Haryana excise and taxation department has asked its officers to find out whether premises companies from the state have mentioned in goods and services tax network registration are authentic, a move that seems to be aimed at identifying shell companies operating in Haryana.
Experts, however, warn that this could create problems for several genuine companies, mainly smaller ones, and may even prompt them to deregister from the GST network.
“Success of GST depends on smaller entities as their non-inclusion in the GST value chain will significantly impair the reform,” said MS Mani, partner at Deloitte India.
“Usage of intrusive methods for verification of their registration would, at this initial stage, impact their acceptance of the reform. It is expected that all tax authorities would go all out to encourage smaller businesses to embrace GST without any concerns of a heavy handed approach from authorities.”
“He (tax officer) shall verify documents related to solvency, credentials, genuineness of the person and his business,” reads another. Several experts fear that some other states may just follow Haryana’s example and this could lead to problems for small and medium enterprises that are already reeling under GST compliance pressure.
Related Tags CGST, Haryana GST
