The Central Board of Indirect taxes and Customs (GST Policy
Wing) has issued Instruction No. 01/2023-GST dated May 4, 2023, providing
guidelines for a Special All-India Drive against fake registrations.
Highlights of the instruction are as follows:
Special Drive: A nation-wide
effort should be launched on an All-India basis to detect suspicious/fake
registrations and conduct necessary verification to prevent further revenue
loss to the Government.
Common Guidelines: Common
guidelines have been issued to ensure uniformity in action by field formations
and to facilitate effective coordination and monitoring during the Special
Drive.
Period of Special Drive: The
Special Drive will be conducted from May 16, 2023, to July 15, 2023.
Identification of fraudulent
GSTINs: Based on detailed data analytics and risk parameters, GSTN (Goods and
Services Tax Network) will identify fraudulent GSTINs for both State and
Central Tax authorities. The details of these suspicious GSTINs, categorized by
jurisdiction, will be shared with the respective State/Central Tax
administration for verification.
Information Sharing Mechanism:
Close coordination among State Tax administrations, as well as between State
and Central tax administrations, is crucial for the successful implementation
of the Special Drive. Nodal officers will be appointed by each Zonal CGST Zone
and State to ensure seamless data flow and coordination.
Action by Field Formations:
Upon receiving data from GSTN (or DGARM) through the Nodal Officer, the tax
officers in the respective jurisdiction will conduct a time-bound verification
of the suspicious GSTINs. If it is found that the taxpayer is non-existent and
fictitious after detailed verification, the tax officer will initiate immediate
action to suspend and cancel the registration of the taxpayer under the
provisions of Section 29 of the CGST Act, along with the relevant rules.
Recovery of Input Tax Credit:
In addition to canceling the registration of the non-existing taxpayer, the
recipients who have received input tax credit from such non-existing taxpayers
will be identified through the details provided in FORM GSTR-1. Suitable action
will be taken to demand and recover the input tax credit wrongly availed by
such recipients based on the invoices issued by the non-existing supplier.
These guidelines aim to facilitate a coordinated effort to combat fake
registrations, protect government revenue, and take appropriate action against
non-existent and fraudulent taxpayers.
