The GST has brought about a lot of significant changes in the taxation system and has simplified the process of the indirect system. It is good that there is a sharp increase in GST registration
However, the GST fake invoice case is also on the rise. Fake GST bills can lead to tax evasion, loss of tax revenue to the government, and other fraudulent practices. It is crucial to check the authenticity of the GST invoice to avoid getting cheated. How to check if a GST bill is fake or genuine? Here is a detailed easy-to-understand guide to help you.
What is a Fake GST bill?
First, you have to know what is a fake invoice GST. Any bill generated without any transaction is a Fake GST bill. It is created for money laundering, GST evasion, fake purchases, etc. It is illegal and punishable. Hence, you have to follow a few steps to identify a fake invoice.
Know the basics of a GST bill
You should first know about the basic elements of a GST invoice if you want to check its authenticity. It consists of details including the name of the supplier, name of the receiver, GSTIN, invoice number, date of the invoice, HSN code, rate of the applicable tax, quantity, and value. Unless you are familiar with the elements, you will not be able to find the discrepancies.
Verify the GSTIN
The first step is to validate the GSTIN or Goods and Services Tax Identification Number. It is the 15-digit alphanumeric code allotted to all registered taxpayers. It is of great help to identify all genuine GST transactions. How to verify it?
- Visit the official GST portal or GST mobile app.
- Click on ‘Search Taxpayer’.
- Then click on ‘Search by GSTIN’.
- Enter the GSTIN from the invoice.
- Click on the ‘submit’ button after filling out the captcha.
- You can see all details like the name of the business, address, and status of registration.
- Check and confirm if the details on the invoice match the details on the portal.
- Cross-check the details on the invoice
The next step is to check a few important details on the invoice. The details to be checked include
- Invoice number and date
Check if the invoice number follows a logical sequence. If no logical sequence is followed, it could be an indicator that the invoice is fake. Moreover, you should check if the invoice date aligns with the supplier’s date of transaction.
- Details of supplier and receiver
Verify if the details of the supplier and receiver like legal name, address, and GSTIN are accurate. Cross-check the details with the information available on the portal.
Tax and invoice amount
When you visit the GST portal you will be able to see a GST calculator. Use it to calculate the tax amount. Check if the invoice has the same tax amount. Any significant deviations can be a red flag that the GST bill is fake.
- HSN codes
HSN code refers to Harmonized System of Nomenclature that is accepted worldwide. It is a 6-digit code that classifies thousands of products. Check if the HSN code in the invoice is relevant to the product or service. A misrepresentation will show that the invoice is not genuine.
- GST rate finder
Some sellers may charge the wrong rate of GST. In this type of GST fake invoice case, you can verify the GST rate by checking the GST rate chart on the portal.
Scan the QR code
GSTs come with a QR or Quick Response code. It makes it easier to detect fake GST bills as it contains all the important details about the invoice. Moreover, it adds an extra layer of security to the invoice.
- Most of the mobile phones have a built-in QR code scanner and you can use it. If your phone doesn’t have one, you can download and install the app for scanning the QR code.
- Open it and scan the QR code on the invoice.
- You will be able to get details like invoice number, date of transaction, and GSTIN.
- Cross-check these details with the details available on the invoice to check their authenticity.
- Cross-verify in the GST portal
The GST portal is of great help to validate the genuineness of the invoices and to identify and prevent fraud.
- Log into the portal using your GST credentials.
- Go to the ‘Returns’ section and choose the appropriate form.
- Compare the details provided on the portal with that mentioned in the invoice. Look for any mismatch in the tax amount and all other relevant details.
- Check the e-way bill number
If your invoice includes an e-way bill number, you should check the legitimacy of the transportation of goods.
- Visit the e-way bill portal
- Enter the e-way bill number
- and verify it.
- Check the signature
GST bills should be signed by the supplier or the person authorized by him. Make sure the signature of the supplier matches the specimen signature.
- Use third-party tools
Apart from the official government resources, several third-party tools and experts are available to verify if a GST invoice is authentic or not. They use advanced techniques and algorithms to detect altered and fake invoices. Moreover, you can get help from financial experts and tax consultants to guide you to find counterfeit GST invoices.
Verifying the genuineness of GST invoices is vital for consumers and businesses. This helps to avoid legal consequences and financial risks. By following the guidelines mentioned above, you can easily identify fake GST bills.
Do you suspect the invoice to be fake after checking and verifying it? Do you have enough evidence to support your suspicion? If so, it is important to report it to the relevant authorities. You can register your complaint in the GST Helpline or you can notify the tax authorities and provide them all your supporting evidence. This will not only help to prevent fraudulent GST practices but also maintain the integrity of the taxation system.