How “Know Your Supplier” Scheme Under GST Will Work For Taxpayers?

All you need to know about “Know Your Supplier” scheme

How “Know Your Supplier” Scheme Under GST Will Work For Taxpayers?

All you need to know about “Know Your Supplier” scheme

“Know Your Supplier” scheme under GST came out in a recent GST council meeting held in Delhi headed by Union Finance & Corporate Affairs Minister Nirmala Sitharaman.

What is the “Know Your Supplier” Scheme?

The new facility called “Know Your Supplier” has been introduced in the 39th GST council meeting (In the month of March 2020) to enable every registered person (Taxpayer) to obtain some basic information about their suppliers And also able to identify the compliance of the supplier with whom they transact or propose to conduct business.

What is the Purpose Behind It?

Every person registered under GST guideline is liable to make tax payment on time & file GSTR on time. However few suppliers have defaulted in GST compliances. Due to this buyer faces problem in claiming GST Credit. Because it is important for them to ensure all purchases ITC is reflected in GSTR 2A.

Previously the government wanted to implement the compliance rating system that gives a rating to the supplier based on their accuracy in invoice uploading, regularity in return filing and compliance with the other GST requirements. As far as the government is concerned, this system needs a separate mechanism to be established by the government.

Thus, the government believes that it is better to provide suppliers information to the recipients so that they can make the best assessment of the suppliers before continuing to do business with them. Therefore GST Council decided to introduce the “Know Your Supplier” Scheme to solve this trade problem.


How to Avail the “Know Your Supplier” Scheme?


This facility might be available to the taxpayer after logging into the GST portal. However, further details are yet to be notified as on 19th March 2020.
The taxpayer may get access to the supplier’s information submitted at the time of GST registration or at the time of amendments to their GST registration.


What is the Use of Check Suppliers/Vendors under “Know Your Supplier”?

A Taxpayer can fetch authorized details about the supplier and can check the regularity of GSTR filing. This function will work as an information exchange module and provide information about the existing suppliers as well as the proposed suppliers.

“Know Your Supplier” Scheme is introduced in GST to benefit taxpayers, that buyers can check-
Details of Registered GST suppliers with whom they are doing business, online from the government site
Also, the taxpayer can get to know about a new supplier, once he goes through the supplier’s history regarding compliance with the law
This information will help the buyer to find genuine suppliers
It will help to find a supplier who is paying tax & filing GST returns on time and reduce the non-compliance by the suppliers
It will help to ensure that all purchases ITC is reflected in GSTR 2A
it will make claiming GST credit easy

Below information might be available under the “Know Your Supplier” scheme.
1. Date of GST Registration
2. GST Number
3. Name of Supplier
4. State of Supplier
5. GSTR1 Filing status of a supplier
6.
GSTR3B filing status of a supplier
7.
Active or cancelled registration

Note: Click to check details GST Portal 


When will “Know Your Supplier” Scheme will come in Force?


The decision was taken in a meeting for “Know Your Supplier” was just the introduction of Scheme. The KYS Scheme will launch soon. The date is not notified yet by the Council. Once notification is issued this scheme will get active.


After the 39th GST Council meeting, The Finance Minister Nirmala Sitharaman explained that the “Know Your Supplier” scheme was inspired by the “Know Your Customer” (KYC) scheme. The KYC is a process where an organization collects proof to identify the existence and genuineness of its customers. Once this scheme is made available, the Taxpayer will get more clarification on the supplier’s identity and will make good decisions for their business.


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Also Read, 
1. Latest GST News – 39th GST Council Meet Key Highlights
2. Latest GST News – What is GSTR 3B? Who Should File, How to Generate, How to File & Due Dates
3. 4 Big Inventory Mistakes You Could Be Making in Your Small Business!
4. 5 Things “Profit & Loss Report” Says About Your Business
5. 5 Clever Ways To Prevent Billing Disputes With Your Parties & Get Payments Faster
6. 6 Easy Tips To Pick Inventory That Sells 2X Faster

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