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Second Special All-India Drive Against Fake GST Registrations:
Guidelines and Implementation
Introduction
In an effort to maintain
the integrity of the GST system and protect government revenues, the Central
Board of Indirect Taxes and Customs (CBIC) has announced the commencement of
the Second Special All-India Drive against fake GST registrations. This initiative,
following the success of the previous drive conducted in 2023, aims to identify
and eliminate suspicious or fake registrations that are being used to issue
fraudulent invoices and evade taxes.
The first special
All-India drive was carried out between 16th May 2023 and 14th August 2023. The
drive was notably effective in identifying and removing fake registrations from
the GST ecosystem. To further this effort, the National Coordination Committee,
headed by the Member (GST) of CBIC, decided to launch a second drive. This new
initiative will run from 16th August 2024 to 15th October 2024, involving both
Central and State tax authorities in a coordinated effort to clean up the tax
base.
Key Guidelines for the
Special Drive
The following guidelines
have been issued to ensure the effectiveness and uniformity of the drive across
all jurisdictions:
1. Period
of Special Drive:
o The
second Special All-India Drive will be conducted from 16th August 2024 to 15th
October 2024. During this period, tax authorities will focus on detecting and
verifying suspicious GST Identification Numbers (GSTINs) and taking necessary
remedial actions to remove fake registrants from the system.
2. Identification
of Fraudulent GSTINs:
o The
GST Network (GSTN), in collaboration with the Directorate General of Analytics
and Risk Management (DGARM), CBIC, will identify high-risk and suspicious
GSTINs using advanced data analytics and risk assessment tools. This
information will be shared with the relevant Central and State tax authorities
for verification.
o Tax
authorities can also supplement this list with their own data analysis, using
various tools such as BIFA, GAIN, ADVAIT, NIC Prime, E-Way Bill Analytics, and
others.
3. Action
to be Taken by Field Formations:
o Upon
receiving data from GSTN, jurisdictional tax officers will conduct timely
verifications of the suspicious GSTINs. If a taxpayer is found to be
non-existent or fictitious, immediate action will be taken to suspend and
cancel the registration as per Section 29 of the CGST Act.
o Tax
officers will also consider blocking the input tax credit (ITC) in the
Electronic Credit Ledger, as per Rule 86A of the CGST Rules. They will further
identify and take action against the recipients who have availed ITC based on
invoices from such non-existent taxpayers.
o Coordination
between different tax jurisdictions will be facilitated through the ‘Initiate
Enquiry’ functionality in the Enforcement module of the GSTN Back Office, with
designated nodal officers overseeing the process.
4. Feedback
and Reporting Mechanism:
o Tax
authorities are required to submit weekly action-taken reports, detailing the
verification outcomes and any novel modus operandi discovered during the drive.
These reports will be compiled by the GST Council Secretariat and presented to
the National Coordination Committee for further analysis and dissemination.
Press the button Click here to download the Instruction No. 02/2024-GST dated the 12th August 2024
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