With GST evasion crossing over and above 1 lakh crore in 2022-23, CBIC had initiated a two month long special drive to identify fake GST registrations. The GST policy wing highlighted that non-genuine registrations are being used to fraudulently pass on the input tax credit to unscrupulous recipients by issuing invoices without any underlying supply of goods or services.
And therefore, the Council has recommended the following amendments in CGST Rules, 2017 to strengthen the registration process and to effectively deal with the menace of fake and fraudulent registrations in GST which are as follows:
A) RULE 10A – Furnishing of Bank Account Details
After a certificate of registration in FORM GST REG-06 has been made available on the common portal and a Goods and Services Tax Identification Number has been assigned, the registered person, except those who have been granted registration under rule 12 or, as the case may be rule 16, shall as soon as may be, but not later than forty five days from the date of grant of registration or the date on which the return required under section 39 is due to be furnished, whichever is earlier, furnish information with respect to details of bank account, or any other information, as may be required on the common portal in order to comply with any other provision.
Amendment in rule 10A to provide that the details of bank account, in name and PAN of the registered person, to be required to be furnished within 30 days of grant of registration or before filing of statement of outwards supply under section 37 of CGST Act in FORM GSTR-1/ IFF, whichever is earlier.
B) Rule 21A. Suspension of registration (corresponding section 29)
(2A) Where, a comparison of the returns furnished by a registered person under section-39 with
(a) the details of outward supplies furnished in Form GSTR-1; or
(b) the details of inward supplies derived based on the details of outward supplies furnished by his suppliers in their Form GSTR-1,
or such other analysis, as may be carried out on the recommendations of the Council, show that there are significant differences or anomalies indicating contravention of the provisions of the Act or the rules made thereunder, leading to cancellation of registration of the said person, his registration shall be suspended and the said person shall be intimated in Form GST REG-31, electronically, on the common portal, or by sending a communication to his e-mail address provided at the time of registration or as amended from time to time, highlighting the said differences and anomalies and asking him to explain, within a period of thirty days, as to why his registration shall not be cancelled.
Amendment in rule 21A(2A) to provide for system-based suspension of the registration in respect of such registered persons who do not furnish the details of valid bank account under rule 10A with the time period prescribed under the said rule.
Insertion of 3 proviso in rule 21A(4) to provide for automatic revocation of such system-based suspension upon compliance with provisions of rule 10A.
C) RULE 59. Form and manner of furnishing details of outward supplies.- (corresponding sections 37 to 38)
(6) Notwithstanding anything contained in this rule, –
(a) a registered person shall not be allowed to furnish the details of outward supplies of goods or services or both under section 37 in Form GSTR-1 , if he has not furnished the return in Form GSTR-3B [for the preceding month] old[for preceding two months];
(b) a registered person, required to furnish return for every quarter under the proviso to sub-section (1) of section 39, shall not be allowed to furnish the details of outward supplies of goods or services or both under section 37 in Form GSTR-1 or using the invoice furnishing facility, if he has not furnished the return in Form GSTR-3B for preceding tax period;
(d) a registered person, to whom an intimation has been issued on the common portal under the provisions of sub-rule (1) of rule 88C in respect of a tax period, shall not be allowed to furnish the details of outward supplies of goods or services or both under section 37 in Form GSTR-1 or using the invoice furnishing facility for a subsequent tax period, unless he has either deposited the amount specified in the said intimation or has furnished a reply explaining the reasons for any amount remaining unpaid, as required under the provisions of sub-rule (2) of rule 88C.
Amendment in rule 59(6) to provide that where a registered person has not furnished details of a valid bank account under rule 10A, the said registered person may not be allowed to furnish the details of outward supplies in FORM GSTR-1 or using IFF.
D) Amendment in rule 9 and rule 25 to do away with the requirement that the physical verification of business premises is to be conducted in the presence of the applicant and also to provide for physical verification in high risk cases even where Aadhaar has been authenticated.