Genuine Sellers' GST License Suspension Could De-Rail Drive Against Fake GST Registrations

The current two-month all-India drive announced by central and state tax administrations to detect and eliminate fraudulent GSTINs is creating challenges for genuine online sellers, said Forum for Internet Retailers, Sellers and Traders (FIRST) India.

The industry body said that unlike the previous drives, the jurisdictional officers are empowered not only to verify but also to suspend the licenses during the drive.

The government has allowed businesses to register for GST using a virtual place of business (VPOB) address, as long as the virtual office provider is registered with the government and has obtained the necessary approvals, it added.

"However, it has been found that the officers verifying GST are insisting on 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," it stated.

Central and state tax administrations have announced a two-month drive to detect and eliminate fraudulent GSTINs. The drive is creating challenges for genuine online sellers. -> The jurisdictional officers are empowered to verify and suspend licenses during the drive.

-> The government has allowed businesses to register for GST using a virtual place of business (VPOB) address. -> However, officers verifying GST are insisting on physical records along with the presence of employees and/or directors.

-> This could cause immense damage to the genuine small sellers. Here are some additional details about the challenges that genuine online sellers are facing: -> They may not have physical records of their transactions, as they often operate from home or from a co-working space

-> They may not have employees or directors who are available to meet with the officers during the verification process. -> They may not be able to afford the cost of maintaining a physical office.

-> The drive to detect and eliminate fraudulent GSTINs is a necessary step to protect the interests of the government and taxpayers. However, it is important to ensure that genuine sellers are not unduly harmed by the process.