Ensuring GSTIN Authenticity: A Guide to Preparing for the Fake GSTIN Drive
In a concerted effort to eliminate fake businesses from the GST landscape and safeguard government revenue, the Central and State Tax authorities in India embarked on a nationwide drive between 16th May and 15th July 2023. The aim was to identify and weed out suspected and counterfeit businesses from the GST economic corridor. To make this drive more effective, GST officers were given permission to conduct location visits, not as raids, but as formal verification checks of GSTIN status and basic information.
Here are five key steps that taxpayers can take to avoid fines and penalties during this drive:
1. Display GST Number and Registration Certificate via Signboard
One of the fundamental steps you can take is to prominently display your GST number and registration certificate at your place of business. This not only reflects the genuine identity of your business but also fosters transparency and confidence within the business community.
2. Sales and Purchase Register Inspection
GST officers may go through your sales and purchase registers to ensure that the data aligns with the GST forms you’ve submitted. This examination provides insights into the overall orderliness of your records. Details such as invoice numbers, customer or supplier information, taxable amounts, and tax rates all contribute to demonstrating compliance.
3. Verification of Filed Returns
To guarantee timely and accurate filing of returns, GST officers may inspect your return submissions. This process also involves reconciling your accounts with the various returns filed. By ensuring consistency between your books and your returns, you optimize tax calculations and the utilization of Input Tax Credit (ITC).
4. Multi-Location Business Verification
If your business operates from multiple locations, ensure that each one is properly registered. Non-compliance in this regard could result in penalties. GST officers will verify whether associate GST registration numbers for branches and other sites are on record and whether they comply with GST regulations.
5. Verification of Credentials
In essence, GST officers will visit taxpayers’ locations to inspect their credentials, focusing on GST Registration Numbers and certificates. They will also cross-check associated addresses and locations. By examining purchases, sales registers, and returns, they aim to establish the authenticity of the figures in account books and returns. In essence, this drive seeks to determine whether an entity is GST compliant or not.
The Power of GST Compliance
Being GST compliant is not just a legal requirement; it sends a powerful message to other businesses and customers. It reflects transparency, good business practices, and instills confidence in those who choose to engage with your enterprise.
The Fake GSTIN Drive is a necessary step to ensure the integrity of the GST system and to promote genuine businesses in India. By taking these steps and maintaining your compliance, you not only avoid fines and penalties but also contribute to building a robust and trustworthy business ecosystem for everyone involved.