The law committee of the GST Council has recommended tightening the registration process to eradicate the issuing of fake invoices.
After two days’ long meeting, the Committee suggested introducing an Aadhaar-like registration process for new applicants under the goods and services tax regime.
Under this, a new registration can be done online with live photos and the use of biometrics with verification of documents. Such facilities can be provided at banks, post offices, and GST Seva Kendras (GSKs).
The GSKs can work on the pattern of Passport Seva Kendras to provide new registration facilities with required checks on fake registration.
The process becomes even more difficult for those who opt for non-Aadhaar-based authentication for registration and do not have income-tax returns reflecting adequate financial capability.
Such registrants will have to compulsorily go for physical verification and personal identification. In such a case, the new registrants may have to submit recommendation letters by two taxpayers of adequate reliability.
The recommendation said that the new registrants would be categorized as trustworthy and untrustworthy, depending on the documents they submit. Applicants falling in the trustworthy category can get registered within 7 working days.
Those not in the trustworthy category will be granted conditional registration within 60 working days only after physical verification of the place of business. For those falling in the non-trustworthy category, the input tax credit to their buyers will be allowed only after filing their return and the dealers would be required to pay a certain portion of their liability in cash instead of paying 100 percent tax through ITC.
Therefore, this new recommendation might curb the fake invoice issue but at the same time make the registration process tedious and one of the key changes due to the advent of GST, has been easier registration which encourages more businesses to register with GST authorities.
However, if registration becomes a tough and lengthy process, many small businesses might not like to register themselves.