The Central Board of Indirect Taxes and Customs (CBIC) in India has announced that it has cancelled more than 4,900 registrations and identified tax evasion amounting to over Rs 15,000 crore ($2 billion) as part of a two-month drive to eliminate fraudulent Goods and Services Tax Identification Numbers (GSTINs). The campaign, which began on May 15 and will conclude on July 15, aims to tighten the GST registration and return filing process.
During the ongoing pan-India special drive, over 69,600 GSTINs were selected for physical verification, of which 59,178 have been verified by field officers so far. Among those verified, 16,989 were found to be non-existent and 11,015 have been suspended. Additionally, 4,972 registrations have been cancelled.
The CBIC member Shashank Priya revealed that tax officers have detected tax evasion amounting to Rs 15,035 crore ($2 billion) during the drive and have blocked input tax credit (ITC) worth Rs 1,506 crore ($201 million). A total of Rs 87 crore ($11.6 million) has been recovered. These alarming figures highlight the need for policy changes to address the loopholes in the current registration and return filing system.
Under the GST regime, businesses are issued a unique GSTIN, which is necessary for claiming ITC and filing tax returns. Companies operating in multiple states are required to obtain a GST identification number in each respective state. This system, however, has been exploited by those engaging in fraudulent activities, prompting the government to take action.
Shashank Priya emphasized the need for refining risk parameters in the registration verification process to ensure stricter scrutiny of applicants. The drive to combat fake GSTINs and tax evasion is part of the government’s broader efforts to streamline the taxation system and enhance transparency.
The findings of this two-month drive serve as a wake-up call for the authorities to address the challenges posed by fake registrations in the GST system. By identifying and rectifying these issues, the government aims to create a fair and efficient tax environment that encourages compliance and discourages tax evasion.
The CBIC’s actions also send a strong message to businesses and individuals involved in tax evasion. With enhanced scrutiny and stricter measures in place, those attempting to defraud the system will likely face severe consequences.
The ongoing drive against fake GSTINs is an important step towards ensuring a transparent and accountable tax system in India. The government’s commitment to tackling tax evasion and strengthening the GST registration process will ultimately benefit the entire nation by promoting a level playing field for businesses and ensuring the collection of rightful tax revenue.
