Mismatches in tax returns could cost businesses GST registration instantly

NEW DELHI: Businesses could lose their Goods and Services Tax (GST) registration immediately if there are big holes in the sales returns they have filed when compared with the same filed by their suppliers.
The Central Board of Indirect Taxes and Customs (CBIC) has issued standard operating procedures (SOP) for suspension of registration of tax payers on account of discrepancies which indicate breach of GST laws.
The idea of the set of instructions to field officers is to ensure uniformity in the way registrations are suspended and subsequently restored if the tax payer answers the queries of officials satisfactorily. The SOP also instructs officials to collect any tax dues before the registration is restored or to cancel the registration if they find it necessary.
The legal provision for immediate suspension of registration for anomalies in the tax returns was notified in December with the idea of safeguarding the interest of the revenue department. Suspension of registration will be done in cases where the continued operation of the registration poses the threat of revenue leakage.
The government’s drive to improve GST compliance has contributed to an improvement in tax collections in the past two months.
GST collections have crossed the ₹1 trillion mark for four consecutive months and surged to an all-time high of about ₹1.20 trillion in January.
As part of the government’s drive against fake invoice rackets, more than 2,500 cases have been booked against 8,000 entities since mid-November. Eight chartered accountants are among the 258 persons arrested in the drive. The central government has informed accounting rule maker and self-regulator Institute of Chartered Accountants of India (ICAI) to take action against the erring CAs.
Fake invoices are used to evade not only GST and income tax but also to divert funds from companies. These are also used for showing non-existent transactions to jack up figures on books to obtain loans from banks.

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