June 17, 2023

F. No. CBIC- 20006/15/2023-GST Government of India Ministry of Finance Department of Revenue Central Board Indirect Taxes & Customs, GST Policy Wing New Delhi, dated 14 th June, 2023 To, All the Principal Chief Commissioners / Chief Commissioners / Principal Commissioners /Commissioners of Central Tax All the Principal Directors General/ Directors General of Central Tax Madam/Sir Subject: Guidelines for processing of applications for registration – regarding. Instances have come to notice regarding unscrupulous elements obtaining fake/ bogus registration under GST and defrauding the Government exchequer. Such fake/ non-genuine registrations are being used to fraudulently pass on input tax credit to unscrupulous recipients by issuing invoices without any underlying supply of goods or services or both. This menace of fake registrations and issuance of bogus invoices for passing of fake ITC has become a serious problem, wherein fraudulent people engage in dubious and complex transactions, causing revenue loss to the government. Various modus operandi of obtaining such fake registrations have been detected by Central and State Tax administrations. In some cases, identities of other persons like PAN, Aadhaar, etc. have been misused without their knowledge to obtain GST registration. Forged documents, such as forged electricity bills, property tax receipts, rent agreements, etc. are also being used as proof of principal place of business to obtain GST registration. In some cases, forged identities have been created by using same photo of a person on different Aadhaar cards under different names. In one of the cases detected recently, it has been found that a few fraudsters have obtained fake GST registrations on the basis of PAN and Aadhaar number of persons from economically weaker sections by fraudulently modifying the phone number on the Aadhaar cards of these persons by taking these persons to the Aadhaar Seva Kendra by giving a nominal cash amount under guise of a government scheme and getting their Aadhaar Cards linked to dummy mobile numbers by using their thumb impression.  To address this problem of fake registration and fake input tax credit, Instruction No. 01/2023-GST dated 04.05.2023 has been issued for concerted and coordinated action on a mission mode by Central and State tax authorities in the form of a Special All-India Drive against fake registrations.  In this context, it is further felt that verification of applications for registration by the proper officers is one of the most crucial steps in the direction of preventing the menace of fake or bogus registrations. While numerous initiatives have been/are being undertaken on the policy and systems level, it is pertinent to strengthen the process of scrutiny and verification of such applications for registration at the end of tax officers.  Accordingly, the following guidelines are issued for strengthening the process of verification of applications for registration at the end of tax officers in a uniform manner: 5.1 Immediately on receipt of the application for the registration in the Task List of the concerned officer on ACES-GST application, the officer shall initiate the process of scrutiny and verification of the details filled by the applicant in the application for registration in FORM GST REG-01 and the documents uploaded by the applicant along with the said application. 5.2 FORM GST REG-01 prescribes a list of documents to be uploaded by the applicant in respect of photograph, constitution of business, principal place of business, bank account, etc. The proper officer shall carefully scrutinize the said documents to ensure that the documents are legible, complete and relevant. Further, the details or information furnished by the applicant in the application should also be carefully examined by the proper officer to check completeness of the same, to correlate and cross-verify the same with the uploaded documents and to check the authenticity of the applicant. The details of the address of principal and additional places of business and the corresponding documents uploaded with the application as proof of address may be closely scrutinised to verify completeness and correctness of address of such places of business. Further, to the extent possible, the authenticity of the documents furnished as proof of address may be cross-verified from the publicly available sources, such as websites of the concerned authorities such as land registry, electricity distribution companies, municipalities, and local bodies, etc. 5.3 In order to facilitate targeted approach in verification and processing of registration applications, the Directorate General of Analytics and Risk Management (DGARM), in coordination with GSTN, is conducting risk rating of the applications for registration in form of High, Medium and Low risk rating for each application for registration (ARN), based on data analytics and risk parameters, and making the same available to the CGST field formations in the form of Report Series 400 on DDM portal on