FM Sitharaman Exposes 21,791 Fake GST Registrations, Rs 24,000 Cr Tax Evasion

On Tuesday, Finance Minister Nirmala Sitharaman announced that GST officers found 21,791 fake GST registrations and suspected tax evasion of over Rs 24,000 crore in a two-month special drive. 

In a written response in Rajya Sabha, the minister emphasized the issuance of instructions to officers, urging them to be cautious and considerate in using powers like summons, provisional property attachment, and tax credit blocking to protect honest taxpayers and prevent undue hardship.

Sitharaman reported that a total of 21,791 entities with GST registration, split between state tax and CBIC jurisdictions, were found to be non-existent. 

The special drive conducted by the Central Board of Indirect Taxes and Customs (CBIC) from May 16 to July 15, 2023, revealed a suspected tax evasion amounting to Rs 24,010 crore, with Rs 8,805 crore attributed to state jurisdiction and Rs 15,205 crore to the Centre. 

The minister shared this information in response to a question about the number of entities with fake registrations and the total amount of evasion detected during the special drive.

In response to a question about challenges faced by e-commerce businesses in getting GST registrations, particularly those operating online, Sitharaman stated that a simplified registration procedure for e-commerce operators has already been introduced. For e-commerce operators without a physical presence in a specific state or Union Territory, they can apply for registration by providing details of their main business location in another state or Union Territory.

Additionally, GST Rules have been amended to enhance the registration process. This includes biometric-based Aadhaar authentication for high-risk registrants, along with the verification of original documents. A pilot project for this was initially launched in Gujarat, and later extended to Puducherry in July and to Andhra Pradesh in November.

Furthermore, registered individuals must provide details of their bank account, name, and PAN within 30 days of registration approval or before submitting the statement of outward supply, whichever comes first.

Entities failing to provide details of valid bank accounts within the specified timeframe will be automatically suspended by the system. However, if registered individuals later comply with this requirement, the system-based suspension will be automatically lifted.

Also Read: During Special Drive, GST Department Identifies 21,791 Cases of Falsified Registrations