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November 19, 2020

What are consequences if you do not display your GST Number in your office or place of business?

by CA Shivam Jaiswal in GST

What are consequences if you do not display your GST Number in your office or place of business?

Prime Minister Narendra Modi launched GST into operation on the 1st of July, 2017. GST was publicised as ‘one nation, one tax’ by the government, aimed to provide a simplified, single tax regime.  GST is a dual levy where the Central Government levies and collects Central GST (CGST) and the State levies and collects State GST (SGST) on intra-state supply of goods or services. Centre also levies and collects Integrated GST (IGST) on inter-state supply of goods or services. The CGST Rules, 2017 were brought into action to effectively implement the GST law. One such rule pertains to the Display of GST Registration Certificate. Let us learn more about the same in this article.

What are the provisions pertaining to display of Registration Certificate under GST?

According to Rule 18 of the Central Goods and Services Tax (CGST) Rules, 2017:

  • Every registered person shall display his certificate of registration in a prominent location at his principal place of business and at every additional place or places of business.
  • Every registered person shall display his Goods and Services Tax Identification Number (GSTIN) on the name board exhibited at the entry of his principal place of business and at every additional place or places of business.

In addition to the above, it is also mandatory for Composition dealers to display “Composition taxable person” along with the GSTIN Number. As per the GST Law, composition dealer is not eligible to collect tax from their customers. They are entitled to pay a nominal amount of tax on his aggregate turnover. This tax depends on nature of his/her business. The tax percentage ranges from 1% to 5%.

What do you mean by a GST Registration Certificate?

A business whose turnover exceeds the prescribed limit has to register for GST. Also, some special businesses are also required to register for GST. Every registered taxpayer is issued a GST Registration Certificate in Form GST REG-06. Registered taxpayers can also download the certificate from the GST portal. The registration certificate is available for downloading only on the GST Portal. The government does not issue any physical certificate.

What do you mean by GSTIN?

GSTIN, short for Goods and Services Tax Identification Number is a unique 15-digit identification number assigned to every taxpayer (primarily dealer or supplier or any business entity) registered under the GST regime. Every taxpayer under the GST regime is provided with a State + PAN-based 15-digit Goods and Services Taxpayer Identification Number (GSTIN).

Initially, a business is given a provisional ID on logging into the portal and within 3 months the business has to complete the registration process by giving details of business. This provisional ID is then converted to GSTIN. Here is the breakdown of the GSTIN format:

  • The first 2 digits of the 15-digit GSTIN represents the state code.
  • The next 10 digits are the PAN Number of the person or the business entity.
  • The 13th digit is based on the number of registrations done by the firm within a state under the same PAN.
  • The 14th digit will be the alphabet “Z” by default
  • The last digit is called the check code to detect errors and can be denoted by either a number of an alphabet

What do you mean by “Place of Business”?

As per GST authorities in India, Principal Place of Business is the primary location within the State where a taxpayer’s business is performed. The principal place of business is generally the address where the business’s books of accounts and records are kept and is often where the head of the firm or at least top management is located.

Additional Place of business is the place of business where taxpayer carries out business related activities within the State, in addition to the Principal Place of Business.

According to the GST Act, the taxpayers should display the GST registration certificate in a prominent location at the principal place of business and all additional places of business. Hence, in an office or shop, the taxpayer shall also display the GST registration certificate at the entrance or near the billing section.

What are the Consequences for Not Displaying GSTIN on Board?

As per Section 125 of CGST Act, 2017, any person, who contravenes any of the provisions of this Act or any rules made thereunder for which no penalty is separately provided for in this Act, shall be liable to a penalty which may extend to Rs 25,000.

This is a general penalty under CGST Act. Since there is no specific penalty for this contravention this will covered under general penalty.

Hence, if any registered person fails to display GSTIN on board, he will be liable to pay penalty under section 125 of CGST Act of Rs. 25,000

GST Department sometimes conducts raids on Business premises to see if the GSTIN No is visible on Sign board of the Business premises. So, it is advised to get the same affixed on Signboard and on the front door of Office. Notice can be issued if the GSTIN No is not mentioned on Signboard and on Front door of Business premises under Section 125 of CGST Act 2017, with penalty up to 25,000.

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