regular basis. Accordingly, the proper officer shall check the said risk rating made available by the DGARM in respect of the concerned ARN and take the same into consideration while verifying and processing the said application. Special attention needs to be paid to the cases where “High” risk rating has been assigned to an ARN. 5.4 The proper officer may also check as to whether the registration(s) has been obtained on the same PAN earlier, either within the same State or other State(s). In such cases, the status of the said PAN as well as the compliance record of the said GSTINs may also be checked from the portal. The proper officer may also give due consideration and special attention to the cases involving inter alia the following circumstances: (i) where any registration obtained on the PAN of the applicant has been cancelled previously; (ii) where any registration obtained on the PAN of the applicant is suspended at the time of verification of a new application of registration; (iii) whether any application for registration on the PAN of the applicant has been rejected previously; (iv) whether the place of business of the applicant appears to be risky based on local risk parameters; (v) whether the proof of address of place(s) of business prima facie appear to be suspicious/ doubtful on the basis

Problem: Fake registrations and bogus invoices are causing revenue loss to the government. Fraudsters obtain fake GST registrations and issue invoices without any actual supply of goods or services, passing on fake input tax credit to recipients. Modus operandi: Fraudsters misuse the identities of others to obtain GST registration. They use forged documents like electricity bills, property tax receipts, and rent agreements. Some create multiple Aadhaar cards with the same photo but different names. They even manipulate Aadhaar cards of economically weaker individuals by changing their phone numbers. Solution: Instruction No. 01/2023-GST has been issued for a special all-India drive against fake registrations, with coordinated action by Central and State tax authorities. Importance of verification: Verifying registration applications is crucial in preventing fake or bogus registrations. Strengthening the scrutiny and verification process by tax officers is necessary. Guidelines for verification: a. Officers must immediately scrutinize the application and uploaded documents. b. Documents should be legible, complete, and relevant. Officer must check the authenticity of the applicant and cross-verify details. c. Risk ratings provided by DGARM should be considered. High-risk cases need special attention. d. Check if the PAN is linked to previous registrations, cancellations, suspensions, or rejections. Risky business addresses and suspicious proof of address require careful examination. e. Issue notice in FORM GST REG-03 if the application is deficient, seeking clarifications or additional documents. f. Examine the response in FORM GST REG-04. Approve or reject the application based on satisfaction. Reject applications with no response within the time limit. Timely actions: Applications must be processed within the prescribed time limit. Negligence by officers should be strictly addressed. Deemed approval cases: In cases of deemed approval or high-risk ratings, physical verification of the business must be conducted by the Commissionerate within 15 days of registration. Supervision: Principal Chief Commissioners/Chief Commissioners should closely supervise the application processing and physical verifications within their zones. Difficulties: Any implementation difficulties should be reported to the Board for resolution. Practice area’s of B K Goyal & Co LLP Income Tax Return Filing | Income Tax Appeal | Income Tax Notice | GST Registration | GST Return Filing | FSSAI Registration | Company Registration | Company Audit | Company Annual Compliance | Income Tax Audit | Nidhi Company Registration| LLP Registration | Accounting in India | NGO Registration | NGO Audit | ESG | BRSR | Private Security Agency | Udyam Registration | Trademark Registration | Copyright Registration | Patent Registration | Import Export Code | Forensic Accounting and Fraud Detection | Section 8 Company | Foreign Company | 80G and 12A Certificate | FCRA Registration |DGGI Cases | Scrutiny Cases | Income Escapement Cases | Search & Seizure | CIT Appeal | ITAT Appeal | Auditors | Internal Audit | Financial Audit | Process Audit | IEC Code | CA Certification | Income Tax Penalty Notice u/s 271(1)(c) | Income Tax Notice u/s 142(1) | Income Tax Notice u/s 144 |Income Tax Notice u/s 148 | Income Tax Demand Notice  Company Registration Services in major cities of India Company Registration in Jaipur | Company Registration in Delhi | Company Registration in Pune | Company Registration in Hyderabad | Company Registration in Bangalore | Company Registration in Chennai | Company Registration in Kolkata | Company Registration in Mumbai | Company Registration in India Our Offices CA in Delhi | CA in Jaipur | CA in Gurgaon | CA Firm in India