The current two-month all-India drive announced by Central and State Tax administrations to detect and eliminate fraudulent GSTINs is creating challenges to genuine online sellers. Unlike the previous drives, the jurisdictional officers are empowered not only to verify but also suspend the licenses during the drive. The government has allowed businesses to register for GST using a VPOB (virtual place of business) address, as long as the virtual office provider is registered with the government and has obtained necessary approvals. However, it has been found that the officers verifying GST are insisting for physical records along with the presence of employees and/or directors. As most of the online sellers register their places of business as their chartered accountant’s premises or in a co-working place affording them cost benefits and better compliance, the current drive could cause immense damage to the genuine small sellers.
Five key recommendations by Forum for Internet Retailers, Sellers, and Traders (FIRST) India to mitigate these challenges:
- Implement a robust process that allows genuine entities to present their case and provide necessary documentation, reducing compliance burden.
- Provide comprehensive knowledge to tax officers at the ground level about existing provisions and judicial precedents to help curb fake registrations and safeguard the interests of genuine sellers.
- Ensure fair and transparent investigations for taxpayers and MSMEs flagged during the drive.
- Expedite the resolution of cases related to genuine sellers by establishing a timely redressal mechanism as delay in resolving these cases can have severe financial implications.
- Fast-track remediation to help prevent disruption in operations and growth.
Read more at: CXOtoday.com
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