Kerala becomes the first State to adopt second-level verification for new GST registrations

To keep in check the rising number of benami registrations that make fraudulent input tax credit claims, the State of Kerala has introduced a second level of verification of registration for all registrations granted after June 1, 2020. This verification is expected to be done for both State, and Central assesses. The office of Kerala's Commissioner of State Tax, State Goods and Services Tax Department issued a circular stating that the GST registering authority will be holding the primary responsibility of ensuring accurate paperwork. This will be followed by the second level of verification by the intelligence wing. Once GST registration is granted, all details will be made available on the GST portal, and the Deputy Commissioner (Intelligence) of each jurisdictional district will collect and assign the Enforcement Squad for verification. Additionally, squads have been assigned to conduct detailed enquiries and check the background of proprietor/partners/directors and report if a business is genuine. This second level of verification is expected to curb the issue of fraudulent registrations especially under evasion-prone commodities such as lottery, iron and steel, flooring materials, glass, timber, hill produce, plywood, areca nut, cardamom etc.