GST Council proposes new amendments in CGST Rules regarding GST registration to avoid Bogus Registrations

The Union Finance Minister Nirmala Sitaraman presided over the 50th meeting of the GST Council (12th July 2023) at Vigyan Bhawan in New Delhi including Revenue Secretary Sanjay Malhotra, CBIC chairman.

The Central Board of Indirect Taxes and Customs (CBIC) Chairman Vivek Johri has stated that a tight registration process will be implemented to eliminate the possibility to avoid the fake GST registrations. The chairman also stated about the mandatory physical verification.

According to the press release, the Council has recommended the following amendments in CGST Rules, 2017 to strengthen the registration process and to effectively deal with the menace of fake and fraudulent registrations in GST:

1. Amendment in rule 10A to provide that the details of bank account, in name and PAN of the registered person, to be required to be furnished within 30 days of grant of registration or before filing of statement of outwards supply under section 37 of CGST Act in FORM GSTR-1/ IFF, whichever is earlier.
   1. Amendment in rule 21A(2A) to provide for system-based suspension of the registration in respect of such registered persons who do not furnish the details of a valid bank account under rule 10A with the time period prescribed under the said rule.
   1. Insertion of 3^rd proviso in rule 21A(4) to provide for automatic revocation of such system-based suspension upon compliance with provisions of rule 10A.
   1. Amendment in rule 59(6) to provide that where a registered person has not furnished details of a valid bank account under rule 10A, the said registered person may not be allowed to furnish the details of outward supplies in FORM GSTR-1 or using IFF.
   1. Amendment in rule 9 and rule 25 to do away with the requirement that the physical verification of business premises is to be conducted in the presence of the applicant and also to provide for physical verification in high risk cases even where Aadhaar has been authenticated.

It is anticipated that the CGST Act will swiftly incorporate all of the aforementioned amendments. The government is facing a lot of financial loss through the fake GST registrations. Thus, it is mandatory to tighten the GST registration process.

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