The year 2017 saw the birth of the GST or the Goods and Service Tax. Simply put, GST is a value-added tax which is levied on all those goods and services that is sold to consumers for domestic consumption. It is paid by a consumer during purchase to the businesses selling the goods and services and is remitted to the Government. However, the introduction of GST has quite a few advantages; it has some disadvantages as well. It has become a bit of an issue for taxpayers because of the high tax burden as well as the changed bill pattern. It is still a task for businesses to understand the format of such a bill.
However, there have been a lot of instances where either the businesses have unintentionally hiked up the GST prices or have taken advantage of the situation and charged excess tax. This thus leads to a fake GST bill which is not at par with the Government standards. There are a few ways in which you can determine if the bill given by the shopkeeper is genuine or not and if the GST charged is the right amount. Here are some of those ways:
1) The business must be registered
There are certain criteria for a business to be able to charge GST. The criteria are that the business is an e-commerce operator, the aggregate turnover is in the range of 10 to 20 lakh rupees and the business should have been registered under the VAT and service tax bill. Thus, only those businesses that satisfy the above-mentioned conditions can register under GST and thus get the respective GSTIN which is the GST identification number.
However, the business may voluntarily opt to register for GST even if the aggregate turnover is below what is mentioned. Thus, keep an eye out for the same as sometimes, businesses that are not registered also charge GST from the customers. Hence, if the GST is not mentioned in the bill specifically, there is no need to pay it.
2) GSTIN number must be mentioned
Up until 2017, the bills generated by businesses had only the VAT or Service Tax on it. However, with the introduction of GST, the GSTIN which is the GST Identification Number was introduced. Thus, the bill that you get must hold the GSTIN as opposed to the TIN which is the Tax Identification Number. Thus, if any business is charging SGST or IGST without mentioning the GSTIN number, then the practice is invalid and thus, so is the bill. Hence, check for that number in the bill before you pay the taxes.
3) Structure of the GST
The GSTIN as mentioned is a unique number which is 15 digits in length and is unique for each taxpayer. The structure is as follows:
– The first two characters represent the unique state code.
– The next 10 characters specify the PAN number of the business which is nothing but the PAN number of the shop owner or that of the organization in case of a business.
– The 13th character holds the number of entities in the state of the same PAN holder. Thus, if the PAN holder operates only one such entity in the entire state, that character will be 1.
– ‘Z’ can be the only specification of the 14th character.
– The last or the 15th character is characterized by any random digit which, as specified by the GST officials can be either an alphabet or a number.
4) Verification of the GSTIN
Even if the GSTIN is specified in the bill. it might not always be correct. It may just be a made up number that is used by the business to dishonestly collect taxes. Thus, in order to verify if the GSTIN is authentic, you can log onto the GST portal which is the official government website for GST. Enter the GSTIN number mentioned on the invoice and search for the same. If the GSTIN number is valid, it will redirect the page to the details of the taxpayer which includes the legal name of the business, date of registration and the state and centre jurisdictions. If not, then the GSTIN number is a fake one.
Thus, by using one of the above methods you can determine if the GST bill is authentic or fake.