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Fake GST Registrations Exposed: Nearly 22,000 Non-existent Entities Identified
Fake GST Registrations Exposed: Nearly 22,000 Non-existent Entities Identified

New Delhi: Finance Minister Nirmala Sitharaman announced on Tuesday that GST officers, during a two-month-long special drive, uncovered 21,791 fake GST registrations and detected over ₹24,000 crore in suspected tax evasion. In response to a question in the Rajya Sabha, the minister stated that to protect honest taxpayers and prevent undue hardship, instructions were issued to officers to exercise caution in powers such as summons, provisional property attachment, and blocking of tax credit.

A total of 21,791 entities, split between state tax jurisdiction and CBIC jurisdiction, were found to have non-existent GST registrations. The suspected tax evasion amounted to ₹24,010 crore (state - ₹8,805 crore + Centre - ₹15,205 crore) during the special drive. The minister addressed concerns about challenges faced by e-commerce enterprises in obtaining GST registrations, particularly those operating in virtual spaces. She noted that a simplified procedure for the registration of e-commerce operators has been notified, considering their special nature. E-commerce operators can apply for registration in a state or Union Territory where they don't have a physical presence by providing details of the principal place of business located in another state or Union Territory.

GST Rules have been amended to enhance the registration process, incorporating biometric-based Aadhaar authentication for high-risk registrants, along with the verification of original documents. A pilot project for this initiative was launched in Gujarat, extended to Puducherry in July, and further expanded to Andhra Pradesh in November.

Additionally, entities are required to furnish details of bank accounts, name, and PAN of the registered person within 30 days of registration grant or before filing the statement of outward supply, whichever is earlier. Failure to comply with this provision leads to automatic suspension, which can be revoked upon subsequent compliance by the registered persons.

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