GST has been considered as one of the most important tax reforms post-independence. India’s biggest tax reform is now a reality, as it has been rolled out with effective from 1st July, 2017.
Now, its successful implementation at the ground level is what matters the most. Any major reform has its own implementation challenges. Given the complex GST structure in India, it is even more daunting task.
On one side, there are genuine concerns being expressed by the traders regarding the confusion on GST slab rates and technical challenges of filing GST returns on a monthly basis.
For example : The GST slab rate on Chocolates is 18% and Sweets @ 5%. Some of the business individuals are levying GST @ 18% on sweets as well, may be purely out of ignorance.
On the other side, the consumers do not have proper awareness about – what is GST? How to identify a fake GST bill? Whether the traders are giving proper GST complaint bill for the taxes they levy?
It is clearly evident that some of the traders and business people are taking advantage of the lack of awareness about GST among the consumers and levying wrong GST tax rates. Some are even issuing just invoices with GST (but no proper GST complaint bills with GSTIN are provided).
In this post, let’s discuss – What is GSTIN? How to identify a fake GST Bill? How to cross-check the GSTIN number? How and where to check the latest GST slab rates that are now applicable for different Goods and services in India?
What is GSTIN number?
Each taxpayer (business entity) has now been allotted a State-wise and PAN-based 15-digit Goods & Services Taxpayer Identification Number (GSTIN).
GSTIN number is a 15 digit code. The format of GSTIN is as below ;
- The first two digits of GSTIN represent the state code.
- The next ten digits represent PAN number of the business entity.
- The thirteenth digit will be assigned based on the number of registrations done by the business entity within a state.
- The fourteenth digit is Z by default, can be allocated in future, based on number of registrations done by the entity.
- The last digit is for check code.
(Related Article : ‘All you need to know about GSTIN number‘.)
How to know if a Bill is genuine & GST Complaint? (with GSTIN)
I have recently bought some house-hold grocery items at MORE supermarket. Below is the bill/tax invoice that I have got at their billing counter.
If you notice the GSTIN number allotted to MORE Supermarket (Andhra) is 37AAACP2678Q1ZP. You may also observe that the Goods amount and GST tax amount (as SGST/CGST/IGST) are shown separately. (Read : ‘What is SGST, CGST & IGST?‘)
How to verify if this GSTIN is a valid one or not? Let’s find out..
- Kindly visit ‘search page’ of official GST portal.
- Key in the respective business entity’s GSTIN number to know it if is a valid one or not. Enter the ‘captcha’ code and click on ‘Search’ button.
- I have got the below search result for the provided GSTIN number. MORE super market is owned by Aditya Birla Retail Ltd, which is correct, as shown in the below image.
Fake GST Bills with fake GSTIN
So, the above MORE supermarket is a GST complaint bill/tax invoice. Let me now show you a fake GST Bill.
I have recently went to watch a telugu movie (Arjun Reddy) in a near-by multiplex. The below bill does not have the ticket amount and the GSTIN number “999999999999999” provided in the bill is a fake one.
In case, you receive any bills/invoices with TIN, VAT, or Service Tax, you can consider them as fake and invalid bills. Kindly note that GST has now replaced the VAT and Service Tax.
Important points related to GST Bills, Tax Invoices & Slab Rates
- If a trader is levying GST taxes but not providing you a GST compliant bill then you can demand a proper GST Bill with a valid GSTIN imprinted on it. Traders and businesses will have to display the GST registration number on their business sign boards and the registration certificate in premises.
- Kindly note that the bills have to clearly show the amount paid for the Goods & Services and the amount paid as taxes under GST separately (item-wise). Do note that levying one GST slab rate for all the purchased items is illegal. GST bills should have Goods services rate and tax rate & amount separately, both should not be clubbed.
- For example : If you buy a product which is worth Rs 118 (MRP) and let’s assume the applicable GST is @18%. In this case, the business entity has to issue a bill which clearly states that Rs 100 is towards the cost of the product and SGST as Rs 9, CGST as Rs 9 (or) IGST as Rs 18.
- A story doing the rounds on social media claims that getting separate bills for every Rs 1,000 spent will save you money on GST. This is not true. It’s a hoax! Kindly note that the GST slabs are on individual item prices and not on total bill amount. The tax rates for each product/service is based on the definition as per rules defined by the Tax authorities of the Govt of India.
- You might have noticed that some traders are charging MRP + GST rate. MRP is the maximum retail price which is inclusive of all applicable taxes (GST). So, kindly do not pay anything above the MRP rates.
- The traders and dealers who opt for ‘GST Composition Scheme‘ can not issue Tax invoices and can not collect taxes. They can just issue normal Bills. They also have to sell the products at MRP rates only. (The composition dealer is required to mention in the business premises along with registration certificate that h/shee is not entitled to collect tax from taxpayers.)
- We all need to be aware of GST slab rates (at least for important products & services, also for high value items). GST slabs rates are – 0%, 5%, 12% & 18%.
- To know the list of products and services and their applicable GST rates, may be Mobile Apps may come in handy.
- You may download ‘Central Board of Excise & Customs – CBEC’ : GST Rate Finder (Govt’ s official mobile App). You can search for GST slab rates based on respective Goods & Services.
- You may also visit CBEC’s portal to know about the latest GST Rates.
Just because some of the traders are following unethical business practices, we certainly can not blame the entire Trading fraternity. All of us (traders, consumers and the tax officials) are in the early stages of the learning curve (regarding GST). We have to admit that several ‘teething’ problems are inevitable.
But, do note that Ignorance is not bliss! As a consumer, you should be aware and beware of any fraudulent practices adopted by some of the traders. Govt should also take steps to spread awareness about GST (especially about GST slab rates).
Hope these initial implementation challenges are temporary and this major tax reform proves to be beneficial to business people, common man and the nation as a whole!
- GST Helpline Number : 0124-4688999/ 0120-4888999
- GST Complaint email-id : [email protected] gov.in
(Image courtesy of Becris at FreeDigitalPhotos.net) (Post published on : 12-September-2017)