Special Drive for Fake GST Registrations

Recently, CBIC has issued Instruction No. 01/2023-GST dated 04.05.2023 outlining guidelines for launching Special All India Drive against fake registrations. The tax authorities have been proactive to weed out fake GST registrations from system defrauding exchequer in past through extensive use of data analytics and other tools.

Taking one step further, it has been proposed that All India Drive is being launched from 16th May 2023 to 15th July 2023 on a mission mode by Central Tax and State Tax Authorities with special focus on cancellation of fake GST registrations and also taking action on blocking of Input tax credit under Rule 86A and recovery of ITC claimed on supplies received from such fake GST registrants by using DGRAM data, BIFA, ADVAIT, NIC Prime, E-Way analytics and human intelligence.

It has been a common trend that any such drive and actions become a nightmare for genuine taxpayers also. For example, if during physical verification, the registered office address is found closed or not found due to non-availability of concerned person or team operating from Work from Home or from co-working space or from residential premises (specially in case of service providers/freelancers), the authorities simply initiate issuing notices for cancellation of GST registration which hampers the business of the taxpayers. In this Note, we are suggesting some key action points for genuine tax payers to ensure that they navigate any impending risks of cancellation of GST registration due to some reasons:

1). Board and GST Certificate on Wall

2). Multiple registration on same address

3). Addition of all places from where supply being made or received as an additional place of business

4). Aadhar Authentication

5). Maintenance of accounts and records at each place of business

6). Review of compliance status of supplier of goods or services

7). Consequences of non-compliance