Aadhar-like registration, trustworthy entrepreneurs: New proposals made by law committee of GST Council

The new proposals could result in further tightening of the GST regime which could help in flagging discrepancies as the system for filing GST returns will become more automated with the use of e-invoices and auto-filled tax returns.

After two-day deliberations, the law committee of the GST Council which comprises central and state officials who advise its ministerial members has recommended tightening the registration process to weed out those issuing fake invoices, as per sources.

After two-day deliberations, the law committee of the GST Council has recommended tightening the registration process to weed out those issuing fake invoices, as per sources. (PTI/ file photo)

Here are the proposals that the committee made:

1. The committee has suggested introducing an Aadhaar-like registration process for new applicants under the GST regime which means that a new registration can be done online with live photo and use of biometrics after document verification. This facility can be provided at banks, post offices, and GST seva kendras (GSKs). The GSKs would function similarly as the passport seva kendras and provide new registration facilities with the mandatory checks on fake registration.

2. Entities seeking GST registration would be profiled on the basis of their credentials and classified into trustworthy and others using income tax returns. Trustworthy entrepreneurs are those who have a credible income tax payment history and have their identity authenticated by Aadhaar and have no history of having their GST registration cancelled and these entrepreneurs will get GST registration within a week. The others will be given the registration within two months of physical verification of business premises.

3. Other proposals include cancelling registration of a business which has not filed for GST returns for six months, identifying businesses that pose a risk of revenue loss to the exchequer and restriction on using tax credits from the purchase of raw materials to meet the final tax liability.

GST authorities have been on a nationwide compliance enforcement drive this month, which led to the busting of an invoice racket and the arrest of 48 people and three chartered accountants. As many as 648 cases have been registered so far this month. The new proposals could result in further tightening of the GST regime which could help in flagging discrepancies as the system for filing GST returns will become more automated with the use of e-invoices and auto-filled tax returns.

(With agency inputs)