To curb fake invoices, the GST Council has come out with a two-pronged strategy. The first suggestion being to adopt an Aadhaar-like registration process for new or fresh registrations, while the other being the application of a ‘business intelligence and fraud analytics (BIFA)’ tool for the identification and weeding out of the fake traders based on criteria such as non-filing of return for six months.

According to the officials, the committee has suggested about fresh registrants going for a compulsory physical verification and personal identification, in case they opt for a non-Aadhaar authentication-based registration process. In-case they do not have an income-tax return supported adequate financial capability, then they must submit a recommendation letter from two taxpayers having adequate reliability. Based on their documents, ‘trustworthy’ applicants will be provided registration within 7 working days. In case the applicants are found not ‘trustworthy’, then a conditional registration will be done within 60 working days after physical verification of the place of business.

To weed out existing fake traders from the system, the committee has proposed about a full application of the BIFA tool for the identification of riskier traders, based on criteria such as non-filing of return for six months. It is proposed that no income tax credential would be given if 99% tax is paid through ITC. About 35,000 such dealers who were given registration in 2018-19 and 2019-20, had GST liability of more than ₹50 lakh - yearly.