There have been reports of unscrupulous elements obtaining a bogus/counterfeit GST registration and defrauding the Treasury. This false/inauthentic data is used to fraudulently pass on input tax credit to unscrupulous recipients by issuing invoices without an underlying supply of goods or services, or both. This threat of false registration and issuance of false invoices for the transmission of counterfeit ITCs has become a serious problem with fraudulent individuals engaging in dubious and complex transactions resulting in a loss of government revenue.
The central and states tax authorities have found various ways to obtain such false registrations. In some cases, identities of other people such as PAN, Aadhaar, etc. are erased. These were used without his knowledge to obtain GST registration. Forged documents like fake utility bills, property tax receipts, rent agreements etc. are also used as proof of principal place of business to obtain GST registration. In some cases, fake identities have been created from the same photo with different names on different Aadhaar cards. In a recently reported case, it was found that some fraudsters obtained false GST registration based on PAN and Aadhaar numbers of economically disadvantaged persons by fraudulently changing the phone numbers on the Aadhaar cards of these persons by sending them to the Aadhaar service center.
In this context, it is also recognized that the verification of registration applications by the competent authorities is one of the most important steps to contain the threat of false or false registrations. Although various initiatives have been/are being taken at policy and system level, it is important to strengthen the process of monitoring and verification of these registration requests at the level of the Tax and Customs Administration.
Therefore, in order to uniformly strengthen the verification process of registration applications at the end of tax officers in a uniform manner:
Immediately after receiving the application for inclusion in the work list of the respective officer on the ACES-GST application, the officer will start the process of checking and verifying the data entered by the applicant in the application for registration in the GST REG-01 FORM and the documents uploaded by the applicant with the application.
A list of documents to be uploaded by the applicant prescribed in the FORM GST REG-01 regarding photograph, establishment of the business, Business Place Documents, bank Details, etc. The Officer will carefully examine the said documents to ensure that the documents are legible, complete and relevant. In addition, the details or information provided by the applicant in the application must also be carefully reviewed by the authorized officer to verify its completeness, correlate and verify it with the uploaded documents and verify the authenticity of the applicant. Contact details for registered offices and other offices and relevant documents uploaded with the application as proof of address may be carefully reviewed to verify the completeness and accuracy of the addresses of such offices. In addition, where possible, the authenticity of documents provided as proof of address can be verified from publicly available sources, such as the websites of relevant authorities such as land registries, electricity companies, municipalities and local authorities, etc.
To enable a targeted approach in the verification and handling of registration requests, the Directorate General of Analytics and Risk Management (DGARM), carries out a risk assessment of registration requests in coordination with the GSTN for risk classification for each registration application (ARN), based on the analysis of data and risk parameters, and to make it regularly available to the CGST field formations in the form of 400 series reports on the DDM portal. Consequently, the authorized officer will verify the said risk rating made available by the DGARM in relation to the concerned ARN and take it into account in the verification and handling of the said application. Particular attention should be paid to cases where an ARN has been assigned a "high" risk rating.
The authorized officer may also verify whether the registration(s) were previously obtained on the same PAN, either in the same state or in other states. In such cases the current status of the said PAN and other related compliance records of the said Registration Number can also be checked from the portal. The authorized official may also give due consideration and special attention to cases involving inter alia the following circumstances:
(i) Whether previous registration was cancelled by GST official;
(ii) Whether previous registration was suspended at the time of verification by GST offcial;
(iii) Whether the registration application of the applicant has already been rejected on the said PAN.
(iv) whether the applicant's Business Place appears to be risky on the basis of local risk parameters;
(v) Whether the proof of Business address appears to be prima facie doubtful/doubtful on the basis of application and scrutiny of documents.
When it is found that the application is deficient, either with respect to any information or any document required, or when the authorized official requests explanations with respect to any information provided in the application or the documents which accompany or with respect to any other fact, it will notify the applicant electronically in FORM TPS REG-03 within the prescribed period.
Without prejudice to the facts of the case, the authorized official may, among other things, request clarification or information or documents on the following points:
(i) Where a document is incomplete or illegible, the authorized officer may request a complete or legible copy.
