Drive Against Fake GST Registration

Recently, CBIC has issued Instruction No. 01/2023-GST dated 04.05.2023 outlining guidelines for launching Special All India Drive against fake registrations. The tax authorities have been proactive to weed out fake GST registrations from system defrauding exchequer in past through extensive use of data analytics and other tools. Taking one step further, it has been proposed that All India Drive is being launched from 16th May 2023 to 15th July 2023 on a mission mode by Central Tax and State Tax Authorities with special focus on cancellation of fake GST registrations and also taking action on blocking of Input tax credit under Rule 86A and recovery of ITC claimed on supplies received from such fake GST registrants by using DGRAM data, BIFA, ADVAIT, NIC Prime, E-Way analytics and human intelligence.
“A Special All-India Drive may be launched by all Central and State tax administrations from May 16, 2023, to July 15, 2023, to detect suspicious/fake GSTINs and to conduct requisite verification and further remedial action to weed out these fake billers from the GST ecosystem and to safeguard Government revenue,” Central Board of Indirect Taxes & Customs (CBIC) said in an instruction to all of its field formation.

Requirement of Identification of Fake GST Registration:-

National Coordination Meeting of the State and Central GST officers discussed the issue of unethical use of the identity of other persons to obtain fake/ bogus registration under GST. Such GST registrations are obtained with the intention to defraud the Government.
Fake/ non-genuine registrations are being used to fraudulently pass on input tax credit by issuing invoices without any underlying supply of goods or services.
This menace of fake registrations and issuance of bogus invoices for passing of fake ITC has become a serious problem.
To identify such fake GST registrations, CBIC has initiated a special drive with the State Government. For this purpose, CBIC (Policy Wing) has Issued detailed guidelines for a special All-India drive against fake GST registration vide Instruction No. 01/2023-GST dated 4th May, 2023.

Guidelines for the Special All-Drive for identification of fake Invoices

In the Meeting, apart from regular action on fake GST invoices and fake GST registrations, there is a need for concerted and coordinated action by Central and State tax authorities to tackle this menace in a more systematic manner.

Therefore, it was decided to carry out a nation-wide Special Drive on an All-India basis to detect suspicious/fake registrations and to conduct requisite verification for timely remedial action to prevent any further revenue loss to the Government.

Accordingly, CBIC has issued following common guidelines to ensure uniformity in the action by the field formations and for effective coordination and monitoring of the action taken during this Special Drive.

Period of Special Drive

A Special All-India Drive to detect suspicious and fake GSTINs may be launched by all centre and state tax administrations from 16th May 2023 to 15th July 2023.