NEW DELHI : Goods and services tax (GST) authorities canceled 1,63,042 GST registrations in October and November for failing to file monthly tax returns for more than six months, a government official said.
In addition, another 28,635 taxpayers have been identified for the cancellation of the registry for non-compliance in the presentation of monthly returns for more than six months to December 1, the official said.
The strict action not to file returns showing a monthly summary of transactions (return form 3B) is taken as part of a push to improve tax compliance amid a sharp decline in tax revenue. Central GST officials and the GST Directorate General of Intelligence (DGGI) have been on a law enforcement campaign since November focusing on fraud involving false invoices.
As part of this, 132 people, including four certified public accountants (CA), have so far been arrested for improperly dealing with tax credits. Officials have also registered 1,430 cases against more than 4,586 bogus registrants across the country, the official said. One of the arrested competent authorities is linked to the creation of 14 fake companies to negotiate invoices without supplying goods, the official said.
Officials also identified 55 taxpayers who obtained alleged records between Aug. 21 and Nov. 16 without Aadhaar’s authentication, as certain discrepancies were noted in their case, the official said.
False invoices are used for offenses including tax evasion, money laundering and diversion of company funds. They are also used to show non-existent transactions in the company book to increase figures and obtain bank loans.
Direct and indirect authorities have been expanding the use of technology and data analytics in recent months to identify companies with a poor compliance record. With the sharp reduction in tax revenue this year, the trend is expected to gain further momentum.
To verify the practice of establishing shell companies for fraud, the government has already introduced Aadhaar authentication to perform GST registration. Businesses that register with GST without Aadhaar authentication will need to undergo a physical verification of their facilities.