Dear Professional Colleagues,

Greetings of the Day !

The Central Board of Indirect taxes and Customs (GST Policy Wing) had issued Instruction No. 01/2023-GST dated May 4, 2023, regarding Guidelines for Special All-India Drive against fake registrations– regarding.

Highlights

• A nation-wide effort in the form of a Special Drive should be launched on All-India basis to detect such suspicious/ fake registrations and to conduct requisite verification for timely remedial action to prevent any further revenue loss to the Government.
• It was decided that common guidelines may be issued to ensure uniformity in the action by the field formations and for effective coordination and monitoring of the action taken during this Special Drive.
• Following guidelines are issued for such concerted action on fake dealers/ fake billers in a mission mode:

(i)                  Period of Special Drive: 16th May 2023 to 15th July 2023.

(ii)                 Identification of fraudulent GSTINs: Based on detailed data analytics and risk parameters, GSTN will identify such fraudulent GSTINs for State and Central Tax authorities. GSTN will share the details of such identified suspicious GSTINs, jurisdiction wise, with the concerned State/ Central Tax administration for initiating verification drive.

(iii)               Information Sharing Mechanism: Successful implementation of the Special Drive would require close coordination amongst the State Tax administrations, and between State and Central tax administrations. For this purpose, a nodal officer shall be appointed immediately by each of the Zonal CGST Zone and State to ensure a seamless flow of data and for coordination.

(iv)               Action to be taken by field formations: On receipt of data from GSTN/DGARM through the Nodal Officer, a time-bound exercise of verification of the suspicious GSTINs shall be undertaken by the concerned jurisdictional tax officers. If, after detailed verification, it is found that the taxpayer is non-existent and fictitious, then the tax officer may immediately initiate action for suspension and cancellation of the registration of the said taxpayer in accordance with the provisions of section 29 of CGST Act, read with the rules thereof.

Additionally, the details of the recipients to whom the input tax credit has been passed by such non-existing taxpayer may be identified through the details furnished in FORM GSTR-1 by the said taxpayer. Suitable action may be initiated for demand and recovery of the input tax credit wrongly availed by such recipient on the basis of invoice issued by the said non-existing supplier.