Find
Paying a third party instead of the supplier weakens your proof that the purchase was genuine. Payment trails are one of the things officers check when tracing fake invoice chains. Pay only into the invoicing supplier's own account.
GST
Supplier wants payment to a different firm's account
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Provisions
Sec 155, CGST Act 2017; Sec 16(2), second proviso, CGST Act 2017
Analysis
In fake invoice rackets, money is often routed through other accounts and returned. Even if your supplier is honest, a third-party payment makes it hard to show you paid him the value and tax. Example: Rs 5.9 lakh paid to a cousin's firm for a supplier's invoice may be questioned in a notice. Insist on payment to the account in the supplier's name, ideally matching the bank details on the GST portal.
Close
- Refuse payment to any account not in the supplier's legal name
- Get the supplier's bank details on letterhead and match with his registration
- Pay by NEFT, RTGS or cheque, not cash
- Keep the bank proof in the purchase file
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