Govt to launch all-India drive to weed out fake GST registrations from 16 August
Central and state authorities will launch a two-month-long nationwide drive against fake goods and services tax (GST) registrations to weed out bogus entities used for evading tax, showed an official order from the Central Board of Indirect Taxes and Customs (CBIC). The drive, which will run from 16 August to 15 October, seeks to detect suspicious or fake GST registrations and conduct thorough verification to weed out entities engaging in fake invoicing, according to the order.
If it is found that a taxpayer is non-existent and fictitious, immediate action will be taken tosuspend and canceltheirGST registration. Also, steps will be taken to block input tax credits given and availed of based on fake invoices without any delay, the order said.
The details of the recipients to whom input tax credits have been passed by such non-existent taxpayers may be identified through the details furnished in tax return forms relating to sales, the order said. Steps will be taken to recover the input tax credits wrongly used by the business that used fake invoices without any underlying supply of goods or services.
The drive has been planned after a similar effort last year was found to be effective in checking tax evasion. Entities issuing fake invoices have been a headache for the tax authorities as they game the indirect tax system in which businesses can offset their final tax liability or part of it using credit for the taxes paid on raw materials and services used in their operations.
The technology-intensive nature of GST and the formalisation of the economy has, however, helped the authorities in the battle against those dealing with fake invoices. Experts said the second all-India drive against fake GST registrations is a
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