How to Spot a Fake GST Bill

There have been a lot of instances where fake GST bills have been issued by non law abiding businesses. We all are aware of the fact that only persons registered under GST have a right to collect GST but still there are a lot of malpractices in the system, let’s now discuss how to spot whether a person is qualified to charge GST and if he is supplying a valid bill.

1. In Order To Charge Gst On The Invoice Amount, Businesses Must Be Registered Under Gst

If a business isn’t registered under GST, it cannot charge GST to its customers. The following businesses are required to register under GST:

a)  Businesses who were previously registered under VAT/service tax
b)  Businesses whose aggregate turnover is more than 20 lakh rupees (10 lakh rupees for special category states)
c)  Businesses who engage in interstate supply of goods or services
d)  Ecommerce operators

Any business not covered by the conditions listed above may register for GST voluntarily.

In any case, if the business isn’t registered under GST, it can’t charge GST from the customers.

2. Invoices Must Include a GST Identification Number (GSTIN):

GSTIN number should be mentioned in invoice if the business charges GST from the customers. Businesses can’t mention Tax Identification Number (TIN) or Service Tax Registration Number on their invoices since VAT and service tax has been subsumed under GST. If any business charges CGST and SGST or IGST in the invoices that contains TIN number or service tax registration number, it is invalid practice

3. GSTINS Must Be Structured Correctly:

A GSTIN is a 15-digit registration number unique to every taxpayer. The first two characters represent an assigned and unique state code.

The next 10 digits are the permanent account number (PAN) of the business. In the case of a proprietorship, this is the number of the shop owner; in other cases, it is the PAN of the organization. The 13th character will be the number of entities the PAN holder has in a particular state. If the PAN holder operates only one entity in a particular state, the 13th character will be 1.

The 14th character has no use and it will be by default Z
The 15th character will be a random digit. It may be a letter or a number for internal checks by GST officials.

4. GSTINS Must Be Valid:

Visit the GST portal to check whether a GSTIN on an invoice is valid or not. To do this, follow these steps:

Visit the “search page” on the GST PORTAL
•   Enter the GSTIN from the invoice at the requisite place
•   Enter the “captcha code”
•   Click the “search” button

If a GSTIN is incorrect, then you will get the following message on your screen that
“Please enter a valid GSTIN/UIN”

If a GSTIN is valid, the screen will show the following details:

•   The legal name of the business
•   Centre jurisdiction
•   State jurisdiction
•   Date of registration
•   Constitution of business
•   Taxpayer type
•   GSTIN/UIN status
•   Date of cancellation

5. Businesses Should Charge The Correct Amount Of GST:

It may happen that the shopkeeper has charged GST at incorrect rates. Either the shopkeeper may not have categorized the product correctly, or he or she may have made a mistake in the division of the total GST into CGST and SGST.In such cases, visit the official GST website to check the rates on goods and services. You may also check which goods and services are exempt from GST. The mobile app GST Rate Finder, an official application issued by the GST council, also lists GST rates.

6. Composition Dealers Can’t Charge GST:

 Taxpayers registered as composition suppliers need to issue a  a “bill of supply.” They also must specifically mention, on the invoice, that they are composition dealers and that they are not charging GST to customers.

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