The GST Board, made up of the Center’s and states’ finance ministers, has already taken a number of steps, including filing sequential monthly returns, to curb counterfeit ITC in the system.
A number of states are already running a pilot with biometric authentication and geotagging.
CBIC is working on biometric authentication of risky entities under GST as it appears to crack down on fraudsters who misuse other people’s PAN and Aadhaar to obtain GST registration, said CBIC chief Vivek Johri.
Johri further said that the IRS is also discussing some more tightening in the GST filing system to limit the scope of Input Tax Credit (ITC) claiming, when taxes have not been paid by suppliers in the supply chain.
The biometric authentication of authorized representatives or directors or partners of a company will be performed for new registration applications and existing companies registered under Goods and Services Tax (GST) if tax officials suspect that the entities are only set up to fraudulently claim ITC.
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Also, geo-tagging of all entities is being scheduled by the officials of the Central Board of Indirect Taxes and Customs (CBIC) to verify that the address provided during the GST registration is the place from which the entity operates, Johri told reporters.
A biometric authentication and geotagging pilot project is already underway in a number of states, and subject to the outcome and assessment of digital infrastructure requirements, the project will be launched across India.
“We are trying to see how we can further tighten up the system… We used to use OTP-based authentication before. Now we also discuss biometric authentication. Which would mean that in suspected cases, individuals would be asked to go to an Aadhaar center to have their biometrics verified,” Johri said.
The CBIC chief further said that during the ongoing fight against false registration, GST agents identified about 12,500 bogus entities, which were used to claim false ITC and defraud the treasury.
Johri said there are certain locations where fake entities are rampant, such as Delhi, Haryana and Rajasthan.
Certain parts of Gujarat, Noida, Kolkata, Assam, Telangana, Tamil Nadu and Maharashtra also have fake companies with GST registration.
Sectors where false entities appear include metal or plastic scrap and waste paper.
“We also notice that it is generated for services. So personnel services and advertising services have instances of false billing,” added Johri.
In regards to controlling false ITC claims, Johri said the IRS has tightened the system, but there is still some room for taxpayers to edit how much ITC they can claim in GSTR-2A.
That’s because concerns have been raised by the trade, the supplier is not uploading invoices on time, and there are some invoices for which they have already made payment, but they cannot take credit because they have not been uploaded, he added.
“We have allowed some editing facilities. We will see how we can tighten that up so that the space for passing certain ITC is reduced,” added Johri.
The GST Board, made up of the Center’s and states’ finance ministers, has already taken a number of steps, including filing sequential monthly returns, to curb counterfeit ITC in the system.
(This story has not been edited by News18 staff and was published from a syndicated news agency feed – PTI)
