Lok Sabha Question No. 621 (UNSTARRED), answered on 2023-07-24
Subject: Fake Companies Registered under GST
Ministry: FINANCE
Asked by: Keshari Devi Patel

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE LOK SABHA

## UNSTARRED QUESTION NO. 621

To be answered on Monday, July 24, 2023/Sravana 2, 1945 (Saka)

## 'FAKE COMPANIES REGISTERED UNDER GST'

## 621. SHRIMATI KESHARI DEVI PATEL:

## Will the Minister of FINANCE be pleased to state:

- (a)  the  total  number  of  fake  companies  registered  under  Goods  and  Services  Tax (GST) and the names of States where these companies are located; and
- (b)  the  steps  taken/being  taken  by  the  Government  to  check  the  said  registered companies and the total amount collected from such companies?

## ANSWER MINISTER OF STATE IN MINISTRY OF FINANCE (SHRI PANKAJ CHAUDHARY)

- (a): 1850 fake companies registered under GST have been identified by Central Tax Administration from 01.07.2017 to 30.06.2023. These fake companies are located in States/UTs  of  Andhra  Pradesh,  Assam,  Bihar,  Chandigarh,  Chattisgarh,  Delhi, Gujarat,  Haryana,  Jharkhand,  Karnataka,  Kerala,  Madhya  Pradesh,  Maharashtra, Meghalaya,  Odisha,  Punjab,  Rajasthan,  Sikkim,  Tamil  Nadu,  Telangana,  Tripura, Uttar Pradesh, Uttarakhand and West Bengal.
- (b)  The  steps  taken/being  taken  by  the  Government  to  check  the  fake  companies registered under GST are as under:
1. Using  robust  data  analytics  and  artificial  intelligence  to  identify  and  track risky taxpayers and detect tax evasion;
2. Carrying out special all India drive to weed out fake/bogus registrations from 16.05.2023 to 15.07.2023;
3. Insertion of sub-rule (4A) in rule 8 of CGST Rules, 2017 to provide for risk based biometric-based Aadhaar authentication of registration applicants;
4. Amendment  in  rule  9 of CGST  Rules,  2017  to  provide for physical verification in high risk cases, even when Aadhaar has been authenticated;

5. Amendment in rule 10 A of CGST Rules, 2017 to provide for requirement of bank account furnished as a part of registration process to be in the name of the registered person and obtained on PAN of the registered person and also linked with Aadhaar in case of proprietorship firm. Also, the GST  Council  in  its 50 th meeting  has recommended  further  amendment  in  rule  10A  to  provide  that  the  details  of  bank account  will  be  required  to  be  furnished  within  30  days  of  grant  of  registration  or before filing of GSTR-1, whichever is earlier;

6. Restriction on availment of ITC to invoices and debit notes furnished by the supplier in their statement of outward supplies;
7. Sharing  of  data  with  partner  law  enforcement  agencies  for  more  targeted interventions;
8. Reduction in threshold limit for issue of e-invoice for B2B transactions from Rs. 10 crore to Rs. 5 crore, w.e.f. 01.08.2023;
9. Restriction on generation of e-way bills by non- compliant taxpayers;
10. Making the beneficial owner liable for penal action and prosecution similar to that of actual supplier/recipient, in cases where a supply has been made without the issuance of an invoice, or invoice has been issued without supply, or excess ITC has been availed/distributed; and
11. Amendment  in Section  83  of  the  CGST  Act  to  provide  that  provisional attachment of property can be done in respect of any other person who has retained benefits of such transactions.

Further, an amount of Rs. 543 crore has been realized in such cases from 01.07.2017 to 30.06.2023.

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