The government has deregistered the goods and services tax (GST) of more than 163,000 business entities due to non-filing of tax returns for more than six months to curb the threat of fugitive operators creating fake companies and profiting fraudulently the income tax credit (ITC) worth billions of rupees, said two officials.
To handle the threat of bogus companies and circular business entities, GST officials canceled 1,63,042 registrations in October and November of this year due to failure to file GSTR-3B returns for more than six months. Finance Ministry officials said. , requesting anonymity.
“All these business entities, who had not filed their GSTR-3B returns for more than six months, were first issued the cancellation notices and then their registrations were canceled according to standard operating procedure,” said one of the officials. GSTR-3B is a summary of business transactions that a registrant presents each month.
In the Ahmedabad area alone, 11,048 GST registrations were canceled. In the Chennai area, there have been 19,586 suo motu cancellations so far regarding GST taxpayers who have not filed returns for more than six months, he said.
“In addition, 28,635 registered entities have been identified that have not submitted their GSTR-3B returns for more than six months as of December 1, 2020 and the tax authority has initiated its own cancellation process in these cases,” he added.
The tax authority launched a massive crackdown last month against bogus entities that allow themselves to issue bogus invoices to fraudulently usurp the ITC. Within a month, the GST Directorate General of Intelligence (DGGI) and Central GST Commissioners have so far arrested 132 individuals, including four chartered accountants and one woman, for fraudulently using or transmitting an ineligible ITC and have 1,430 registered cases against more than 4,586 false entities. said a second official.
“The tax authority is also scanning newly registered entities that have not provided correct details at the time of registration. Of the 720 estimated records granted between August 21 and November 16 of this year, where Aadhaar’s authentication was not performed, 55 records estimated due to discrepancy were identified and the cancellation process began in these cases, “said the first official.
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