CBIC plans tighter GST regulation norms using geo-tagging, biometrics

CBIC plans tighter GST regulation norms using geo-tagging, biometrics

Subject :Economy

Section: Fiscal  policy

Context: With 12,500 fake entities detected, Goods and Services Tax (GST) authorities are looking to tighten registration norms with biometric authentication and geo-tagging of risky entities.

Key Points:

• Central Board of Indirect Taxes and Customs (CBIC) will make the return filing system stringent to prevent fraudsters from using Permanent Account Number (PAN) and Aadhaar identification to obtain fake/fraudulent GST registration.
• For this GST authorities plan to introduce:
  • Biometric authentication : CBIC will require risky entities to get their biometrics authenticated at Aadhaar centre. Presently only OTP authentication is used.
  • Geo-tagging (linking with the geographical coordinates of a location) of place of business will be implemented for both existing and new registrants if they match as risky entities availing input tax credit fraudulently. This will ensure that the address given in GST registration is the place from where the entity operates.
• Concerns have been raised by some service sector companies, especially co-working spaces, as they do not typically fit in the brick-and-mortar rules for GST registration.
• A pilot on biometric authentication and geo-tagging is already underway in two-three states and depending on the results and evaluation of digital infrastructure requirements, the project would be launched across India.
• Tax authorities have identified certain locations where fake entities are rampant, such as Delhi, Haryana, Rajasthan. Certain parts of Gujarat, Noida, Kolkata and Assam and some parts in Telangana, Tamil Nadu and Maharashtra too have registered cases of fake entities with GST registration.
• Sectors for which cases of fake entities are getting detected mainly include, metal or plastic scrap, and waste paper. There are fake entities operating in the services sector also, such as manpower services, advertising services.