GST fraud in restaurant bills: check GSTIN status in 30 seconds
A chartered accountant found a restaurant charging GST it was not entitled to collect, and shows how diners can check a GSTIN before paying
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Paying GST is mandatory in India, but that does not mean every GST amount added to a restaurant bill is legitimate. Restaurants and eateries sometimes charge customers extra in the name of GST even when they are not permitted to. This came to light through an experience shared by practising chartered accountant Prateek Bharadwa.
Bharadwa said that on September 8 he visited a restaurant in Udaipur. His bill came to Rs 641.90, of which Rs 32.10 was added as GST, comprising 2.5 percent CGST and 2.5 percent SGST. Before paying, Bharadwa decided to check whether the restaurant fell under the composition tax category, and if so, whether such restaurants are allowed to charge GST from customers at all.
To check this, Bharadwa opened the gst.gov.in website before paying the bill. He entered the GSTIN number printed on the bill and searched for it on the site. Only after the status showed "regular taxpayer" did he make the payment. According to Bharadwa, most people do not check which tax scheme a restaurant is registered under before paying their bill. He said, "A composition taxpayer cannot charge you GST."
Under the rules, restaurants registered as composition dealers pay tax to the government at a fixed rate. Such restaurants are not entitled to charge GST separately from customers and cannot add it to the bill. If a restaurant does this, the money goes straight into the owner's pocket rather than to the government. This is why the 30-second check to find out whether a restaurant is registered under the composition scheme or the regular scheme is necessary.
The check is simple. First, open the government GST portal gst.gov.in on a phone. Then go to the menu and select the "Search Taxpayer" option. Enter the 15-digit GSTIN number printed on the restaurant bill, fill in the captcha and click search. The screen will then show the taxpayer's registration status.
If it shows "composition", the restaurant cannot charge even one rupee of GST, and it can be asked to remove GST from the bill immediately. If it shows "regular", the restaurant is entitled to charge 5 percent or 18 percent GST as per the rules. If a composition restaurant insists on charging GST anyway, a complaint can be filed with the GST Council or a consumer forum along with evidence.