(ii) where the "Business Address Proof", is not matching with the document uploaded by the applicant, or where such uploaded document is not appearing as a valid proof of the "Business Address Proof", the proper officer can ask for additional documents to confirm the address proof or details.
(iii) Where the address of the establishment is incomplete or unclear, the authorized official may request for complete and clear information on the address together with the relevant supporting document.
(iv) Where a GSTIN associated with the Applicant's PAN is found to be canceled or suspended earlier, the Competent Officer may, if necessary, seek explanations or reasons from the Applicant.
The Authorized Officer should carefully review any explanation, information or documentation provided by the applicant in FORM GST REG-04 in response to the notification in FORM GST REG-03. When the competent authority is satisfied with the applicant's response in FORM GST REG-04, it may grant the applicant registration within the prescribed time frame. However, if the Authorized Officer is not satisfied with the explanation, information or documentation provided, he or she may ask for the reasons to be established in writing, reject such request and return it electronically to the applicant on FORM GST REG05 within the prescribed timeframe. Further, if the applicant fails to respond to the notice issued under FORM GST REG-03 within the prescribed time, the relevant officer may, for reasons to be established in writing, notify this request, deny it and inform the applicant accordingly. electronically in FORM GST REG-05.
The Authorized Official shall ensure that said notification in FORM GST REG-03, if applicable, is sent electronically within seven business days from the date of submission of the application in cases where the applicant provided the Aadhaar number. and within thirty days in the cases specified in the proviso of sub-rule (1) of Rule 9 of the CGST Rules, 2017.
Where the applicant has not undergone Aadhaar Number Authentication or has not opted for Aadhaar Number Authentication, the authorized official shall conduct a physical verification of the residence in accordance with the provisions of the CGST rules read together with Rule 9 of the CGST regulations. Will start the process immediately. Rule 25 thereof.
In this regard, the concerned officer should also ensure that the physical verification report along with other documents including photographs are uploaded into the system in the GST FORM REG-30 well before the prescribed deadline.
Further, even in cases where the applicant has authenticated the Aadhaar Number, if the relevant officer, based on assessment of the registration application and uploaded documents, believes that a physical verification of the place of residence is required for verification. Authenticity of the applicant, the competent authority can have this physical verification carried out within a certain period of time. Until the functionality to mark the registration request for physical verification in Aadhaar authenticated cases is not available on the ACES-GST portal/application, the relevant Centralized Processing Center (CPC) officer will obtain a physical verification, when deemed necessary, can do. Institution managed by the bailiffs of the concerned department / committee. To this end, until functionality is not available on the ACES-GST Portal/Application, relevant jurisdictions may devise an appropriate mechanism at the local level to ensure that physical transactions related to this essential verification are executed in a timely manner. Related matters and applications for registration are dealt with within the time prescribed in Rule 9 of the CGST Act, 2017.
When dealing with applications for registration, in cases where physical verification is required, the authorized officer must ensure that the application is rejected or granted or that the relevant issue is raised within the prescribed time frame. and there is no granting of application, due to the lack of timely action by the Tax Officer, the registration is approved on a deemed basis. Serious action may be taken in the event of gross negligence on the part of the officer(s) involved.
In addition, when registration is granted on the basis of a deemed approval or when registration is granted by the authorized officer in cases falling within the parameters specified in section 5.4, as well as in cases where a request for registration involves a "high" risk rating (ARN) in the DGARM 400 Report Series, and where physical location verification is not completed prior to granting such registration, the CPC authorities shall record the details of such registration and physical verification of location immediately after the judicial commissioner within 15 days of registration made by the relevant Commissioner in the manner prescribed in Article 25 of the CGST Act, 2017. In addition, the concerned Commissioner may, if required, also obtain such physical verification of the location, including on the basis of risk classification according to various risk parameters and tools available in ADVAIT/BIFA or according to DGARM reports, to verify the authenticity of these recordings. If the registered person does not exist or appears to be fictitious, he can immediately take corrective action.
The Principal Chief Commissioner/ Chief Commissioner of the CGST Zones can closely monitor the status of registration application processing, including physical verification, in their jurisdiction. Whenever it is determined that a deemed approval has been granted to the registration application, the reasons for such approval can be reviewed within a limited time frame.
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