The Central Board for Indirect Taxes will soon strengthen its registration verification for new Goods and Services Tax registrants through biometric identity authentication and geo-tagging to verify place of business, according to CBIC Chairman Vivek Johri.
Speaking to media, Johri added that even existing taxpayers who have been identified as 'risky' could be subjected to further biometric verification.
"We have been using OTP-based authentication previously. Now we are going to go for biometric authentication also. The person in suspicious cases may be asked to go to an Aadhaar centre to have his biometric verified so that we are absolutely certain that this is the person whose identity is being produced," Johri told media persons.
The GST authorities are currently running a pilot on biometric verification and geo-tagging physical addresses in 2-3 states to ensure the necessary infrastructure is available.
Geotagging would ensure that the physical address is available to the department for all time to come and the person cannot deny disclosing it later, Johri explained.
Analytics is helping the department track down fake entities and watch the behavious of new entities. "We are looking at whether registration verification needs to be strengthened further," he said.
A second pattern noted by the department is the generation and circulation of fake credit for which the department has already tightened provisions, Johri explained.
Fake input tax credit (ITC) has been identified in cases worth Rs 63,000 crore since August 2020 cumulatively, he said. However the pace of recovery is slow due to the false nature of the action, where the entities are non-existent. "We have recovered over Rs 3,000 crore as part of the larger drive," he added.
The department is also currently running a special 2-month nationwide drive to crack down on fake registrations and fradulent ITC claims.
"60,000 units were identified as suspicious and we have verified 50,000. Of this, we have found that 25% of them are bogus," Johri stated regarding the ongoing drive.
Analysis of fake registration cases shows that instances have been noted in States like Delhi, Haryana, Rajasthan, Gujarat, Uttar Pradesh, Kolkata, Assam, and Maharashtra, with a few cases in Telangana and Tamil Nadu.
The cases have been noted in sectors such as metal scrap, plastic scrap and waste paper, among others. It is also being generated for services like manpower supply services, advertising where we have seen cases of fake billings, Johri added.
While this drive is scheduled till July 15, the department is yet to take a call on whether it can be continued further.
The department is also conceptualising a new drive to include more people into the GST ambit considering that the size of the current tax base, Johri told BQ Prime. Currently 136 lakh taxpayers are within the GST ambit as of June, 2023.
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