Hyderabad: With the number of fake GST credit claims rising, the commercial tax department has taken several initiatives to nip the fraud in the bud by sending welcome letters to business premises and opening 14 GST Suvidha Kendra among others.
On average, the department gets 15 to 20 requests for new registrations. As the premise of the business entity is physically verified only if a complaint was raised, the department has decided to send welcome letters to the address of the registered entity. If the letter was unserved, the Assistant Commercial Tax Officer (ACTO), who is the registered authority, will issue a show-cause notice for the cancellation of registration.
Subsequently, the commercial tax department official will visit the premises of the business entity and if the business doesn’t exist at the registered address, its GST registration will be cancelled.
The initiative was taken by the department after teams were reportedly sent by Commissioner S.A.M. Rizvi to different states for studying good practices which have yielded results.
Earlier, the department used to send the registration certificate to a newly registered dealer through a registered post with acknowledgement due (RPAD). However, this practice was discontinued after the introduction of the TGST Act, 2017 and communication was sent only through email. This change made verification of business place possible only during the complaint.
The practice of sending welcome letters was initially adopted by Tamil Nadu, hoping to prevent frauds at the preliminary stage itself.
Recently, the department has conducted an anti-fake registration drive, which led to identification of 3,000 doubtful tax payers and 800 non-existing businesses. The officials blocked Rs 300 crores in such claims from August and issued show-cause notices to them.
