“Learn about the 2-Month Special Drive against Fake GST Registration introduced by the GST department. Discover FAQs covering the verification process, precautions, consequences for fake registrations, and more. Stay informed and ensure compliance with GST regulations.”
Introduction
In a recent meeting of Central and State GST officials held in Delhi, a decision was made to launch a special drive aimed at identifying and combating fake GST registrations. This proactive measure aims to ensure the integrity of the Goods and Services Tax (GST) system and maintain transparency in business transactions. In this article, we will address some frequently asked questions to provide a comprehensive understanding of this special drive and its implications.
Some of the FAQs are mentioned below regarding this:
1. What is the special drive against fake GST registration?
- GST department officer will make verification of GST number by different means. GST officers may visit a registered business place to verify the business is running in a true manner and that proprietor/partners/directors are existing and are not fictitious.
- The period of the said special drive will be 16th May 2023 to 15th July 2023.
2. Will 100 % of the GST number be verified?
- GST system(GST network) based on detailed data analytics and risk parameters identify suspicious GST numbers. The list will be shared with the concerned Jurisdiction. That is the one way of selecting of GST number which will be verified.
- Further apart from the GST system, officers may also supplement this list based on their own analysis, human intelligence, other local learning, and past experience.
3. What precautions need to be taken?
- The special drive is launched to identify a fictitious GST number who is not running any business and transferring ITC based on the invoice without any movement of Goods.
- If your business has existed and you have not done any business with a fictitious party then no need to worry.
- As per GST law at the registered place/addition place – the GST registration certificate, Name of business, and GST number should be displayed. Although the intention of the drive is not to check whether said things are displaying, but while the visit of the GST officer if he wishes he may levy a penalty because of this non-compliance. Further, keep all the KYC documents of proprietor/Partners/Directors, and registered address documents. Hence keep the said precaution at your business place.
4. What if the GST number is taken on the resident place?
- There is not any provision in GST law that you can not obtain GST registration on your residential place. If the nature of business is such that you could handle from your resident then there is no problem. From the resident service provider, Small traders and small manufacturers can do business.
5. What if at one place more than one GST registration is taken?
- In the GST law there is no restriction regarding this. But there should not be a situation like having hundreds of companies in a single place which creates doubt of not running the business.
6. What will happen to fake registration?
- Under section 29 of the CGST Act, 2017, the GST officer has the right to suspend and cancel the GST registration. Further from the details furnished by fake GST registered persons in GSTR 1 other beneficial taxpayers of the said fraud will be identified and action on such persons will be taken by blocking ITC and levying penalties.
Conclusion
The special drive against fictitious GST numbers signifies the commitment of the GST department to ensure a transparent and trustworthy taxation system. Businesses are advised to comply with GST regulations, maintain accurate documentation, and ensure the legitimacy of their transactions. By upholding the integrity of the GST system, we can foster a fair and thriving business environment for all stakeholders involved.
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