In response to the increasing cases of fake GST credit claims, the commercial tax department has introduced proactive measures to curb fraud at its roots. Among the key initiatives are the introduction of welcome letters for new GST registrants and the establishment of 14 GST Suvidha Kendras.
New Verification Measures for GST Registrations
On average, the department processes 15 to 20 new GST registration requests daily. Previously, physical verification of business premises was conducted only when a complaint was raised. To address this gap, the department now sends welcome letters to the registered address of the entity.
If the letter remains undelivered, the Assistant Commercial Tax Officer (ACTO) will issue a show-cause notice for registration cancellation. Furthermore, officials will personally verify the premises, and GST registrations for businesses found non-existent at the given address will be cancelled.
Learning from Best Practices
The initiative follows a study of successful measures adopted in other states, such as Tamil Nadu. Commissioner S.A.M. Rizvi dispatched teams to learn from these practices, leading to the reintroduction of physical verification via welcome letters, which were discontinued after the implementation of the TGST Act, 2017.
Initially, registration certificates were sent through registered post with acknowledgment due (RPAD), but the system shifted to email-only communication under TGST. The welcome letter initiative now bridges this verification gap, preventing fraudulent claims at the preliminary stage.
Results of Anti-Fake Registration Drive
The department's recent anti-fake registration drive has identified:
- 3,000 doubtful taxpayers
- 800 non-existent businesses
Officials blocked fraudulent claims worth Rs 300 crore and issued show-cause notices to these entities. The initiative marks a significant step toward ensuring compliance and tackling tax evasion effectively.
A Strong Message Against Fraud
These measures highlight the government’s commitment to maintaining transparency and accountability in the GST framework. By adopting innovative solutions like welcome letters and learning from successful models in other states, the commercial tax department aims to safeguard public revenue and restore trust in the system.
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