The Uttar Pradesh State Tax Department, on May 26, 2026, issued a circular to strengthen the GST registration process and prevent the creation of Non-Genuine Taxpayers (NGTPs) who obtain registrations using forged documents, fake addresses, or stolen identities for fraudulent Input Tax Credit (ITC) claims.
The following has been stated:
It highlights key weaknesses such as delayed physical verification, inadequate monitoring of new registrations, underutilization of GSTN risk-analysis tools, lack of cyber-fraud detection training, and insufficient follow-up action against suspicious taxpayers.
To address these issues, the department has directed officers to conduct stricter scrutiny of GST registration applications, including verification of uploaded documents, cross-checking applicant details with available databases, examination of GSTN risk scores, and heightened vigilance in cases involving mismatched mobile numbers, common contact details across multiple firms, previously cancelled PAN-linked entities, and PDS/DBT beneficiaries. All newly granted GST registrations must undergo mandatory physical verification through the UPGST Field Visit App or GSTN Tax Officer App, with geo-tagged photographs and verification reports uploaded online. Adverse verification findings must immediately trigger suspension or cancellation proceedings, including retrospective cancellation from the registration date, where the entity is found to be non-genuine.
Further, it also mandates close monitoring of newly registered firms during their initial months of operation. Officers must scrutinize GST returns, e-way bill data, ITC claims, bank account validation status, and transaction patterns to identify potential fraud indicators. High- and medium-risk taxpayers identified through GSTN risk-scoring tools must undergo a second physical verification within six months of registration. Additionally, all identified NGTPs must be cancelled retrospectively, subjected to chain analysis to identify beneficiaries of fraudulent ITC, and recorded on the NGTP portal.
Further, the department has prescribed mandatory training for officers on cybersecurity, cyber audits, digital forensics, GSTN AI tools, and NGTP identification techniques. Disciplinary action has been prescribed for officers who fail to conduct timely verifications or whose negligence results in revenue loss. Monthly compliance reports on new registrations, physical verifications, risk-based monitoring, and action taken against suspicious registrations will be submitted through the departmental hierarchy for continuous review by the GST Audit Section. The circular takes immediate effect from the date of issuance.
Please refer to the document for more detailed information.
[Circular No. 115/2026-SGST]
