• Notification Date: 01-03-2023
• Notification No: N/A

Fake GST Returns used for applying for Govt Tenders by Several Contractors and Dealers

Several contractors and dealers are applying for the Government tenders with submission of fake and forged GST returns and this has been viewed seriously by the Government, which has issued directions for proper verification of the documents to check their authenticity. 
It has come to the notice of the Finance Department that dealers/contractors whose GSTIN have been cancelled or de-activated are applying for Government tenders with submission of fake/forged GST returns. 
Such practice happens because tender inviting departments do not cross-verify documents submitted by the tenderer with the State Taxes Department although before allotting any work contract, the departments are required to verify the status of GSTIN of the contractor and authenticity of GST-3B returns through the Peridot App or from the State Taxes Department. 
In terms of General Sales Tax Act, 1962, it was mandatory for the contractors to get No Objection Certificate from the State Taxes Department before applying for a tender. This practice, however, was done away with post implementation of GST Act, 2017. 
The practice has been noticed despite the fact that in order to have timely compliance of returns by the contractors as well as Drawing and Disbursing Officers, the State Taxes Department with the help of NIC Jammu has already developed an online web application namely “APNA TDS” which helps in identifying payment made to work contract service providers by the Drawing and Disbursing Officers through JK Paysys Portal. 
Taking serious note of the prevailing situation, the Finance Department has now directed the DDOs that before releasing of payment to the contractor they should verify the latest status of the GSTIN of the contractor by using the information available in Peridot App or through the State Taxes Department to ascertain that contractor has not defaulted in GST compliance. 
“Payment to such contractor who are not fulfilling statutory obligations under GST Taxation Law should be avoided”, the Director General Codes has directed the departments and the DDOs. 
Further, all the Administrative Departments have been advised to direct their subordinate officers that before allotting any contract/releasing payment to the contractor, the status of GSTIN of the contractor and authenticity of GST-3B return submitted by the contractor should be verified through the Peridot App or from the State Taxes Department. 
Meanwhile, it has come to the notice of the Finance Department that departments while examining time barred claims are not adhering to set norms as per General Financial Rules (GFR) and circular instructions issued by the General Administration Department and Finance Department from time to time. 
Accordingly, all the Administrative Departments have been advised to instruct their subordinate officers to desist from submitting such cases which are time barred and follow the instructions in letter and spirit. 
Moreover, the Finance Department has directed all the departments to follow the instructions of the Government of Union Territory of Jammu and Kashmir and Union Ministry of Micro, Small and Medium Enterprises regarding procurement of goods and services produced and provided by Micro and Small Enterprises (MSEs). 
Vide circular dated January 11, 2020, the Finance Department had directed every department and Public Sector Undertaking to procure minimum of 20% of the total overall annual procurement of the Goods or Services from Micro and Small Enterprises. 
The instructions were issued based on similar instructions notified by the Ministry of Micro, Small, & Medium Enterprises for procurement through MSMEs vide SO 581 (E) dated 23-03-2012. Moreover, the Union Ministry vide SO. 567)(E), dated 9.11.2018, made amendments to the Public Procurement Policy for the Micro and Small Enterprises (MSEs) Order, 2012. 
Now, the Finance Department has directed all the Administrative Departments to strictly follow the instructions while making procurement of Goods and Services. “Every Department or Public Sector Undertaking shall procure a minimum of 25% of the total overall annual procurement of Goods or Services from Micro and Small Enterprises”, read the circular. 
Moreover, out of the total annual procurement from Micro and Small Enterprises, 3 per cent from within the 25 per cent target shall be earmarked for procurement from Micro and Small Enterprises owned by women, the Government further said.