Unmasking India’s Nationwide Crackdown on Fake GST Registrations

The special drive initiated by the GST Council to combat fake GST registrations and related non-compliances is a proactive step taken by the Indian government. Taxpayers are advised to actively participate in the drive by reviewing their registrations, maintaining proper records, cooperating with authorities, and ensuring compliance with GST laws. By doing so, taxpayers can contribute to a more robust GST ecosystem and help build a stronger economy.

The Government of India, recognizing the importance of curbing fraudulent activities in the Goods and Services Tax (GST) system, has initiated a nationwide campaign to combat fake GST registrations and address tax evasion.

This drive aims to identify and address the misuse of GST registrations, protect government revenue, and promote fair and transparent business practices. In a crucial move, the government has launched this campaign for a period of two months, from May 16, 2023, to July 15, 2023, to crack down on these malpractices and ensure the integrity of the GST system.

This campaign against fake GST registrations represents a crucial step in the ongoing battle against tax evasion and fraudulent practices.

The Escalation of Fake GST Registrations

Since its implementation in July 2017, the GST regime has been a critical tool in transforming India’s indirect tax system. These individuals or entities manipulate or forge documents to acquire GST registrations without engaging in legitimate business activities.

The emergence of fake GST registrations undermines the trust and credibility of the entire tax system, blocking the nation’s progress and prosperity.

The battle against fake GST registrations requires collective effort and a comprehensive approach.

The Damaging Consequences of Fake GST Registrations

  • Revenue losses to government
  • Complicating market fairness
  • Destroying trust in the GST system
  • Discouraging voluntary compliance
  • Creating an uneven playing field for genuine businesses

Government’s Measures to Counter Fake GST Registrations

  • Data Analytics
  • Verification and Cross-Verification
  • Increased Collaboration
  • Stricter Penalties
  • GST Registration Cancellation
  • Blocking and Recovery of Input Tax Credit

Action to be taken by Taxpayers

  • Display name board containing details of name and GSTIN of registered person at entry gate of the principal place of business and every additional place of business;
  • Display GST registration certification at prominent locations at principal place of business and additional place of business;
  • Apart from Principal place of business, all additional place of businesses should be registered and updated on GST portal;
  • KYC documents of Proprietor, one of the Director/Partner and authorized person should be ready for verification;
  • Business address related documents (principal, additional as the case may be) should be ready for verification including copy of latest electricity bill, property tax receipt, NOC / Rent agreement if not owned;
  • Books of accounts should be maintained with proper documents for verification.