Consequences if GSTIN is not Displayed in Office/Place of Business

Last Updated On: Nov. 19, 2020, 7:33 p.m.
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CONSEQUENCES YOU NEED TO FACE IF YOU DO NOT DISPLAY GSTIN IN YOUR PLACE OF BUSINESS

GST was implemented from 1st July 2017. GST is considered to be One Nation One Tax by the Government. The Government's main aim is to provide a simplified and single Tax regime.

GST is a dual levy where the Central Government levies tax and collects CGST and the State Government levies tax and collects SGST on intra-state supply of goods or services. Central Government also levies tax and collects Integrated GST (IGST) on inter-state supply of goods and services.

The CGST Rules,2017 were brought into action to effectively implement the GST Law. One such law relates to the Display of GST Registration certificate.

This Blog highlights the necessity of a Registration Certificate under GST.

 

Provisions related to Registration of Certificate under GST:

  • As per Rule 18 of the Central Goods and Services Tax (CGST) Rules, 2017:
  • Every registered person shall display his certificate of registration in a prominent location at his principal place of business and at every additional place or places of business.
  • Every registered person shall display his Goods and Services Tax Identification Number (GSTIN) on the name board exhibited at the entry of his principal place of business and at every additional place or places of business.
  • In addition to the above, it is also mandatory for Composition dealers to display “Composition taxable person” along with the GSTIN Number. As per the GST Law, composition dealer is not eligible to collect tax from their customers. They are entitled to pay a nominal amount of tax on his aggregate turnover. This tax depends on the nature of his/her business. The tax percentage ranges from 1% to 5%.

 

What is GST Registration Certificate?

GST Registration should be done by a business whose turnover exceeds the prescribed limit. Every registered taxpayer will be issued a GST Registration Certificate in Form GST REG-06. A registered taxpayer can also download the Certificate from the GST Portal. The GST Registration Certificate can only be downloaded only from the GST Portal the Government will not issue any certificate in the physical form.

 

What is GSTIN?

Goods and Services Identification Number (GSTIN) is a unique 15–digit identification number assigned to every taxpayer registered under GST. Every taxpayer under the GST regime is provided with a State + PAN-based 15-digit Goods and Services Taxpayer Identification Number (GSTIN).

Initially, a business is given a provisional ID on logging into the portal and within 3 months the business has to complete the registration process by giving details of the business. This provisional ID is then converted to GSTIN. Here is the breakdown of the GSTIN format:

  • The first 2 digits of the 15-digit GSTIN represents the state code.
  • The next 10 digits are the PAN Number of the person or the business entity.
  • The 13th digit is based on the number of registrations done by the firm within a state under the same PAN.
  • The 14th digit will be the alphabet “Z” by default
  • The last digit is called the check code to detect errors and can be denoted by either a number or an alphabet.

 

What do you mean by “Place of Business”?

As per GST authorities in India, Principal Place of Business is the primary location within the State where a taxpayer’s business is performed. The principal place of business is generally the address where the business’s books of accounts and records are kept and are often where the head of the firm or at least top management is located.

Additional Place of business is the place of business where the taxpayer carries out business-related activities within the State, in addition to the Principal Place of Business.

According to the GST Act, the taxpayers should display the GST registration certificate in a prominent location at the principal place of business and all additional places of business. Hence, in an office or shop, the taxpayer shall also display the GST registration certificate at the entrance or near the billing section.

 

What are the Consequences for Not Displaying GSTIN?

  • As per Section 125 of CGST Act, 2017, any person, who contravenes any of the provisions of this Act or any rules made thereunder for which no penalty is separately provided for in this Act, shall be liable to a penalty which may extend to Rs 25,000.
  • This is a general penalty under CGST Act. Since there is no specific penalty for this contravention this will be covered under the general penalty.
  • Hence, if any registered person fails to display GSTIN on board, he will be liable to pay a penalty under section 125 of the CGST Act of Rs. 25,000
  • GST Department sometimes conducts raids on Business premises to see if the GSTIN No is visible on Signboard of the Business premises. So, it is advised to get the same affixed on the Signboard and on the front door of the Office. Notice can be issued if the GSTIN is not mentioned on the Signboard and on the Front door of Business premises under Section 125 of CGST Act 2017, with a penalty up to 25,000.
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