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GST Council Proposes Stricter Registration Rules to Counter Fake Registrations

In a bid to tackle fake registrations and enhance the integrity of the Goods and Services Tax (GST) system, the GST Council is considering implementing new measures. These measures include reducing the time period for submission of PAN-linked bank account details, introducing mandatory physical verification for “high risk” applicants, and amending GST Rules regarding the presence of applicants during verification.

Key Points:

  1. Reduction in Time Period for Submission of PAN-linked Bank Account Details:

    • The GST Council plans to reduce the time period for submitting PAN-linked bank account details from 45 days to 30 days.
    • This change aims to curb fake registrations and improve the verification process.
  2. Mandatory Physical Verification for “High Risk” Applicants:

    • The Council intends to introduce mandatory physical verification for applicants classified as “high risk” before granting GST registration.
    • This measure seeks to enhance the authenticity of registrations and minimize fraudulent activities.
  3. Absence of Applicants during Physical Verification:

    • The Law Committee, composed of officers from the Centre and states, suggests that applicants should not be present during the physical verification of their business premises.
    • The Committee believes that this eliminates the risk of manipulation by unscrupulous applicants and prevents delays caused by willful absence.
  4. Revised Time Period for Granting Registration:

    • The Law Committee recommends granting registration to “high risk” applicants within 30 days of application, following the physical verification of their place of business.
    • This shorter timeframe ensures a more efficient process while maintaining the necessary scrutiny for potentially risky registrations.
  5. Linking PAN and Aadhaar for Proprietorship Concerns:

    • For proprietorship concerns, the Permanent Account Number (PAN) of the proprietor will be linked to their Aadhaar number.
    • This linkage strengthens the identification process for individual business owners and aids in verifying their authenticity.

GST Council, key points:

  1. GST Council: The GST Council is a constitutional body in India responsible for making decisions and recommendations related to the Goods and Services Tax (GST) system.

  2. Tax Reform: The GST Council was formed with the aim of streamlining indirect taxation in India by introducing a unified tax regime across the country.
  3. Composition: The GST Council consists of the Union Finance Minister as the Chairperson and representatives from all the states and union territories.
  4. Decision-Making: The Council makes decisions on various aspects of the GST, including tax rates, exemptions, thresholds, compliance requirements, and procedural changes.
  5. Meetings: The GST Council meets periodically to discuss and decide on issues related to GST implementation and reforms. These meetings provide a platform for consensus-building among the central and state governments.
  6. Tax Rates: The Council determines tax rates for goods and services under different tax slabs, such as 5%, 12%, 18%, and 28%. It also decides on specific rates for essential goods, luxury items, and items of mass consumption.

  7. Decision-Making Process: The decisions of the GST Council are taken through a voting mechanism, with a three-fourth majority required for approval.

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