Over 4,900 Fake GST Registrations Cancelled, Exposing Rs 15,000 Crore Tax Evasion

GST authorities have cancelled over 4,900 fake Goods and Services Tax (GST) registrations. During the current two-month effort to filter out false GSTINs, which will finish on July 15, this strict action has exposed startling amounts of tax evasion totaling Rs 15,000 crore, PTI Reported.

Shashank Priya, a member of the Central Board of Indirect Taxes and Customs (CBIC), stated that the significant amount of fictitious registrations discovered during the drive highlights the need for policy adjustments to strengthen the Goods and Services Tax (GST) registration and return filing procedure.

For physical verification, more than 69,600 GST Identification Numbers (GSTINs) have been chosen, of which 59,178 have already been confirmed by field agents as part of the ongoing pan-Indian special drive. "16,989 GSTINs are found to be non-existent. 11,015 GSTINs have been suspended and 4,972 have been cancelled," Priya said at Assocham's National Conclave on GST.

He added that since May 16, tax authorities have discovered tax fraud totaling Rs 15,035 crore and have banned Rs 1,506 crore in ITC. There has been a recovery of almost Rs. 87 crore. "This shows that we need to plug the loopholes in registration and return filing... More refinement in the risk parameters for registration verification is required," Priya said.

Businesses who register for GST are given a special GSTIN, which is needed to submit tax returns and obtain ITC. Businesses who operate in numerous states must obtain a GST identification number in each state where they do business.

In terms of trade facilitation, Priya noted that by adding more fields to the monthly return form GSTR-3B, commerce will be made easier. Since the start of the tax system six years ago, the number of GST registered taxpayers has more than doubled to 1.40 crore.

The two-month special campaign to prevent false GST registrations started on May 16 and will expire on July 15. False registration is a problem under GST because thieves falsely claim ITC by creating phoney invoices and steal money from the exchequer.