GST Council Takes Steps To Curb Fake Registrations, Fraudulent ITC Claims

The 50th GST Council meeting has decided on a number of measures to curb fake registrations and fraudulent Input Tax Credit claims. These measures include mandating valid bank account details for all registrants and requiring physical verification of registrants, even if their Aadhaar details are available. 

This verification can also be done without the registrant's physical presence. The meeting also saw discussions on biometric identity verification.

GST authorities had been working on a nationwide programme to put a stop on fraudulent ITC claims. They had also been working towards biometric verification and geotagging in a few states.

An analysis of fake registration cases has shown that instances have been noted in states such as Delhi, Haryana, Rajasthan, Gujarat, Uttar Pradesh, Kolkata, Assam, Maharashtra, Telangana, and Tamil Nadu in the sectors of metal scrap, plastic scrap, and waste paper.

They have also been seen in services such as manpower supply and advertising.

CBIC Chairman Vivek Johri had previously told BQ Prime that, "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."

Since August 2020, fake ITC claims worth Rs 63,000 crore have been identified but the pace of recovery is slow due to the entities being non-existent, Johri had said.