A business that is not registered under GST cannot charge GST.
Every industry in our nation today scrambles to make adaptations to the billing format dictated by the GSTN. This phase of adaptation demands that along with the businesses, even the customers understand the changes that will reflect in the bills they receive. The first piece of information that customers need to keep in mind while they get used to this new regime is that the GST act mandates that only those who are registered with the GST Network and have an assigned GSTIN are eligible to charge the GST rates.
While the customers are catching up to the changes, there are a few restaurants that are taking advantage of lack of knowledge to charge GST rates even though are not registered. Take into consideration a situation that was recently brought to light, where a customer found that a restaurant that wasn’t registered was charging 18% GST. When questioned, they agreed to repay the tax amount but they had been charging all their customers the tax for 10 whole days which is nothing short of a fraud.
As tax paying individuals of the nation, how can you make sure that you are not taken advantage of? Know how to identify a fake GST and then verify its authenticity.
Here is how you can verify a GSTIN’s authenticity-
Step 1: Identify if the GSTIN is valid
The GSTIN is not just a random sequence. It is a series of numeric and alphabets ascribed by the GSTN to enable tracking. Understanding this sequence will help you understand if this a GSTIN that has been allocated by the GSTN.
Structure of the 15 digit GSTIN
First two numbers are the state code and it indicates the state of business and registration
The next 10 digits are the PAN number which has been used to register with the GSTN
The 13th digit indicates the number of registrations that the business has within that state
The 14th digit by default is Z
The 15th digit is a check code used to identify any errors
The state codes assigned by the GSTN are as follows-
01-Jammu and Kashmir
02-Himachal Pradesh
03-Punjab
04-Chandigarh
05-Uttarakhand
06-Haryana
07-Delhi
08-Rajasthan
09-UP
10-Bihar
11-Sikkim
12-Arunachal Pradesh
13-Nagaland
14-Manipur
15-Mizoram
16-Tripura
17-Meghalaya
18-Assam
19-West Bengal
20-Jharkhand
21-Orissa
22-Chattisgarh
23-Madhya Pradesh
24-Gujarat
25-Daman and Diu
26-Dadar and Nagar Haveli
27-Maharashtra
28-Andhra Pradesh
29-Karnataka
30-Goa
31-Lakshadweep
32-Kerala
33-Tamil Nadu
34-Puducherry
35-Andaman and Nicobar Islands
Step 2: Check if the GSTIN is authentic
The next step to checking if a GSTIN printed is authentic, is to verify that the GSTIN printed on the bill is associated with the business in question. This can be simply done by visiting- https://services.gst.gov.in/services/searchtp
Open the link and enter the GSTIN in the search box given. The search result will show you the details of the business that the GSTIN belongs to.
Step 3: Check if you are being charged the right tax percentage on the bill
The rates to be charged according to the GST act are given below.
– For non-AC/non-alcohol serving hotels, it is 12%
– For AC/alcohol-serving hotels, it is 18%
– For 5-star hotels, it is 28%
Please keep in mind that alcohol is exempt from GST. You will be charged VAT on your alcohol and GST on food. And the bill will be segregated in the same manner. Check that the rates charged are right.
Be a smart customer and know your rights!