CBIC issued Guidelines for Conducting a Second Special All-India Drive against Fake Registrations

The Central Board of Indirect Taxes and Customs (CBIC) has issued Guidelines for Conducting a Second Special All-India Drive against Fake Registrations.

The Relevant Text is given as follows:

Attention is invited to Instruction No. 01/2023-GST dated 04.05.2023 vide which guidelines were issued for conducting a special All-India drive during the period from 16th May 2023 to 15th July 2023 (which was further extended till 14th August 2023), for verification and detection of suspicious/ fake registrations and for taking timely remedial action to prevent any further revenue loss to the Government.

A National Coordination Committee, led by Member (GST), CBIC, and comprised of top officers from several states and the centre, was constituted to make decisions and monitor the progress of this special drive.

A meeting of the National Coordination Committee was held on 11th July 2024, during which it was discussed that the special All-India drive performed in 2023 was quite efficient in sorting out fake registrations.

The Committee felt that there may be a need for further focused and coordinated action by Central and State tax authorities to clean up the tax base and to take concerted action against the fake registrations and fake/bogus invoices, on the same pattern as was done during the said drive.

As a result, it has been decided that the Central and State tax authorities will conduct a second special All-India drive against fake registrations for two months, beginning on August 16, 2024.

The National Co-ordination Committee also decided that like the previous drive, a set of common guidelines may be issued to ensure uniformity in action by the field formations and for effective coordination and monitoring of the action taken during this special drive.

Guidelines for such concerted action on suspicious/ fake registrations during the Special All-India Drive

Period of Special Drive

The second Special All-India Drive may be launched by all Central and State Tax administrations from 16th August 2024 to 15th October 2024 to detect suspicious/ fake GSTINs and to conduct requisite verification and further remedial action to weed out these fake billers from the GST eco-system and to safeguard Government revenue.

Identification of Fraudulent GSTINs

GSTN, in collaboration with CBIC’s Directorate General of Analytics and Risk Management (DGARM), will identify suspicious/high-risk GSTINs based on detailed data analytics and risk parameters for verification by State and Central Tax authorities during the drive and will share the details of such suspicious GSTINs, jurisdiction by jurisdiction, with the relevant tax administrations.

In case of such suspicious GSTINs falling under the jurisdiction of Central Tax, the details will be shared with the Central Tax authorities by GSTN through DGARM. Besides, the State and Central Tax Authorities, may, at their own option, supplement this list by data analysis/ intelligence gathering at their end, using various available analytical tools like BIFA/ GAIN, ADVAIT, NIC Prime, E-Way Bill Analytics etc., as well as through human intelligence, modus operandi alerts, experience gained through the past detections, as well as the first special All-India drive.

Action to be taken by Field Formations

i. On receipt of data from GSTN, a time-bound exercise of verification of the suspicious GSTINs shall be undertaken by the concerned jurisdictional tax officer(s). If, after thorough verification, it is discovered that the taxpayer is non-existent and fictitious, the tax officer may immediately take action to suspend and cancel the taxpayer’s registration in accordance with the provisions of Section 29 of the CGST Act, read with the rules thereto.

ii. Further, the matter may also be examined for blocking of input tax credit in Electronic Credit Ledger as per the provisions of Rule 86A of CGST Rules without any delay. Furthermore, the details of the beneficiaries to whom the input tax credit was passed by the non-existent taxpayer can be discovered using the information provided in FORM GSTR-1 by the aforementioned taxpayer.

iii. Where the recipient GSTIN pertains to the jurisdiction of the said tax authority itself, suitable action may be initiated for demand and recovery of the input tax credit wrongly availed by such recipient on the basis of an invoice issued by the said non-existent supplier, without underlying supply of goods or services or both.

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