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Published on:
February 20, 2023
By
Paramita

CBIC Circular Focuses on Non-Payment of GST by Suppliers

The Central Board of Indirect Taxes and Customs (CBIC) recently issued a circular addressing the non-payment of GST by suppliers. The circular, dated May 3, 2021, is aimed at curbing the practice of fraudulent non-payment of GST by suppliers.

The circular states that non-payment of GST by suppliers not only leads to loss of revenue for the government but also affects other businesses in the supply chain. The circular focuses on identifying and penalizing suppliers who are not paying GST on their supplies.

The circular highlights the following points:

  • Suppliers who have not paid GST for two consecutive months or more will be identified and their GST registration will be suspended.
  • Registered persons who procure supplies from such suspended suppliers will not be able to claim input tax credit (ITC) for the taxes paid to such suppliers.
  • The suspension of registration will be lifted only after the supplier pays the pending GST liability along with the interest and penalty.
  • Non-payment of GST by suppliers will be treated as a violation of the GST law and will attract penal action.

The circular also states that businesses should ensure that they are dealing with genuine and compliant suppliers. They should also ensure that they are carrying out proper due diligence before entering into any business transactions.

The circular is a step towards ensuring compliance with GST laws and preventing fraudulent activities. It is also aimed at promoting fair competition in the market by ensuring that all businesses are compliant with GST laws.

Businesses should take note of the circular and ensure that they are compliant with GST laws. They should also ensure that they are dealing with compliant suppliers to avoid any disruptions in their supply chain.

In conclusion, the circular is a step towards ensuring compliance with GST laws and preventing fraudulent activities. It is a sign of the government's commitment to promoting fair competition in the market and ensuring that businesses are compliant with GST laws.

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Updated on:
March 16, 2024