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Basic checks on GSTIN status, filing history, premises and payment discipline stop most fake supplier risks. These also become your proof of good faith later.
GST
Supplier due diligence to avoid fake ITC risk
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Provisions
Sec 16(2)(c), CGST Act 2017; Sec 155, CGST Act 2017; Rule 37A, CGST Rules 2017
Analysis
Check GSTIN status and return filing on Search Taxpayer, verify the address and visit if the order is large, and see if the supplier was registered recently with large sales. Red flags include prices well below market, insistence on cash, unknown transporters and invoices without e-way bills. Rule 37A also makes you reverse credit if the supplier does not file GSTR-3B by 30 September after the year.
Close
- Verify GSTIN status, registration date and filing history.
- Collect KYC: PAN, address proof, bank letter.
- Check e-way bill and transport for each supply.
- Pay only by bank and track supplier filings monthly.
- Record the checks in a vendor file.
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