“Stay informed on the Special Drive Against Fake GST Registration from May 16th to July 15th, 2023. Understand the key steps and consequences for taxpayers outlined by Zafarulla Sattar Khan, Senior Tax Advisor. Ensure compliance to avoid penalties, registration cancellation, and input tax issues.”
Advice to Taxpayers on Special Drive Against Fake GST Registration to held from 16th May 2023 to 15th July 2023
Introduction: The issue of GST fake registration has become a significant concern for the Indian government, as it has resulted in revenue losses. To combat this problem, the GST Council recently conducted a meeting where it was decided to launch a special drive to identify and address fake GST registrations. The Central Board of Indirect Taxes and Customs (CBIC) has issued instructions for this drive, which will take place from May 16th to July 15th, 2023, across India. It is important to note that this drive aims to verify registrations rather than conduct inspections, ensuring that genuine GSTN holders need not panic. The objective is to identify those involved in passing Input Tax Credit (ITC) without engaging in regular business activities, thereby causing financial losses to the government.
During the GST Council Meeting, the issue of GST fake registration have been discussed and have decided to launch a special drive to identifying the fake GST registration & CBIC has issued instruction No.01/2023-GST dated 04.05.2023, this drive being launched from 16th May 2023 to 15th July 2023 all over India.
It is said that it is only a Verification process and not inspection process, so that genuine GSTN holder need not be panic. It is only to identify the Fake GST registration from where there are passing ITC without doing regular business, due to this fake ITC causing revenue loss to the government.
Taxpayer needs some points to conclude this Drive if, the GST officer Visit their business premises or the address in which the taxpayer have taken the GST Registration.
1. Taxpayer need to display GSTN at their business premises, from where they are operating their business.
2. Taxpayer should renew their rent agreement if it is expired and need to review all the supporting documents submitted during the time of GST registration.
3. Taxpayer need to gather KYC of their partner/Directors if it is registered in partnership or else.
4. Taxpayer should collect NOC or Ownership proof of the business premises if it gets amend or renewed agreement. Also to review their Electricity Bills etc in support to the premises.
5. Taxpayer must display their exact Trading name as they get in their GST Registration Certificate with their GSTN.
6. Taxpayers need to review the details of their suppliers from whom they are purchasing the goods, and also the invoice wise payment track.
7. Taxpayer shall be confident that, they are purchasing the goods from the genuine supplier.
8. Taxpayers need to maintain all books of account as prescribed by the GST Act, and they ensure that all compliance is followed by maintaining the details of Inward Supplies (Purchases) Outward supplies (Sales) etc.
9. Taxpayers need to review all the GST compliances by checking the status of their suppliers of goods and services, and filling of GSTR-1 & GSTR-3B etc. within the due dates.
10. Taxpayer should make available without fail on their business premises if the GST officers Visits their business premises for verification, to avoid unnecessary notices to be issued on their name for non-compliances.
A departmental consequence for non-compliances is as follows:
1. They may be penalty as per CGST & SGST Act.
2. Initiate the procedure to cancel the GST registration.
3. Blocking of Input Tax.
4. Recovery of Input Tax credit if availed from any Fake GST Invoice.
Conclusion: The launch of the special drive to identify fake GST registrations signifies the government’s commitment to tackling fraudulent practices and protecting the integrity of the GST system. It is crucial for taxpayers to be aware of the necessary steps they need to take during this verification process. By displaying the GSTN at their business premises, renewing rent agreements, reviewing supporting documents, gathering KYC information, and ensuring compliance with GST regulations, taxpayers can demonstrate their authenticity and cooperation. Maintaining accurate records, reviewing supplier details, and timely filing of returns are additional measures that taxpayers must undertake. Non-compliance with the verification process can result in penalties, cancellation of GST registration, blocking of input tax, and recovery of falsely claimed input tax credits. By actively participating in the drive and adhering to the guidelines, taxpayers can contribute to a transparent and accountable GST system while avoiding unnecessary consequences.
Compiled by: Zafarulla Sattar Khan– Senior Tax Advisor, Authorized Tax Practitioner | State Chairman: Karnataka Taxpayers Association (R) | Cell: 7676558201 Email: email@example.com