Tax authorities are set to crack down on the menace of fake invoicing in the Goods and Services Tax regime.
Tax authorities are set to crack down on the menace of fake invoicing in the Goods and Services Tax regime and have worked out a number of measures, including a two-month special drive, identification of fraudulent GST identification numbers as well as close coordination between state authorities.
The issue was discussed at length at the national co-ordination meeting of the state and central GST officers held at New Delhi on April 24 when a strategy was worked out.
“The issue of unscrupulous elements misusing the identity of other persons to obtain fake/bogus registration under GST, with an intention to defraud the government exchequer, was deliberated.
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Such fake/non-genuine registrations are being used to fraudulently pass on input tax credit to unscrupulous recipients by issuing invoices without any underlying supply of goods or services or both,” said a recent instruction by the (CBIC).
The meeting underlined the need of concerted and coordinated action on a mission mode by central and state tax authorities to tackle this menace in a more systematic manner.
Accordingly, it has been decided to conduct a special all-India drive by all central and state tax administrations during the period from May 16 to July 15 this year to detect suspicious and fake GSTINs and to conduct requisite verification and further remedial action to weed out these fake billers from the GST eco-system and to safeguard government revenue.
“Based on detailed data analytics and risk parameters, GSTN will identify such fraudulent GSTINs for state and central tax authorities. GSTN will share the details of such identified suspicious GSTINs, jurisdiction wise, with the concerned state/central tax administration,” the CBIC further said.
Field formations can also supplement this list by data analysis at their own end using various available analytical tools like BIFA, ADVAIT, NIC Prime, E-Way analytics as well as through human intelligence, Aadhaar database, other local learnings and the experience gained through the past detections and modus operandi alerts.
The CBIC has stressed that action must be taken by field formations in these cases. If, after detailed verification, it is found that the taxpayer is non-existent and fictitious, then the tax officer may immediately initiate action for suspension and cancellation of the registration under Section 29 of Central GST Act. Tax authorities can also consider blocking input tax credit under the Electronic Cash Ledger facility.
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“Action may also be taken to identify the masterminds/ beneficiaries behind such fake GSTIN for further action, whereever required, and also for recovery of government dues and/or provisional attachment of property/ bank accounts,” it said.
A national coordination committee headed by member GST, CBIC and including principal chief commissioners and chief commissioners Delhi and Bhopal CGST zones and chief commissioners and commissioners of state tax of Gujarat, West Bengal and Telangana shall monitor the progress of this special drive.
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