Centre, state tax officers launch special drive to identify fake GST registration, curb evasion

The government has been using robust data analytics and artificial intelligence to identify and track risky taxpayers; sharing data with other law enforcement agencies to detect tax evasion.

Currently, there are 1.39 crore businesses registered under Goods and Services Tax (GST), which was implemented on July 1, 2017. Image Courtesy: PTI

With GST evasion crossing over Rs 1 lakh crore in 2022-23, Centre and state tax officers have initiated a two-month long special drive to identify fake GST registration and nab offenders.

The GST Policy Wing had earlier this month written to Principal Chief Commissioners of Central Tax highlighting that 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.

"This menace of fake registrations and issuance of bogus invoices for passing of fake ITC has become a serious problem, wherein fraudulent people engage in dubious and complex transactions, causing revenue loss to the government," the Central Board of Indirect Taxes (CBIC) had said. Currently, there are 1.39 crore businesses registered under Goods and Services Tax (GST), which was implemented on July 1, 2017.

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The government has been using robust data analytics and artificial intelligence to identify and track risky taxpayers; sharing data with other law enforcement agencies to detect tax evasion. Besides, mandatory Aadhaar-based authentication for new GST registrations as well as centralized suspension of registrations of businesses who default in timely filing of returns are also being used to curb fake registration.

Still, Goods and Services Tax (GST) evasion is on rise with about 14,000 cases detected in 2022-23, up from 12,574 in 2021-22 and 12,596 in 2020-21. The evasion detection doubled to over Rs 1.01 lakh crore in 2022-23, while the Directorate General of GST Intelligence (DGGI) officers made a recovery of Rs 21,000 crore during the fiscal.

During the 'Special All-India Drive' from May 16 to July 15, to detect suspicious/ fake GSTINs, tax officers would also conduct requisite verification and take further remedial action to weed out these fake billers from the GST eco-system. The Special Drive would take place in close coordination between the State and Central tax administrations.

GST Network will identify fraudulent GSTINs for State and Central Tax authorities and share the details jurisdiction wise, with the concerned State/ Central Tax administration for initiating verification drives and conducting necessary action subsequently.

As per GST law, registered traders and businesses will have to display the GST registration number on their business sign boards and the registration certificate in premises. Also, composition dealers have to mention that they are availing the composite scheme and are not entitled to collect taxes from people. If the GSTIN (GST identification number) is not displayed, the registered entity is liable to penalty.

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