The process for granting Goods and Services Tax (GST) registration will now be more stringent with a focus on ‘High Risk’ applicants. The Central Board of Indirect Taxes and Customs (CBIC) on Wednesday came out with detailed guidelines for processing of applications for registration.
“Verification of applications for registration by the proper officers is one of the most crucial steps in the direction of preventing the menace of fake or bogus registrations,” the instruction said. It is part of two month, begun last month special drive to weed out fake registration and fake input tax credit in order to check revenue losses. Once the application is received, the officer shall initiate the process of scrutiny and verification of the details filled and the documents uploaded by the applicant. The officer will also examine the authenticity of the documents furnished as proof of address.
As the process of categorising applicants in three category – low, medium and high, is already being implemented by the Directorate General of Analytics and Risk Management (DGARM) and GSTN, the officer will check the risk rating while verifying and processing the said application. “Special attention needs to be paid to the cases where “High” risk rating has been assigned,” the instruction said.
Special attention will be paid to cases where any registration obtained on the PAN of the applicant has been cancelled previously or suspended at the time of new application. The officer will also see whether any application for registration on the PAN of the applicant has been rejected previously, whether the place of business of the applicant appears to be risky based on local risk parameters and whether the proof of address of place(s) of business appear to be suspicious/ doubtful.
While the physical verification of place of business will be must in case of Aadhaar authentication, but can be initiated in other cases too. While processing the applications for registration, including in those cases where physical verification is to be conducted, it will be ensured by the proper officer that the application is either rejected or accepted or relevant query is raised within the prescribed time limit and no application for grant of registration is approved on deemed basis for want of timely action on the part of tax officers.
“Strict view may be taken where any gross negligence is observed on part of the concerned officer(s),” the instruction said.
CBIC has noted that various modus operandi of obtaining such fake registrations. While there have been cases of misusing identities of other persons like PAN, Aadhaar, etc. without their knowledge, instances of forging documents, such as forged electricity bills, property tax receipts, rent agreements, etc. have also been found to use as proof of principal place of business In one of the cases detected recently, it was found that fraudsters took the persons from economically weaker sections Aadhaar Seva Kendra to get the phone number modified on the unique ID and getting their Aadhaar Cards linked to dummy mobile numbers by using their thumb impression. These identities were used to take registration.