This article highlights the rules associated with the newly introduced regulation 10A, as well as the consequences that the taxpayer must face in the event of non-compliance with the same.
Overview:
Did you know that the Central Board of Indirect Taxes and Customs has made it required by law for new GST registrants to furnish bank account information within a certain time frame? In this blog, let us know about the bank details for GST registration.
CBIC notified the Central Goods and Service Tax (Fourth Amendment) Rules, 2019, via notification number. 31/2019 – Central Tax dated 28 June 2019 revising the Central Goods and Service Tax Rules, 2017. Further, they have added a new regulation namely, Rule 10A to the Central Goods and Services Tax Rules, 2017, as a result of the aforementioned notification. GST Rule 10A comprises regulations relating to the provision of a bank account in order to complete the GST Registration Process.
| Do keep in mind that every other GST registered taxpayer must update their bank account details on the GST Portal within 45 days after receiving valid GST registration. |
Consequence for Non-Compliance
As per notification number 31/2019 – Central Tax dated 28th June 2019, an amendment has been made to rule 21, introducing clause (d). This clause emphasizes that if there is a breach of the provisions outlined in rule 10A, the registration of the concerned taxable individual could face cancellation.
It is advised to promptly update your bank account information within the designated time frame to avoid the potential cancellation of your GST registration.
Introduction to Rule 10A
According to Rule 10A, a newly registered taxpayer must furnish their bank account details. This is after receiving the certificate of registration in Form GST REG-06: https://reg.gst.gov.in/registration/. And the GSTIN (Goods and Services Tax Identification Number).
Likewise, bank account information must be provided by the enrolled taxpayer, within 45 days after the registration date; or within the timeframe prescribed in Section 39 of the Central Goods and Services Tax Act for filing a return.
Rule 10A Exemptions
Rule 10A provides some exclusions. The following individuals are exempt from the requirement to update their bank account on the GST Portal.
- Further, to begin, those who have registered as a ‘Tax Deductor at Source’ pursuant Rule 12, Section 51.
- Second, individuals designated as ‘Tax Collectors at Source’ pursuant Rule 12, Section 52.
- Finally, those who have registration pursuant to Rule 16, i.e., those who have been granted suo-moto registration by the competent authority.
Use our GST calculator to determine the exact amount of GST to be paid before registering for GST.
Rule 10A Compliance Step-by-Step guide
If GST registered taxpayers do not update their bank accounts details within 45 days of enrolling, the portal will prompt them to comply with the criteria underlined in Rule 10A.
- To begin, go to the GST portal and sign in. Select ‘Services’ from the drop-down menu, followed by ‘Registration’.
- Then, from the drop-down box, choose ‘Amendment of Registration Non-Core Fields‘.
- Click on the ‘Bank Accounts’ tab. Fill up your bank account details (such as account number, IFSC, address details, bank account type)
- Similarly, next click on the verification button, you can select an authorised signature and a location. Sign the application with DSC, e-sign, or EVC.
- A message will then appear on the screen, validating the same will be sent to the registered email and cell phone.
Rule 10A Non-Compliance
Rule 21 of the Central Goods and Service Tax Rules, 2017 addresses the rules for cancellation of registration in certain cases. Further, rule 21 now includes a new sub-clause (d) which goes on to state that if the requirements of rule 10A are ignored. An individual’s registration may even have a cancellation. Likewise, this clearly goes to show that if a taxpayer who is subject to Rule 10A’s fails to comply, their registration may be terminated.
FAQs
How long does it take for the GST registration to be linked with the designated bank account?
The time it takes for your GST registration to be linked with your designated bank account typically depends on the verification process of your bank and the workload of the GST authorities. However, it usually takes 3-5 business days for the link to be established.
Can a business owner change the linked bank account after the GST registration is complete, and what is the process for doing so?
Yes, you can change the linked bank account after GST registration. You need to submit an application for amendment in Form GST REG-14 along with the required documents, including the new bank account details. The processing time may vary, but it typically takes 7-10 business days.
Are there any restrictions on the type of transactions that can be conducted through the linked bank account for GST purposes?
No specific restrictions exist on the type of transactions you can conduct through the linked bank account for GST purposes. However, it's important to maintain proper records and ensure transactions are related to your business activities.
What happens if there are changes in the bank account details after GST registration, and how should these changes be updated?
If your bank account details change after GST registration, you need to update them through Form GST REG-14 within 15 days of the change. Failure to update may lead to penalties.
Is it mandatory for the linked bank account to be in the name of the business or can it be in the name of the proprietor or partners?
The linked bank account can be in the name of the business entity, proprietor, or partner, depending on the type of business registration. For sole proprietorships and partnerships, the account can be in the individual's name. However, it's important to ensure the account holder's name matches the name on the GST registration certificate.
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