What is the Latest News about the GST in India?
On May 16th, 2023, India's Goods and Services Tax (GST) department has announced a Special All-India Drive aimed at detecting and preventing fake GST registrations across the country. This initiative stems from a national coordination meeting on April 24th, 2023, where the issue of unscrupulous elements misusing others' identities to obtain fake GST registrations was deliberated. The drive is set to run from May 16th to July 15th, 2023, with detailed guidelines issued by the Central Board of Indirect Taxes and Customs (CBIC).
Problem of Fake GST Registrations
The fake registrations pose a significant risk to the GST ecosystem, with fraudulent entities using dubious methods to obtain false registrations to fraudulently claim input tax credits without actual supply of goods or services. One notable method involves forging documents such as electricity bills, property tax receipts, and rent agreements to substantiate the principal place of business for GST registration.
A recent incident in Gujarat revealed that fraudsters were exploiting the Aadhaar card system, modifying phone numbers to link them to a dummy mobile number without the owners' consent. This highlights the vulnerability of the system and the need for heightened vigilance and coordinated action.
Guidelines for the Special All-India Drive
The guidelines for the drive have been issued to ensure a concerted and coordinated approach from both Central and State tax authorities. Here are the key points:
1. Period of the Special Drive
The drive, starting from May 16th to July 15th, 2023, encourages Central and State tax administrations to identify and weed out fake GST registrations. This period is strategic, allowing sufficient time for thorough verification and action.
2. Identification of Fraudulent GSTINs
The GST Network (GSTN) will use detailed data analytics and risk parameters to identify potential fraudulent GSTINs. These details will be shared with State and Central Tax authorities for verification and subsequent action. Field formations can also conduct their own data analysis to supplement the list.
3. Information Sharing Mechanism
A nodal officer has been appointed in each of the Zonal CGST Zones and States to ensure seamless coordination. The name, designation, contact information, and email ID of these officers must be shared with the GST Council Secretariat within three days of issuance of the guidelines. Data flow and coordination among all tax administrations will be crucial for the successful implementation of the drive.
4. Action to be Taken by Field Formations
Upon receiving data, field formations must conduct a verification process within a stipulated timeframe. If a taxpayer is found to be fictitious, the registration should be immediately suspended, and input tax credits blocked. Recipients of fraudulent input tax credits may be identified and action taken accordingly. In cases where the recipient GSTIN is from a different jurisdiction, details must be sent to the concerned tax authority through the appointed nodal officer.
5. Feedback and Reporting Mechanism
Each State and CGST Zone must provide a weekly action taken report to the GST Council Secretariat. National Coordination Committee, headed by the Member [GST] of CBIC, will monitor the progress of the drive and compile unique modus operandi for sharing with all tax administrations.
6. National Coordination Committee
The National Coordination Committee, including Principal Chief Commissioners and Chief Commissioners from various states, will meet periodically to discuss the progress and findings of the drive. GST Council Secretariat, GSTN, and Principal Commissioner GST Policy Wing CBIC will assist in the coordination and monitoring of the drive.
Conclusion
This initiative marks a significant step towards safeguarding the GST system from fraudulent activities. By implementing these guidelines, Central and State tax authorities aim to protect government revenue and maintain the integrity of the GST ecosystem.
Keyword Focus
The Key Keywords for this article are:
GST Fake Registrations – Fake GST registrations pose a serious threat to the GST system and are the focus of this Special All-India Drive. Special All-India Drive – This drive aims to detect and prevent fraud through a coordinated and systematic approach across the nation. Input Tax Credit Fraud – The prevention of fraud is crucial, as false input tax claims directly impact government revenue. Identifying and blocking these fraudulent credits is a core objective of the drive.