10,000 Fake GST Registrations Identified As Government Intensifies Crackdown On Tax Violators: Report

May 25, 2023

Drive to identify fake GST registrations will continue till July 15

Central and state government tax officials have reportedly intensified crackdown on tax violators with over 10,000 fake GST registrations being detected in the first week of their joint drive.

According to an Economic Times report, the campaign against fake invoices and registrations began on May 15 and will continue till July 15.

As part of the drive, officials are verifying addresses through door-to-door visits before taking any action against any entity.

The report stated that in many cases, the officials found forged rent agreements, property tax receipts and electricity bills being used to obtain GST registration.

However, the amount of fake input tax credit received is yet to be ascertained. An official was quoted as saying in the report, “It is premature to assess numbers so far but initial estimates suggest it to be above ₹25,000 crore.”

GST Network (GSTN) is being used to check fake addresses. GSTN provides data analysis and risk parameters for central and state officials to identify cases they want to physically verify.

The crackdown has also received criticism, according to the report, with small scale companies complaining that the crackdown will pose problems as they are using co-working spaces.

Forum for Internet Retailers, Sellers, and Traders (FIRST), President Vinod Kumar told ET that GST officials are asking for physical records and presence of employees and/or directors.

He stated that online sellers often register their places of business as their Chartered Accountant’s premises or co-working spaces to ensure better compliance and cost benefits.

The concern was dismissed by the official quoted by ET, saying that authorities are conducting all due diligence before taking any action.

[Outlook Business]