GST Rues

 NEW DELHI: New Goods and Services Tax (GST) registrations may not be instant for those who do not possess an Aadhaar identity number. An empowered panel is considering linking GST registration to biometric details with a live photograph of applicants in an attempt to check GST fraud, two officials said. The law committee of the GST Council has suggested that new or fresh GST applicants follow an Aadhaar-like process under which new registrations can be done online with a live photo, use of biometrics and verification of documents, officials with direct knowledge of the matter said, requesting anonymity. “Such facilities [registration with biometric details] can be provided at banks, post offices, and GST Seva Kendras (GSKs) just like Passport Seva Kendras (PSKs) or Aadhaar Seva Kendras (ASKs). The GSKs can work on the pattern of Passport Seva Kendras to provide new registration facilities with required checks on fake registration,” one of the officials said. This process is under consideration to check GST-related fraud, the second official said. “Annually, 18-19 lakh new GST registrations take place, but at the end of the year only 30% of them are left. About 13-14 lakh GST-registered entities vanish. Most of them are fly-by-night operators, they create

 

bogus firms, claim input tax credit (ITC) without actually supplying goods and services,” he said. The committee held a two-day meeting at a time when the government has launched a nationwide crackdown against GST fraud and has so far arrested 48 people. Alarmed over rampant misuse of the liberal GST registration rules that made fake invoice generation a business for unscrupulous elements, the law committee has felt the urgent need to modify existing GST registration rules. Currently, GST registration is almost instant as there is a provision of deemed registration to avoid any bureaucratic delays, the officials said. “The new system is proposed for honouring the honest, who will not face any difficulty in registration with Aadhaar numbers. It will be difficult only for those who want to con the system,” the second official said

The law committee has proposed two-pronged measures -- tackle the menace of fake invoices and also ensure “ease of doing business” for the honest -- liberal registration, easy refunds and selfcompliance with little checks, he said. The panel has also suggested that these measures be discussed with states and other stakeholders before they are implemented, officials said. “A fresh registrant must go for compulsory physical verification and personal identification in case he or she opts for non-Aadhaar authentication based registration process and does not have incometax return supported adequate financial capability. In such a case, the applicant may have to submit recommendation letter by two taxpayers of adequate reliability,” he added. Archit Gupta, founder and chief executive officer (CEO) of the financial technology platform ClearTax, said: “With e-invoicing, gaps in invoicing and corresponding ITC claims can be further reduced. With the introduction of Aadhaar-like biometric registration, the government is now tightening controls on registrants...However, Aadhaar based e-KYC is already required for GST registration. Therefore introducing live photos and live biometrics may become another hurdle for genuine businesses. Especially during Covid times, it may be impractical to implement.”

Source: Hindustan Times