Compliance with Rule 10A
for Furnishing Bank Account Details: GST Filing and Penalty Implications
By Yogesh Verma (CS/LLB) / 2 min read / GST Articles
Introduction: The
GST regime places significant emphasis on transparency and accurate reporting
of taxpayer information. One such requirement is the furnishing of valid bank
account details under Rule 10A of the Central Goods and Services Tax (CGST)
Rules, 2017. Compliance with this rule is essential for both maintaining an
active GST registration and fulfilling tax obligations such as filing GSTR-1 or
using the Invoice Furnishing Facility (IFF). This article highlights the key
aspects of Rule 10A, the implications of non-compliance, recent advisories, and
the associated penalties.
Rule 10A: Furnishing of
Bank Account Details
Rule 10A of the CGST
Rules, notified via Notification No. 31/2019, mandates that after a
taxpayer receives their GST registration and the corresponding Goods and
Services Tax Identification Number (GSTIN), they must furnish valid bank
account details. This requirement must be met within the earlier of:
- 30 days from the date of registration
(as per the updated Notification No. 38/2023), or
- Before filing outward supply details
in FORM GSTR-1 or using the Invoice Furnishing Facility (IFF).
The objective of Rule 10A
is to ensure that all registered taxpayers have updated and validated bank
account details, which are crucial for maintaining financial transparency in
GST transactions.
Advisory on Bank Account
Validation and Non-Core Amendments
On August 23, 2024,
the GSTN issued an advisory clarifying that from September 1, 2024,
taxpayers will not be able to file GSTR-1 or use the IFF for the
tax period of August 2024 onwards unless they have furnished their valid bank
account details. This advisory follows repeated communications urging taxpayers
to comply with Rule 10A.
The process for updating
bank account details can be completed by visiting the Services >
Registration > Amendment of Registration (Non-Core Fields) section on
the GST Portal. Once the taxpayer has added their bank account details, they
can proceed to file their returns. The bank account details will be validated
post-filing of GSTR-1/IFF.
Procedure for Validation
of Bank Account During Non-Core Amendments
As per the recent update,
when a taxpayer attempts to amend their bank account details using a non-core
amendment on the GST portal, they must follow these steps:
1. Enter
Bank Account Details: The taxpayer must input the correct bank
account information.
2. Click
on "Validate Account Details": This button initiates
the verification process for the bank account details.
3. Enable
"Save" Button: Only after validating the account
details will the "Save" button be enabled, allowing the taxpayer to
proceed with saving the changes.
This validation process
ensures that all updated bank account details are accurate and reduce
discrepancies in future transactions.
Penalty for
Non-Compliance with Rule 10A
Failure to comply with
Rule 10A can have serious consequences. From September 2024 onwards,
non-compliance will result in the taxpayer being unable to file GSTR-1 or
use the IFF, effectively disrupting their ability to report outward
supplies.
Additionally,
non-compliance with Rule 10A may attract penalties under Section 125 of the
CGST Act, 2017, which imposes a general penalty for contraventions
of the Act for which no specific penalty is prescribed. According to Section
125, a taxpayer who violates Rule 10A may face a penalty of up to ₹25,000.
Section 125: General
Penalty Provisions
Section 125 states that
any person who contravenes the provisions of the CGST Act or its rules, where
no specific penalty is prescribed, shall be liable to a penalty that may extend
to ₹25,000. As furnishing bank account details under Rule 10A is crucial for
GST compliance, failure to do so will trigger the application of this section,
making the taxpayer liable for penalties.
Conclusion
Compliance with Rule 10A
is not merely a procedural formality but a critical requirement for maintaining
active GST registration and fulfilling tax obligations. As the rule becomes
enforceable from September 1, 2024, taxpayers must ensure that they have
furnished valid bank account details to avoid disruptions in filing GSTR-1/IFF
and potential penalties under Section 125. Non-compliance may not only halt
business operations but also result in significant financial penalties.
To avoid such issues,
taxpayers should promptly update their bank account details on the GST portal
and ensure their records are accurate and validated.
Disclaimer: All the Information is based on the notification, circular and order issued by the Govt. authority and judgement delivered by the court or the authority information is strictly for educational purposes and on the basis of our best understanding of laws & not binding on anyone.
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