GST All India drive against Fake Registration: 11,140 bogus registrations detected

GST All India drive against Fake Registration

Smt. Nirmala Sitharaman, India’s Finance Minister, supervised over a review meeting of the ongoing campaign against GST All India drive against Fake Registration and fake billing for GST evasion. Revenue Secretary Shri Sanjay Malhotra and CBIC Chairman Shri Vivek Johri attended the meeting. The FM was briefed on the actions being taken to combat fake registrations. The Finance Minister was informed that 11,140 such registrations had already been detected and that action had been taken against them. She  noted the ministry’s continuing efforts, such as OTP-based Aadhar verification and a trial of biometric-based Aadhar authentication during registration in high-risk cases. The CBIC Chairman informed the FM that AI/ML techniques are widely used to identify potential bogus networks.

She also directed that the GST registration procedure be improved further by incorporating technology to prevent such fraudulent businesses from entering the GST ecosystem. The FM proposed a national campaign to communicate the goals of the special push to identify fraudulent entities.

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Johri also said that approximately 60,000 entities were identified based on certain risk parameters and the details were shared with field officers. The idea was that both central and state authorities would physically verify these entities to ensure their existence on the ground.

“That verification process is going on. I think so far, we have been able to complete roughly 43,000 verifications,” Johri said. The CBIC Chairperson also stated that approximately 11,000 entities were discovered to be bogus among the verified cases. These entities were discovered to have passed on bogus input tax credits worth nearly 15,000 crores.

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In response to a question about claims made by some small businesses that they share work space or warehouses and thus have difficulty defending their authenticity during a physical verification, Johri stated that businesses that share work space may have a prober contract to support that. The CBIC Chairperson explained that if the documents demonstrating shared work space are in order, they will not face any problems.

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CBIC has issued instructions to field offices after it was discovered during the ongoing two-month special drive that fraudsters had used people’s PAN and Aadhaar numbers to obtain GST registrations.

To detect fraudulent GST registration, the CBIC will now assign a risk rating to all applications, and tax officers will cross-check the documents submitted by the applicants with municipal records

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