Government issues stringent verification process for GST Registrations

 Central Board of Indirect Taxes and Customs (‘CBIC’) has issued an Instruction No. 3/2023, dated June 14, 2023, providing guidelines to all GST officials to strengthen the verification process of GST registration applications.

 

The details of the Instruction are as follows:

 

1.              Proper Officer (‘PO’) to initiate the process of scrutiny and verification immediately on receipt of the application.

 

2.              Proof of address to be cross verified from publicly available sources, such as websites of land registry, electricity distribution companies, municipalities, and local bodies, etc.

 

3.              PO to check risk rating of applications provided by the Directorate General of Analytics and Risk Management (DGARM) and ‘high’ risk applications need special attention.

 

4.              Registrations with same PAN to be checked from GST portal, along with compliance record of said GSTIN.

 

5.              Special attention to be given in following cases:

 

·            Registration on same PAN has been cancelled previously;

·            Registration on same PAN is suspended at the time of verification of a new registration application;

·            Registration application on same PAN has been rejected previously;

·            Place of business appears to be risky based on local risk parameters;

·            Proof of address prima facie appear to be suspicious based on scrutiny of application.

 

6.              Aadhar authentication

 

S. No.	Aadhar authentication not opted	Aadhar authentication opted
1	PO shall immediately initiate physical verification process of the place of business	PO, based on scrutiny of application, can physically verify in time bound manner, to check the authenticity of the applicant.
2	PO must ensure that physical verification report along with other documents, including photographs, is uploaded on the portal in Form GST REG-30 sufficiently in advance of the prescribed time limit.	Till the time a functionality for Aadhaar authenticated cases is made available on GST portal, the concerned Centralized Processing Centre (CPC) officer may get physical verification conducted through jurisdictional officers of the concerned Division/ Commissionerate.

 

7.              Applications should either be accepted or rejected, or a relevant query is raised. However, deemed approval of registration will not be allowed to be done by the PO.

 

8.              CPC Officer through Jurisdictional Commissionerate shall conduct physical verification within 15 days of registration, in the following cases:

 

·            If registration is granted on deemed approval basis; or

·            If registration is granted “High” risk rating cases and where physical verification was not conducted before grant of such registration

 

 | Remarks

 

·            As per the published news, till January 2023, GST has witnessed frauds around ₹ 1.25 Lakhs Crores since the inception of GST and counting. Further, the Government has found tens of thousands of bogus registrations during the ‘GST Fake Registration Drive’ in the past 2 months and counting.

 

·            The tightening the noose on fake registration has yielded good results as government’s revenue has broken GST collection records in past few months.

 

·            At the same time, it leads to grinding weevils with wheat. Genuine taxpayers are also facing hardship and delay in getting their registrations approved.