How to Ensure dealing with a GST Compliant Supplier?

Ensuring that your supplier is GST compliant is important to avoid any compliance issues or penalties. Here are some ways to ensure that you are dealing with a GST compliant supplier:

1. Check the GST registration number: Verify the GST registration number of the supplier using the GSTIN verification tool available on the GST portal. This will help you to ensure that the supplier is registered under GST and that the GST number provided to you is valid.

2. Verify the tax invoices: Check the tax invoices issued by the supplier for accuracy and completeness. The invoices should contain all the required details such as the supplier's name, address, GST registration number, the date of the invoice, description of goods or services, the amount of GST charged, etc. Ensure that the invoice mentions the correct tax rate and the amount of tax charged.

3. Check if the supplier is filing returns on time: A GST compliant supplier is required to file monthly and annual returns on time. Check if the supplier is filing their returns on time by verifying their GST returns on the GST portal. Late filing of returns can attract penalties and may indicate non-compliance.

4. Verify the supplier's compliance history: Check the compliance history of the supplier by conducting due diligence, which can include background checks, supplier references, etc. This can help you to ensure that the supplier has a good compliance record and is not involved in any non-compliant activities.

5. Consider engaging with a tax consultant: Engage a tax consultant or a chartered accountant to help you in ensuring the compliance of your suppliers. They can help you to assess the compliance risks and also provide you with assistance in conducting due diligence on your suppliers.

In conclusion, dealing with a GST compliant supplier is essential to avoid any non-compliance issues or penalties. By following the above-mentioned steps, you can ensure that your suppliers are GST compliant and also safeguard your business interests.

FAQs

Here are some frequently asked questions related to ensuring that you are dealing with a GST compliant supplier:

Q: What is the importance of dealing with a GST compliant supplier?

A: Dealing with a GST compliant supplier is important to ensure that there are no compliance issues or penalties related to GST. A GST compliant supplier will issue correct and complete tax invoices and file their GST returns on time, which can help in avoiding any issues related to input tax credit or other compliance-related matters.

Q: How can I check if my supplier is registered under GST?

A: You can verify if your supplier is registered under GST by checking their GST registration number using the GSTIN verification tool available on the GST portal. This will help you to ensure that the supplier is registered under GST and that the GST number provided to you is valid.

Q: What should I verify in the tax invoices issued by the supplier?

A: You should verify that the tax invoices issued by the supplier contain all the required details such as the supplier's name, address, GST registration number, the date of the invoice, description of goods or services, the amount of GST charged, etc. Ensure that the invoice mentions the correct tax rate and the amount of tax charged.

Q: How can I check if my supplier is filing returns on time?

A: You can check if your supplier is filing their GST returns on time by verifying their GST returns on the GST portal. Late filing of returns can attract penalties and may indicate non-compliance.

Q: What should I do if I discover that my supplier is not GST compliant?

A: If you discover that your supplier is not GST compliant, you should discuss the issue with them and request them to rectify the non-compliance. If the issue persists, you may have to consider terminating the business relationship with the supplier or engaging with a legal advisor to resolve the matter.

Q: Is it necessary to engage a tax consultant to ensure compliance of suppliers?

A: Engaging a tax consultant or a chartered accountant can be helpful in assessing the compliance risks related to your suppliers and providing you with assistance in conducting due diligence. However, it is not mandatory and ultimately depends on the level of risk you are willing to assume and the resources available to you.

In conclusion, ensuring that you are dealing with a GST compliant supplier is important to avoid any compliance issues or penalties related to GST. By following the steps mentioned above and conducting due diligence, you can ensure that your suppliers are GST compliant and also safeguard your business interests.