The state goods and services tax department has registered an average 43% drop in GSTIN applications received monthly since November 2023 when a new layer of authentication was added for the online registration process.
From November last year till February this year, the average applications received in a month for GSTIN (Goods and Services Tax Identification Number) have fallen from 26,800 to 15,350.
The decline is not a result of slowdown or fewer number of companies opening, but the result of a measure by state govt to curb bogus billing at source.
The pilot project makes biometric verification mandatory for GSTIN applicants, a filter that keeps bogus applications out.
State officials say this mechanism has led to a marked decline in the number of applications.
Launched in November 2023, this project is designed to make the registration process more secure and efficient. A similar pilot project is being implemented in Andhra Pradesh and Puducherry.
“The typical modus operandi in a fake billing scam begins with obtaining a fake GST registration by duping unsuspecting people. GSTINs of such bogus firms which exist only on paper are further used to create fake bills and obtain input tax credit without any actual movement of goods,” said a senior SGST official.
“Individuals reported unauthorized use of their bank and identity documents for such registrations,” he added.
Gujarat has been grappling with the growing challenge of bogus billing. Ever since GST’s implementation, Gujarat govt has lost Rs 11,443 crore to bogus billing frauds for tax evasion.
The total turnover of bogus billing is nearly Rs 1 lakh crore ever since the new regime was rolled out.
“Under the new system, applicants must provide a thumb impression and various identification documents during the registration process. This step is intended to verify the authenticity of the applicant. Additionally, GST applicants may be summoned for further verification if needed in the future,” said a GST official.
The implementation of biometric verification is expected to help curb these fraudulent activities by ensuring that GST registrations are granted only to legitimate applicants.
