The Goods and Services Tax (GST) Department recently launched a drive against fake Goods and Services Tax (GST) registrations that could hit the Micro and small businesses that sell goods through e-commerce platforms. These units fear unfair suspension or cancellation of Goods and Service Tax (GST) registration by Physical Visits of GST officials since most of them run operations through co-working spaces or shared warehousesâpractices that may pose a hurdle during verification.
While GST officials are visiting premises physically to verify addresses and to detect fraudulent activities, the industry body for small businesses feels that the licence may return.
The special drive, which was launched by central and state GST departments, started on May 16 and is expected to continue till July 15. This drive is aimed to detect fake GST registrations, fake billers and so on. In the first week of the joint drive, tax officials have identified around 10,000 illegitimate GST registrations, according to sources.
The main concern of the Small and micro businesses was over issues like the use of co-working space or shared warehousing. The Association of these businesses are trying to consult with state and central GST officials to bring forth the concern of small and micro businesses due to such drive.
Many Merchants and Manufacturers Association had made their objections and concerns about the GST drive.
Shailesh Patwari, President of the Gujarat Chamber of Commerce and Industry, said, âThere are some existing hiccups that have to be resolved. Instead of working towards resolving those issues, the visits will just complicate things further. Even if there is one fake seller in a genuine supply chain, GST officials penalise all the sellers.â
With the GST Drive officers are empowered to not just make visits to verify GST-related details, but also cancel licences. These physical visits have been on for some time and led to many small and micro businesses losing their licences even though they have followed the regulations.
It was also evident that once registration gets cancelled, the process to get it back or get a new number is not a simple task. The industry body felt that the drive will push more and more small businesses to remain small or some businesses may even opt for multiple companies to avoid falling under the GST ambit.
Lower compliance costs and less paper or administrative work will encourage more businesses to register. Most small businesses have to offer the same details to GST, I-T and other entities.
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