Tax Authorities to Launch Two-Month Crackdown on Fake GST Registrations from August 16
Tax officials are set to initiate a two-month nationwide crackdown on fraudulent GST registrations starting August 16, as announced by the Central Board of Indirect Taxes and Customs (CBIC).
This move follows the discovery of nearly 22,000 fake registrations, linked to suspected GST evasion of over ₹24,000 crore, during a similar drive in May of last year. The National Coordination Committee, comprising senior tax officials from both central and state levels, recently decided to launch this second phase to “clean up the tax base.”
The special operation will see the GST Network, in collaboration with the Directorate General of Analytics and Risk Management (DGARM) and CBIC, identifying suspicious or high-risk GST Identification Numbers (GSTINs) through detailed data analysis and risk assessment. These flagged GSTINs will then be handed over to the relevant jurisdictional tax officers for verification.
Both central and state GST officers will conduct a time-sensitive investigation of these suspect GSTINs. Should any be found to be fictitious or non-existent, immediate actions will include the suspension and cancellation of the registration and the blocking of input tax credit (ITC).
In its directive to field formations, CBIC stated, “The second Special All-India Drive is scheduled from August 16, 2024, to October 15, 2024, aiming to identify and remove suspicious/fake GSTINs, ensuring the integrity of the GST system and protecting government revenue.”
Fraudulent entities often use fake registrations to illegally claim ITC by issuing bogus invoices. The CBIC has also instructed its field offices to track down the masterminds and beneficiaries behind these fake GSTINs, taking further action as needed, which could include recovery of government dues and provisional attachment of properties or bank accounts.
Tax officers are required to document any novel fraudulent schemes discovered during the verification process. These findings will be compiled by the GST Council Secretariat and shared with tax administrations across the country.
In the first drive conducted between May 16, 2023, and July 15, 2023, tax authorities uncovered 21,791 non-existent entities, with a total suspected tax evasion amounting to ₹24,010 crore, split between state and central jurisdictions.
(With inputs from agency)
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