Special Drive Fake Registration GST Vivek

info@lawbrothers.
com;
Vivek Laddha (LL.B., CA, CMA, CS),

Manish Gupta (FCA, B.Com)
Pooja Patwari (FCA, M.Com)
Authors- Taxmann
SUBJECT:
Issues Pertaining to Special

drive against fake
registrations under GST
Bone of Conte....xt !!
GUIDELINES FOR SPECIAL ALL-INDIA DRIVE AGAINST FAKE

REGISTRATIONS
INSTRUCTION NO. 1/2023-GST [F. NO. CBIC- 20/16/05/2023-

GST] , DATED 4-5-2023
❑ Period of this Drive- 16th May 2023 to 15th July 2023.
❑ Backdrop: Fraudulent Credit amount is doubled in the previous

financial year.
Game of ‘F’
• Fake- Registration/ Fraudulent Registration; Suspicious
Registration
• Fake Billers
• Fake Dealers
• Fictitious taxpayer / Non existent taxpayer
• Fraudulent ITC
Action
• Initiate the verification drive
• Conducting remedial action to weed out from GST Eco system and
safeguard government revenue
➢ Section 29
➢ Rule 86A
➢ Demand & Recovery of ITC availed by the recipient
➢ Action against the masterminds and beneficiaries
➢ Recovery of government dues
➢ Provisional attachment/ bank accounts etc.
• Similar action for the linked or suspicious registration
Issue- 1
❑ Do we have any change in the law by way of this instruction?
Sec 168:
The Board may, if it considers it necessary or expedient so to do for the purpose of
uniformity in the implementation of this Act, issue such orders, instructions or
directions to the central tax officers as it may deem fit, and thereupon all such
officers and all other persons employed in the implementation of this Act
shall observe and follow such orders, instructions or directions.
Issue- 2
❑ Verification is………? (Physical Verification or something else)
❑ Verification for whom? (New applicant or existing registered
person)
❑ Verification- Should it means Inspection or Search?
❑ Verification of what- Documents, Sales Ledger, Purchase Ledger,
Books of Accounts etc.?
Issue- 3
❑ Verification, is this backed by law? Periphery of present law: [Section 67,
Section 71, Rule 25]
▪ Rule 25
▪ Section 67
▪ Section 71
▪ Reason to suspect Vs Reason to believe
❑ Can they conduct Inspection u/s 67(1) this time?

❑ Authorisation letter in each of the case
❑ Modus operandi in each of the case?
❑ Will they just check records?
❑ Can they carry the records?
❑ Photographs?
❑ Physical stock
❑ Mobile etc.
Issue- 3 Contd..
Physical verification of business premises in certain cases (Rule 25 of

CGST Rules):
Where the proper officer is satisfied that the physical verification of the
place of business of a person is required due to failure of Aadhaar
authentication or due to not opting for Aadhaar authentication before the
grant of registration, or due to any other reason after the grant of
registration, he may get such verification of the place of business, in the
presence of the said person, done and the verification report along with the
other documents, including photographs, shall be uploaded in FORM GST
REG-30 on the common portal within a period of fifteen working days
following the date of such verification.
Issue- 3 Contd..
❑ What is the present law?
67.(1) Where the proper officer, not below the rank of Joint Commissioner, has reasons to
believe that—
(a)a taxable person has suppressed any transaction relating to supply of goods or services or
both or the stock of goods in hand, or has claimed input tax credit in excess of his entitlement
under this Act or has indulged in contravention of any of the provisions of this Act or the rules
made thereunder to evade tax under this Act; or
(b)any person engaged in the business of transporting goods or an owner or operator of a
warehouse or a godown or any other place is keeping goods which have escaped payment of
tax or has kept his accounts or goods in such a manner as is likely to cause evasion of tax
payable under this Act,
he may authorise in writing any other officer of central tax to inspect any places of business of
the taxable person or the persons engaged in the business of transporting goods or the owner or
the operator of warehouse or godown or any other place.
(2) Where the proper officer, not below the rank of Joint Commissioner, either pursuant to an
inspection carried out under sub-section (1) or otherwise, has reasons to believe that any goods
liable to confiscation or any documents or books or things, which in his opinion shall be useful
for or relevant to any proceedings under this Act, are secreted in any place, he may authorise in
writing any other officer of central tax to search and seize or may himself search and seize
such goods, documents or books or things:
Provided that where it is not practicable to seize any such goods, the proper officer, or any
officer authorized by him, may serve on the owner or the custodian of the goods an order that
he shall not remove, part with, or otherwise deal with the goods except with the previous
permission of such officer:
Provided further that the documents or books or things so seized shall be retained by such
officer only for so long as may be necessary for their examination and for any inquiry or
proceedings under this Act.
Issue- 3 Contd..
❑ What is the present law?
Access to business premises.

