How Can You Spot False GST Invoices?

What is the format of a GST invoice?

A GST invoice is a bill that a supplier or seller creates for the products or services they provide to a client. It includes a detailed description of the correct services and/or goods and the payment owed. The following fields need to be included in the invoice:

1. Name, address, and GSTIN of the provider; tax invoice number, no more than 16 characters. Keep in mind that this figure needs to be specific to that fiscal year and generated as a result.
2. Date of Issue
3. Type of invoice
4. Customer’s name
5. GSTIN of the client, provided they are enrolled
6. The billing and shipping address
7. HSN code (an internationally recognized number for the commodities) and description of the service or goods
8. Unit and Quantity
9. Total amount
10. Taxable value following any necessary discount adjustments
11. Along with the rates of CGST, SGST, IGST, UTGST, and Cess, there is also mention of the applicable rate of GST.
    The total tax amount, broken down for IGST, UTGST, CGST, SGST, and Cess.
12. The location of the provider or supply and the destination are necessary for interstate sales.
13. Inverse Charge
14. The supplier’s signature or the signature of an authorized representative

How do you spot a fraudulent GST invoice?

Here are six methods to assist you spot a fraudulent GST invoice:

Registered Taxpayer: In order to charge GST to the buyer, the seller must be registered. According to government laws, individuals who deal with interstate supplies, have an e-commerce firm, have a turnover above INR 20 lakhs, and any other relevant parties must register under the GST. Those who don’t fit into the previously listed groups are free to get it.
GSTIN, or the Goods and Services Tax Identification Number: This special identifying number must appear on the invoice. This facilitates easy ITC claim processing.

GSTIN, or the Goods and Services Tax Identification Number: This special identifying number must appear on the invoice. This facilitates easy ITC claim processing.

Appropriate GSTIN Format: The following format is used to display the 15-digit code that is given to individuals who have registered with GST:

• The distinct state code is represented by the first two characters.
• The next ten characters are the business’s permanent account number (PAN).
• The number of entities with the same PAN number inside the state is represented by the thirteenth character.
• The default letter “Z” is the fourteenth character.
• GST authorities utilize the final or fifteenth character, which can be a letter or number, for internal verification.

Check the GSTIN listed on the invoice:

• To verify the legitimacy of the invoice, go to www.gst.gov.in, the government’s GST portal.
• First, select “Search Taxpayer.” Next, select “Search by GSTIN/UIN.” After inputting the number and the CAPTCHA, select “Search.”
• The following information will be displayed in the search result if the GSTIN is valid:

1. The supplier’s or business’s legal name
2. Date of supplier or business registration
3. Authority of the State and the Center
4. Kind of Vendor/Enterprise
5. The UIN or GSTIN’s status

• If the GSTIN is not genuine, the message that follows will show up. “You have entered an invalid GSTIN or UIN. Kindly input a legitimate GSTIN or UIN.

Accurate GST Rates: The supplier must charge the appropriate GST rate, which includes a breakdown of the CGST and SGST rates. Customers can use the GST Rate Finder application or the government portal (cubic-gst.gov.in/gst-goods-services-rates.html) to check the rate.
Enter the item in the “description” field and press the search button to get rates on goods.
Regarding service fees, type the service into the “Chapter” or “Description” field and press the search button.

HSN/SAC code: The right code for the products or services is mentioned on the invoice. A unique number is assigned to each interest in the Harmonized scheme of Nomenclature (HSN), a universal coding scheme, while a specific service is assigned a Services Accounting Code (SAC).

As a client, you might additionally encounter the following fraudulent activity:

GST on exempted commodities: Approximately a hundred everyday items, including cereals, vegetables, eggs, milk, water, and more, should not be subject to GST. On the other hand, vendors are tacking on extra fees, which some clients are not aware of.
Businesses may continue to charge the prior VAT and CST rates, or they may add GST on top of the applicable VAT tax.
GST Rates: As previously said, suppliers and sellers should charge the precise GST rates shown on the government portal for the goods and services that are being offered. Nevertheless, some companies are charging more than necessary because their clients are unaware of this.

GSTIN confirmation

1. By confirming the GSTIN (Goods and Services Tax Identification Number) on the official GST portal at https://www.gst.gov.in/, individuals can ascertain the legitimacy of a GST invoice.

2. To verify the GSTIN number listed on the invoice, click the ‘Search Taxpayer’ option on the homepage.

3. If the number is real, information about it will be displayed on the website.

GSTIN configuration
Gaining a grasp of the fundamental structure of the 15-digit GSTIN number can also help one spot a fraudulent GST bill. The PAN number of the seller or supplier is represented by the next ten digits of the GSTIN, while the first two digits represent the state code.

False GST invoice

According to the Union Finance Ministry, con artists fabricate a fictitious GST bill in order to deceive customers and business owners, even in the absence of any real supply of products or services or payment of GST. It is essentially created for a variety of illicit purposes, such as money laundering, tax evasion, logging fictitious purchases, and the conversion of income tax credit into cash.

In summary

Because of fraudulent GST bills, the government is always battling tax evasion and money laundering. In fact, standard operating procedures (SOPs) have been implemented to detect questionable businesses in the early phases of the investigation process. As consumers, we may protect ourselves by recognizing these fraudulent GST invoices by comprehending the facts provided above.