HomeBUSINESSFake GST Bills | How To Spot GST Frauds?

Fake GST Bills | How To Spot GST Frauds?

GST (Goods and Services Tax) is a single form of tax which the government levies on the supply of goods and services in India. It is the biggest indirect tax reform of India which replaced the previous many forms of taxes levied by State and Central governments such as VAT, Service Tax, Central Excise Tax, etc. India began adoption of GST rules from July 1st 2017. It works under the Dual GST model where both State and Central governments levy GST tax as follows-
1. SGST – State GST, collected by the State Govt.
2. CGST – Central GST, collected by the Central Govt.
3. IGST – Integrated GST, collected by the Central Govt.
Currently, though there has been a rise in the misuse of GST which has brought forward the case of fake GST frauds.

Current GST rate on restaurant bills:

GST on food services in India can be 5%, 12% or 18%, depending on many factors, including but not limited to establishment type and location of the provider. GST is applicable to food and non-alcoholic beverages. Meanwhile, VAT is applicable to alcoholic beverages. Current GST rates on restaurant bills stand at 5% which comprises of 2.5% SGST and CGST
each. This rate is subject to change at any time in the future.

How to verify GST numbers?

It is possible for restaurants or any business to make a fake GST number and charge their customers GST by fraud. This fake GST money would end up in their pockets instead of going to the Government. To check this, login to the GST website. Fill out the GST number in the Search engine. Put the captcha and click on Search. You can check the details of the business link to the particular GST number and get assurance whether it is for the same restaurant or not. You can check this easily by logging into the website on your phone at any given time.

fake gst

Which items attract GST and which don’t?

For food and non-alcoholic beverages, a 5% GST is applicable. For alcoholic beverages, no GST is applicable, only VAT is applicable. This VAT charge will have a separate mention on your restaurant billing.

How to spot a fake GST invoice?

Usually, in case of shopping for different products, GST should be charged on each item separately according to each item’s category. This should be clearly mentioned per item on the bill as well. It should not be charged on the total of the bill.

In restaurants, however, since all items are levied at 5% GST, it is fine to charge them on the total of the bill.

Some pointers to check for in a GST bill:

  • Spot the restaurant’s GST number on the bill, also known as the GSTIN.
  • Given GST rate should only be 5%
  • The billing should be in a printed form, as a regulated bill and not in a handwritten invalid bill.
fake gst

What about Service Charge?

Service charge is not mandatory to be paid. It is generally put on the bill as a certain percentage of the tip by the restaurant themselves. You can ask the waiting staff to remove the service charge and present you with a fresh revised bill. If you are already paying the waiting staff a tip in hand, then service charge payment is redundant.

Watch our quick video on this topic below –

Learn more about GST billing.

Read more:
9 things you didn’t know about income tax.
TDS refund filing online procedure.
Income tax return filing for salaried persons

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Heena Siddique
Heena Siddique
Bibliophile. Turophile. Foodie. Tea enthusiast. Shopaholic. Sitcom addict. Movie buff.

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