GST Evasion: FM Nirmala Sitharaman Chairs Review Meeting On Drive Against Fake Billing

Finance Minister Nirmala Sitharaman on Friday chaired a review meeting of the ongoing drive against fake billing for GST evasion. During the meeting, Sitharaman was briefed about the actions being taken against fake registrations.

“Smt @nsitharaman today chaired a review meeting of the ongoing drive against fake billing for GST evasion. The meeting was attended by Revenue Secretary Shri Sanjay Malhotra & CBIC Chairman Shri Vivek Johri. The FM was briefed about action being taken against fake registrations,” Sitharaman’s office said in a series of tweets.

The finance minister was told that about 11,140 such registrations have already been detected and action has been initiated against them. The FM was apprised of the methods being adopted like identity theft of people.

Sitharaman took note of the existing measures being undertaken by the ministry like OTP-based verification of Aadhar and pilot of biometric-based Aadhar authentication at the time of registration in high-risk cases. “RS (revenue secretary) & CBIC Chairman apprised the FM that AI/ML tools are being extensively used to identify possible fake networks,” according to a tweet.

She instructed that the GST registration process may be further strengthened using technology to curb the entry of such fake entities in the GST ecosystem. The FM called for a nationwide campaign to explain the objectives of the special drive to weed out fake entities.

Meanwhile, the 50th meeting of the GST Council is scheduled on July 11. During the meeting, the Council will also discuss some more measures to tighten the noose on fake registration and fraudulent generation of input tax credit (ITC) as it looks to check tax evasion.

The Council will also discuss the GoM report on online gaming, casinos and horse racing and will circulate it to the states soon. The GoM submitted its report to the Council in December last year, but the Council has not taken it up for discussion.

The GST officers already have initiated a two-month special drive against fake registration.

During the drive, GST Network has identified 60,000 entities which could be having fake registration and for that central and state tax officers have initiated physical verification of the premises. We have completed 43,000 verifications. Of which 10,000 have been found to be bogus involving fake ITC claims of Rs 15,000 crore, Johri added. Sources said the rationalisation of the GST rate is not under consideration by the Council. Currently, cement attracts a GST of 28 per cent.