The Central Board of Indirect Taxes and Customs (CBIC) has introduced a new system to assign risk ratings to Goods and Services Tax (GST) registration applications. Under this system, tax authorities will cross-verify the documents submitted by taxpayers during the registration process.
The objective of assigning risk ratings is to identify and mitigate potential risks associated with GST registrations. This move is aimed at preventing instances of fake or bogus registrations, which can lead to tax evasion and other fraudulent activities.
The risk rating system will evaluate various factors, such as the applicant’s background, the nature of the business, the location, and the value of transactions. Based on these factors, the GST registration applications will be categorized into different risk levels.
Once the risk rating is assigned, tax officials will conduct a thorough cross-verification of the submitted documents. This process may involve physical visits to the business premises and scrutiny of financial records and other relevant documents. The purpose is to ensure that the information provided by the applicants is accurate and genuine.
By implementing this system, CBIC aims to strengthen the integrity of the GST registration process and deter individuals or entities from obtaining registrations through fraudulent means. It will help in maintaining a transparent and compliant tax environment.
It is important for taxpayers to ensure that they provide complete and authentic information during the GST registration process. Any discrepancies or false information found during the cross-verification may lead to rejection of the registration application or even legal consequences.
Overall, the introduction of risk ratings and cross-verification procedures by CBIC demonstrates the government’s commitment to ensuring the effectiveness and fairness of the GST system in India.
The Central Board of Indirect Taxes and Customs (CBIC) has implemented measures to combat fake GST registrations in India. To identify potential fraud, the CBIC will assign a risk rating (High, Medium, or Low) to each registration application based on data analytics and risk parameters. The Directorate General of Analytics and Risk Management (DGARM) and GST Network will be responsible for determining the risk ratings.
Tax officers will play a crucial role in verifying the authenticity of the documents submitted by applicants. They will cross-verify the provided documents with municipal records and uploaded documents to ensure accuracy. The address details of the principal and additional places of business will be closely scrutinized and verified for correctness.
To validate the proof of address, tax officers may cross-verify the documents with publicly available sources such as land registry records, electricity distribution companies, municipalities, and local bodies’ websites.
The CBIC emphasizes that the verification of registration applications by tax officers is a vital step in preventing fake or bogus registrations. While various policy and system-level initiatives have been undertaken, strengthening the scrutiny and verification process is essential.
Additionally, tax officers are instructed to check whether the same PAN has been used for multiple registrations within the same state or across different states. The compliance record of the GSTINs associated with the PAN can also be verified through the GST portal.
If an application is found to be deficient, the officer will seek further clarification from the applicant. Failure to respond to such requests may result in the rejection of the application. In cases where the applicant has not undergone Aadhaar authentication or has opted out of it, the GST officer will initiate a physical verification of the business premises.
These guidelines impose additional responsibilities on tax officers to ensure that fraudulent entities do not enter the GST system. By implementing these measures, the government aims to restrict the entry of fraudsters into the GST supply chain.