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Taxmen to conduct two-month special drive to weed out
fake GST registrations, identify masterminds
The CBIC will undertake a two-month-long special drive
to detect fake GST registrations and take action to
identify the masterminds/beneficiaries as it aims to
weed out fake ITC claims. Fake/non-genuine registrations
are being used to fraudulently pass on input tax credit
(ITC) to unscrupulous recipients by issuing invoices
without any underlying supply of goods or services or
both.
This menace of fake
registrations and issuance of bogus invoices for passing
fake ITC has become a serious problem, wherein
fraudulent people engage in dubious and complex
transactions, causing revenue loss to the government,
the GST Policy wing of the CBIC said.
"A Special All-India Drive may be launched by all
Central and State Tax administrations during the period
16th May 2023 to 15th July 2023 to detect
suspicious/fake GSTINs and to conduct requisite
verification and further remedial action to weed out
these fake billers from the GST eco-system and to
safeguard Government revenue," the Central Board of
Indirect Taxes and Customs (CBIC) said in a
communication.
Currently, there was 1.39 crore taxpayers registered
under Goods and Services Tax (GST).
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The identification of fraudulent GST identification
numbers (GSTINs) would be based on detailed data
analytics and risk parameters.
GSTN will identify such fraudulent GSTINs and share the
details of such suspicious GSTINs with the concerned
State/ Central Tax administration for initiating a
verification drive and conducting necessary action
subsequently.
The National Coordination Meeting of the State and
Central GST officers on April 24 discussed the issue of
unscrupulous elements misusing the identity of other
persons to obtain fake/ bogus registration under GST.
On receipt of data from GSTN, a time-bound exercise of
verification of the suspicious GSTINs shall be
undertaken by the concerned jurisdictional tax officer(s).
If, after detailed verification, it is found that the
taxpayer is non-existent and fictitious, then the tax
officer may immediately initiate action for suspension
and cancellation of the registration.
"Action may also be taken to identify the masterminds/
beneficiaries behind such fake GSTIN for further action,
where ever required, and also for recovery of Government
dues and/or provisional attachment of property/ bank
accounts, etc. as per provisions of section 83 of CGST
Act," the CBIC said.
NA Shah Associates, Partner, Indirect Tax, Parag Mehta
said the drive against fake registrations and fake ITC
would ensure such persons are removed from the system
and the benefits of GST are available to all the
compliant assesses.
"It must also be ensured that in the zeal to detect such
assesses the law compliant assesses are not harassed.
Proper procedures and SOPs should be issued to ensure
the least inconvenience to normal business houses,"
Mehta added.
AMRG & Associates Senior Partner Rajat Mohan said these
two months of the drive may yield huge tax collections
in the coming months, breaking the glass ceiling once
again.
GST collections touched a record high of Rs 1.87 lakh
crore in April.
Source::: THE ECONOMIC TIMES,
dated 05/05/2023.
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