GST Fake Registration Drive – Precautions to be taken by GST Taxpayers/Registered Persons
GST officials have been forced to launch a special drive against “fake registrations” as the menace refuses to die down, with scammers claiming Input Tax Credit (ITC) and defrauding the exchequer, resorting to a new trick. Instructions have been issued. Starting May 16, 2023, the GST field officer will visit the business premises of the GST Taxpayers. The GST fake registration drive will go on for the next 2 months.
It would have been better if the instructions also included the primary details, which the field officers would verify during field visits so that the taxpayers could keep it ready. Besides this, it will also give more clarity on the details to be called and verified and will not result in calling for non-relevant information, which taxpayers are now facing while obtaining registration.
Since the instructions do not mention such things, we have tried to compile the primary things that every GST Taxpayer should be kept in mind during the field visit.
1. Display of GST Certificate: All registered taxpayers are required to display their GST certificate of registration at a prominent place at their principal place of business as well as at each additional place of business.
2. Display Board: It is also required that all registered taxpayers display their GSTIN on their name board at their principal place of business and also at every other additional place of business.
3. Register all business addresses: Ensure that apart from the principal place of business, all additional places of business where taxable goods are stored, supplied, warehoused etc., are registered with GST.
4. Sale and Purchase Invoices: You should have all invoices for sale and purchase at the registered address of your business.
5. KYC of Authorised Signatory: Keep the KYC documents of the Proprietor, a Director/Partner and the Authorized Person ready for verification, as well as the presence of any of them as best as possible.
6. KYC of Business: Keep the documents related to the business address (original, additional as the case may be) ready for verification, including the latest Electricity Bill, Tax Bill, and copy of the NOC/ Rent Agreement, if not owned.
7. Proper demarcation in case of Multiple Businesses: Ensure that if multiple businesses are registered on the same premises, then proper differentiation is done to identify the area, stock etc.
As the special drive is focused on verifying the existence of persons seeking registration and the existence of a place of business, the above description appears to be sufficient. However, as an added precaution, the following details may be kept updated regularly.
Make sure that the physical stock tallies with the book stock. This is anyway mandatorily required by the law. It is important to emphasise just for clarification that there is no delay in accounting resulting in deferment of physical and book stock.
If, on the visit, the GST officer finds that you are running the business from a different address than the one available on the GST Certificate, he has the power to declare your firm as BOGUS. Then, he will start the proceedings for the same.