Under Goods and Services Tax (GST) law, a bill or invoice is issued by the supplier as documentary evidence to prove that supply of goods and/or services has taken place. GST bills or invoice are used by the receiver to settle claims and file for input tax credit (ITC).
A fake GST bill can be raised to falsely claim to comply with GST law. This helps fraudsters to evade taxes and claim input tax credit.
GST invoice can be issued with a forged GSTIN and misleading transaction details.
Without a GST bill or invoice, supply can not be proved and input tax credit can not be claimed.
Therefore, it’s very important to know how to identify a fake GST bill.
In this article, we have discussed how anyone can verify the authenticity of a GST bill or invoice.
What is a fake GST bill or invoice?
A fake GST bill or invoice means the document is issued to you without actual supply of goods and/or services.
Or, details shown on the invoice don’t match with the actual transaction.
This type of situation arises when someone reimburses certain expenses from a company or the receiver collects such invoices to claim input tax credit.
Both are illegal, and should not be allowed.
Steps to verify a GST bill or invoice
A GST bill or invoice should have following details. If someone gives you a GST bill for reimbursement of certain expenses without following details on it, then don’t accept it.
Here are the details that should be present in a GST invoice:
- Name, address and GSTIN of the supplier
- Name, address and GSTIN of the receiver
- Unique invoice number
- Issue date
- GST rates applied
- Description of goods or services
- Taxable value
- Total invoice amount
If the GST bill doesn’t mention your name, address and GSTIN, then don’t accept it, as you will not be eligible for input tax credit.
Having all the above details ensures compliance with GST law and helps in claiming input tax credit.
Verify GSTIN
After receiving the GST bill or invoice, the first step should be to verify the supplier GSTIN.
Goods and Services Tax identification number (GSTIN) is a 15 digit unique number issued to every registered person.
By using the supplier GSTIN, you can verify registered address, trade name, services for which registration is taken, and other details on GST portal to match with the invoice.
If the GSTIN is inactive, the invoice is likely to be fake.
Check supplier credibility
Research the supplier’s reputation and business history before accepting the GST bill or invoice.
By ensuring that the supplier is legitimate, you prevent involvement in fraudulent activities, such as fake GST bills.
Input tax credit can be easily claimed if the purchase is from a registered and compliant supplier.
Therefore, by checking supplier credibility, you basically safeguard yourself against various risks associated with GST compliance.
In case of doubt, reach out to the supplier directly to verify the invoice.
Check the invoice number
A fake GST bill may contain an invoice number that appears legitimate but is actually fraudulent.
Invoice number must be unique and serially numbered. If you find any discrepancies, then check with the supplier.
The date on the GST bill should fall within the tax period.
Check invoice value, rates and tax amount
Make sure that the GST bill mentions correct GST rates, description of goods and services, tax and invoice value.
Ensure that the GST rates applied are accurate according to the product or service supplied.
Check GST filing and payment status
Anyone can check GST filing and tax payment status of a registered person online on the GST portal.
If a supplier is regularly filing GST returns, then authenticity of the supplier can be proved.
Check receipt of GST credit
The best way to check authenticity, is to make payment after receiving credit of GST charged on the invoice to your account.
You can check input tax credit received to your account on the GST portal. Regularly keep monitoring tax credits to check if it’s matching with your records.
By following the above steps, anyone can protect themselves from a fraudulent transaction.
Involvement in fake GST billing, can lead to severe penalties, including fine and imprisonment.
In case of doubt, anyone can complain about a fake GST invoice on the GST portal or by dialing to the help desk number.
