New Delhi: Businesses taking Goods and Services Tax (GST) registration without Aadhaar authentication will have to undergo physical verification of their premises, according to a set of norms brought out by the Central Board of Indirect Taxes and Customs (CBIC).

A business having deemed registration where Aadhaar authentication has either not been sought or has failed, has to go for physical verification of the premises and if it is difficult, officials can call for extra documents before deciding on granting registration, said a government official. The new procedure for granting GST registration is part of a set of standard operating procedures.

The idea is to ensure the genuineness of the firms taking GST registration and to check fake invoices and frauds involving tax credits. “At the same time, the procedure will ensure ease of doing business for genuine applicants without any overreach," the official said on condition of anonymity.

Fake invoices and fraud involving tax credits have been a big head ache for GST authorities. In a nation-wide drive launched in November, the Directorate General of GST Intelligence (DGGI) and tax officials have so far arrested 92 persons for availing or passing on ineligible input tax credit through fake invoices and have booked 994 cases against 3161 bogus entities, the official said.

Fake invoices are used to evade GST and income tax and to divert funds from companies. These are also used for showing non-existent transactions to jack up figures on books to obtain loans from banks. These are also used to wrongfully claim GST refunds meant for exporters.

Direct and indirect authorities have been scaling up use of technology and data analysis to identify businesses with poor compliance track record. With the sharp reduction in tax revenues this year, the trend is expected to gain further momentum.

Published On : 30-11-2020

Source : Live Mint