Nationwide Crackdown on Fake GST Registrations Kicks Off

Starting August 16, tax officers will undertake a two-month drive to target fake GST registrations, as per the Central Board of Indirect Taxes and Customs (CBIC). Following the success of their initial campaign, the authorities aim to identify and address fraudulent activities to protect government revenue.

Starting August 16, tax officers will launch a two-month-long special drive targeting fake GST registrations, the Central Board of Indirect Taxes and Customs (CBIC) has announced.

Following the detection of nearly 22,000 fake registrations and suspected GST evasion amounting to over Rs 24,000 crore in the first such drive last May, the National Coordination Committee—comprising senior Centre and state tax officers—has decided to commence a second special drive to clean up the tax base.

This initiative involves the GST Network, in coordination with the Directorate General of Analytics and Risk Management (DGARM) and CBIC, identifying suspicious and high-risk GSTINs based on data analytics and risk parameters. This information will then be passed to jurisdictional tax officers for further verification.

The Centre and State GST officers will undertake a time-bound verification process of the dubious GSTINs. If these numbers are found to be fictitious or nonexistent, the tax officers will take action to suspend and cancel the registrations while blocking input tax credit (ITC).

The second all-India drive will run from August 16, 2024, to October 15, 2024, to detect and verify suspicious and fake GSTINs to eliminate fraudulent entities from the GST system, thereby protecting government revenue.

Entities often secure fake registrations to fraudulently claim ITC through bogus invoices. The CBIC has also urged field offices to identify masterminds behind such schemes for further action, including recovering government dues and potentially attaching properties or bank accounts.

Officers are also required to report any novel fraudulent methods discovered during verification or investigation. These unique methods will be compiled by the GST Council Secretariat and shared with Central and State Tax administrations.

The first special drive from May 16, 2023, to July 15, 2023, unveiled 21,791 non-existent entities with GST registrations, resulting in the detection of suspected tax evasion amounting to Rs 24,010 crore.