The Government of Assam, through the Office of the Principal Commissioner of State Tax, has recently issued Circular No. 01/2023 to tackle the rising issue of fake GST registration. This circular aims to address the fraudulent practices of obtaining GST registration based on forged documents and subsequently issuing fake invoices without any genuine supply of goods or services. In this article, we will delve into the details of the circular, emphasizing the requirement of a valid rent agreement or leased deed for obtaining GST registration.
Analysis: The circular sheds light on the deceptive methods employed by unscrupulous individuals/entities to obtain GST registration, causing significant losses to the government’s revenue. It emphasizes that the registering authority should not grant any GST registration unless the applicant presents a valid rent agreement or leased deed, which must be duly registered with the Sub-Registrar or a competent authority responsible for rental/leased deed registration.
By mandating the submission of registered rent agreements, the government aims to prevent the proliferation of fake/bogus registrations and the subsequent chain of fraudulent input tax credit (ITC). This proactive measure will help safeguard the government’s revenue and curb financial malpractices within the GST system.
The circular makes it clear that strict compliance with the directive is expected, and any deviation from this requirement will be treated seriously. By enforcing this regulation, the government intends to deter individuals and entities from engaging in fraudulent activities, protecting the integrity of the GST registration process and ensuring the transparency and authenticity of transactions.
Conclusion: Circular No. 01/2023 issued by the Government of Assam’s Office of the Principal Commissioner of State Tax highlights the growing concern of fake GST registrations based on forged documents. By making it mandatory for applicants to provide a valid rent agreement or leased deed registered with the Sub-Registrar or a competent authority, the government aims to prevent the issuance of fake invoices and the subsequent chain of fraudulent input tax credit (ITC).
This circular serves as a strong deterrent to potential fraudsters, as any deviation from the requirement will be treated seriously. It is a proactive step taken by the government to protect its revenue and maintain the authenticity of the GST registration process. By adhering to this directive, the government of Assam aims to ensure transparency, accountability, and integrity in its tax administration system.
FULL TEXT OF THE CIRCULAR IS AS FOLLOWS:-
GOVERNMENT OF ASSAM
OFFICE OF THE PRINCIPAL COMMISSIONER OF STATE TAX: ASSAM
DISPUR: GUWAHATI
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Circular No. 01/2023, Dated: 7th July, 2023
No. CTS-81/(Pt)/2007/50
Sub : Registration under GST Act—registered rent deed.
Whereas it has come to knowledge that many unscrupulous persons/entities have obtained GST registration on the basis of forged documents like electricity bill, rental agreements etc. After obtaining registration. such fraudsters issue fake invoices without there being any actual supply of goods and services and creates a chain of fake input tax credit (ITC) and defraud the Government exchequer causing huge loss of Government revenue.
Therefore, in order to prevent such fake/bogus registration and duping of Government revenue. it is directed that registering authority shall not grant any GST registration unless the applicant furnishes a valid rent agreement/leased deed duly registered with the Sub-Registrar or such competent authority for registration of rental/leased deed.
The above instruction shall be followed strictly. Any deviation in this regard shall be viewed seriously.
Principal Commissioner of State Tax, Assam
Kar Bhawan, Dispur
Memo No. CTS-81/(Pt)/2007/50-A
Dated Guwahati, the 7th July, 2023
Copy to:-
1. The Commissioner & Secretary to the Government of Assam, Finance (Taxation) Department, Dispur for favour of kind information.
2. The Special Commissioner of State Tax/Additional Commissioner of State Tax (All), Head Office for information.
3. The Joint Commissioners of State Tax (All) for information and necessary action.
4. The Deputy Commissioner of State Tax/Assistant Commissioner of State Tax/Superintendent of State Tax (All Units) for information and necessary action.
5. Circular File.
Principal Commissioner of State Tax, Assam
Kar Bhawan, Dispur
