GST registration procedures to become more strict in India in order to avoid GST fraud and evasion.
The authorities in India are exploring the prospect of increasing the necessary supporting documents and procedures of applying and receiving a GST number as recently there was a barrage of GST fraud cases found, that deeply affect the Indian economy.
As a result, a panel of officials will be attached to the GST council in order to come up and propose all necessary amendments in order prevent frauds involving fake invoices. This Law committee is a panel of central and state officials which examines legal aspects of GST before Council members consider it.
What triggered this new approach?
Already as we mentioned in our previous article, GST fraud is running rampant in India as many fake companies are even being created for the sole purpose of issuing fake invoices and claiming GST refunds.
“In just the last four days, 25 persons have been arrested including two kingpins and two professionals in some 350 cases booked for issuance of fake invoices against 1,180 entities. Actual amount of fake ITC involved is being ascertained,” Officials added.
What is the new GST consideration in India?
“Businesses whose owners or promoters do not have commensurate income tax payment records will require physical and financial verification before their companies can be given GST registration,” a top official from the Directorate General of GST Intelligence (DGGI) mentioned.
The purpose of all this is only for genuine businesses to be able to be registered for a GST number. As always Global VAT Compliance will keep you posted on all the latest developments regarding VAT and GST laws.
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