Checking fraud: Government to tighten GST registrations

New Delhi, July 12, 2023

Amid a massive pile of cases of fake registrations and misuse of benefits, the GST Council on Tuesday decided to tighten the rules to check the menace after it discovered irregular gains of Rs 17,000 crore by fraudulent entities.

It is amending the rules to mandate the bank account details should be submitted either within 30 days of obtaining a registration or before filing of statement of outwards supply. Entities that do not provide the details of their bank account will have to face system-based suspension of their registration. The suspension will, however, be automatically restored once the details are provided, an official statement said. The government will also do away with the requirement that the physical verification of business premises should be conducted in the presence of the applicant. It will also provide for physical verification in high risk cases even where Aadhaar hasbeen authenticated. A pilot to be conducted in Puducherry for risk-based biometricbased Aadhaar authentication of registration applicants. Andhra Pradesh also intends to join this pilot, the release said.

The issue was discussed in detail during a meeting of officials on Monday, revenue secretary Sanjay Malhotra told reporters. The moves come at a time when the government has discovered that around 17,000 of the 60,000 suspect registrations verified by it have proved tobe fake. As part of a twomonth campaign, around 69,000 such accounts had been identified using artificial intelligence.

“Process of GST registration has been made a bit more rigorous to avoid ‘fake registrations’. While this was perhaps necessary in light of several such cases which came to light recently, it needs to be ensured that the process is implemented in a manner which is not time consuming,” said Pratik Jain, a partner at consulting firm Price Waterhouse & Co.

[The Times of India]