Sec 71. (1) Any officer under this Act, authorised by the proper officer not below the rank of
Joint Commissioner, shall have access to any place of business of a registered person to
inspect books of account, documents, computers, computer programs, computer software
whether installed in a computer or otherwise and such other things as he may require and
which may be available at such place, for the purposes of carrying out any audit, scrutiny,
verification and checks as may be necessary to safeguard the interest of revenue.
(2) Every person in charge of place referred to in sub-section (1) shall, on demand, make
available to the officer authorised under sub-section (1) or the audit party deputed by the
proper officer or a cost accountant or chartered accountant nominated under section 66—
(i) such records as prepared or maintained by the registered person and declared to the proper
officer in such manner as may be prescribed;
(ii) trial balance or its equivalent;
(iii) statements of annual financial accounts, duly audited, wherever required;
(iv) cost audit report, if any, under section 148 of the Companies Act, 2013 (18 of 2013);
(v) the income-tax audit report, if any, under section 44AB of the Income-tax Act, 1961 (43 of
1961)41; and
(vi) any other relevant record,
for the scrutiny by the officer or audit party or the chartered accountant or cost accountant
within a period not exceeding fifteen working days from the day when such demand is made,
or such further period as may be allowed by the said officer or the audit party or the chartered
accountant or cost accountant
Issue- 4
❑ Period of this Drive- 16th May 2023 to 15th July 2023.
❑ Could not they visit earlier?

❑ Can not they verify after this period?
Issue- 5
❑ Is there any need to apply rule of interpretation for reading the
instruction?
▪ Usage of the word ‘Verification’ solely : 6 times
▪ Usage of the word ‘verification and investigation’ : 2 times
Instance:
Further, during the investigation/verification, if any linked suspicious GSTIN is
detected, similar action may be taken/initiated in respect of the same.
Instance:
If any novel modus operandi is detected during the verification/investigation, the
same may also be indicated in the said action taken report.
Instance:
If, after detailed verification, it is found that the taxpayer is non-existent and
fictitious, then the tax officer may immediately initiate action for suspension and
cancellation of the registration of the said taxpayer in accordance with the provisions
of section 29 of CGST Act, read with the rules thereof.
Issue- 6
❑ Day and Time of verification?
Issue- 7
❑ Who is the proper officer?
Jurisdictional Officer/ DGGST/Anti Evasion
Form- Not Prescribed
❑ Can any of CGST officer/ SGST officer conduct the verification?

Issue- 8
❑ Possible grounds based on which the field officers of this drive
may visit your premise ?
• Tools and data available

Like:
• Multiple GSTIN at a place
• GST Period
• Common Ownership
• Surge/ declination of turnover/ tax
• EWB
• GSTR 1 – EWB- 2B- 2A
• Filing of returns- periodicity
Issue- 9
❑ Display of GSTIN and GST- RC
Section 18: Display of registration certificate and Goods and Services Tax
Identification Number on the name board
(1)Every registered person shall display his certificate of registration in a prominent
location at his principal place of business and at every additional place or places of
business.
(2)Every registered person shall display his Goods and Services Tax Identification
Number on the name board exhibited at the entry of his principal place of business
and at every additional place or places of business.
❑ Penalty
Section 125: General Penalty
Any person, who contravenes any of the provisions of this Act or any rules made
thereunder for which no penalty is separately provided for in this Act, shall be liable
to a penalty which may extend to twenty five thousand rupees.
Issue- 10
❑ Documents to be kept? (Not a full list)
▪ Rent Agreement/ Owned – Registration Certificate
▪ Electricity Bill
▪ K YC of Authorised Signatory/ Directors etc.
▪ Access on the Books of Accounts etc.
Issue- 11
❑ Multiple Place of Business at a single place?
Spacelance Office Solutions Private Limited (GST A A R Tamilnadu)

Issue- 12
❑ What if, the document/ information etc. are not provided/ provides
false information?
❑ If the RP does not co-operate with officer?
Sec 122:
Where a taxable person who—
(xii) furnishes any false information with regard to registration particulars, either
at the time of applying for registration, or subsequently;
(xiii) obstructs or prevents any officer in discharge of his duties under this Act;
(xvii) fails to furnish information or documents called for by an officer in
accordance with the provisions of this Act or the rules made thereunder or
furnishes false information or documents during any proceedings under this
Act.
shall be liable to pay a penalty of ten thousand rupees or an amount equivalent
to the tax evaded or the tax not deducted under section 51 or short deducted or
deducted but not paid to the Government or tax not collected under section 52 or
short collected or collected but not paid to the Government or input tax credit
availed of or passed on or distributed irregularly, or the refund claimed
fraudulently, whichever is higher
Issue- 13
❑ Multiple Bank Account
Sum-up
❑ Do’s
❑ Don'ts
Your queries
???
Thank You.

Special Drive Fake Registration GST Vivek

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info@lawbrothers.

Vivek Laddha (LL.B., CA, CMA, CS),

Issues Pertaining to Special

GUIDELINES FOR SPECIAL ALL-INDIA DRIVE AGAINST FAKE

INSTRUCTION NO. 1/2023-GST [F. NO. CBIC- 20/16/05/2023-

❑ Period of this Drive- 16th May 2023 to 15th July 2023.

❑ Backdrop: Fraudulent Credit amount is doubled in the previous

❑ Can they conduct Inspection u/s 67(1) this time?

Physical verification of business premises in certain cases (Rule 25 of

Access to business premises.

❑ Could not they visit earlier?

❑ Can any of CGST officer/ SGST officer conduct the verification?

• Tools and data available

Spacelance Office Solutions Private Limited (GST A A R Tamilnadu)

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