Goods and services tax (GST) registration is suspended only in cases of serious violation such as someone taking wrong input tax credits (ITC), a Central Board of Indirect Taxes and Customs (CBIC) official on Wednesday, terming fake ITCs “a huge challenge for the government”.
“If someone is taking the wrong ITC, there is no other option but to suspend the (GST) registration with immediate effect. Otherwise, they will continue their activities, and in the process will generate more fake ITCs and will pollute the entire ecosystem,” said Sanjay Kumar Agarwal, member (compliance management), CBIC, at an event organised by the PHDCCI.
Agarwal highlighted that the government had provided a very simplified structure for GST, and in most cases, registration was passed without physical verification which has led to entities generating fake ITCs. The government has implemented validation measures and adopted mandatory physical verification on a risk-based approach.