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

Finance Minister Nirmala Sitharaman revealed on Tuesday that a special two-month drive by GST officers has deciphered 21,791 instances of fraudulent GST registrations and suspected tax evasion amounting to over 24,000 crore.

Responding in writing to a question in the Rajya Sabha, the minister highlighted that instructions have been given to GST officers to be cautious and considerate when considering such provisional property attachment, summons, and tax credit blocking. These measures are designed to safeguard honest taxpayers and prevent undue hardships on them.

21,791 entities, including 11,392 under state tax jurisdiction and 10,399 under CBIC jurisdiction, were found with fake GST registrations. Sitharaman disclosed a total suspected tax evasion of 24,010 crore (8,805 crore from states and 15,205 crore from the Centre) during the CBIC's special campaign from May 16 to July 15, 2023.

Regarding challenges faced by e-commerce companies in obtaining GST registration, especially those operating on online platforms, Sitharaman noted that a simplified registration process for e-commerce players has been considered, taking into account their unique mode of operation.

This process allows e-commerce players to apply for registration in a state or Union Territory where they lack a physical presence by providing details of their main business operating place located in another state or Union Territory.

Furthermore, amendments have been made to the GST rules to streamline the registration process, including the introduction of biometric-based Aadhaar authentication for high-risk registrants, along with document verification.

The pilot project for this implementation started in Gujarat and was later expanded to include Puducherry in July, followed by Andhra Pradesh in November.

Moreover, businesses need to provide their bank account information, name, and Permanent Account Number (PAN) card within 30 days of getting their registration approved or before submitting the statement of outward supply, whichever happens first.

The system automatically suspends the registration if valid bank account details are not provided within the given time frame. Nevertheless, if the registered individuals fulfill this requirement afterward, the system-based suspension will be automatically lifted.

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