.
Monitoring and Oversight
The progress of the special drive will be monitored by the National Coordination Committee, led by a Member from the Central Board of Indirect Taxes & Customs (CBIC). This committee comprises Principal Chief Commissioners and Chief Commissioners from Delhi and Bhopal CGST Zones, along with Chief Commissioners and Commissioners of State Tax from Gujarat, West Bengal, and Telangana. This monitoring ensures the drive’s effectiveness and enables timely intervention if required.