Narendra & Associates

“Your GST Vendor Became ‘Fraudulent’ Later… Can Your ITC Still Be Safe?”

Many MSME businesses are receiving GST notices because a supplier they dealt with years ago is now marked as suspicious or non-genuine by the department.

But here is the important point:

If your business transaction was genuine, your ITC may still be legally defendable.

Businesses should maintain proper records such as:

✔ GST Invoice
✔ GSTR-2B reflection
✔ Bank payment proof
✔ Agreements or work orders
✔ Emails / communication
✔ Proof of actual services or goods received

In many cases, authorities are expected to establish fraud, collusion, or fake transactions before denying ITC merely because the vendor later defaults.

This is why MSMEs should not treat GST compliance as only “return filing”.

Strong documentation and vendor verification systems are becoming equally important.

Practical lesson for businesses:

“Every GST invoice should have a proper business story and supporting evidence behind it.”

Good compliance today can prevent major litigation tomorrow.

Many businesses think filing GST returns = proper accounting. It doesn’t.

Under various Indian laws, maintaining Books of Accounts and statutory records is either mandatory or practically unavoidable.

Here’s a quick breakdown for MSMEs 👇

✅ Income Tax Act (Sec 44AA)
Books required if: • Business turnover exceeds ₹25 Lakhs
• Income exceeds ₹2.5 Lakhs

✅ GST Act
GST registered persons must maintain: • Sales & Purchase Registers
• Stock Records
• ITC & Tax Liability Records

✅ Companies Act / LLP Act
Proper books on double-entry basis are mandatory.

✅ PF & ESI Laws
Employers covered under PF/ESI must maintain: • Salary & Wage Registers
• Attendance Records
• Employee Contribution Records
• Leave & Overtime Details

✅ Banking & Loan Requirements
Banks expect: • Proper financials
• Stock statements
• Debtor/Creditor records
• GST reconciliation

The real issue?

Many MSMEs have: ✔ GST filings
✔ Bank statements
✔ UPI collections

But lack: ❌ Proper ledgers
❌ Payroll records
❌ Stock accounting
❌ MIS reporting

This creates major risks during: ⚠ GST notices
⚠ Income tax scrutiny
⚠ PF/ESI inspections
⚠ Loan processing

Minimum records every business should maintain: • Cash & Bank Book
• Sales & Purchase Register
• Expense Register
• Payroll Register
• Debtors/Creditors List
• Stock Register
• GST workings

Strong books are not just for compliance.
They improve control, profitability, and funding eligibility.

Bajaj Finserv hiring Senior Executive - Operations & Service

Location: Chitradurga, Karnataka
Qualifications And Experience:
• Graduate 1-4 years of relevant experience in Gold loan Industry.
* Knowledge of Gold Appraisal process
* Imparting Gold Appraisal / Evaluation Training.
* Good interpersonal skills

JD & Apply

Bajaj Finserv hiring Senior Executive - Operations and Service in Chitradurga, India | LinkedIn Posted 12:48:43 PM. Location Name: HiriyurJob Purpose“This position is open with Bajaj Finance ltd.”Duties And…See this and similar jobs on LinkedIn.

Will be happy if this helps atleast one aspirant

Stuck in a Low-Paying Job Because You Dropped CA? It's Time to Stop Quitting and Start "Splitting." For countless aspiring Chartered Accountants, the journey is fraught with challenges. Many start with immense determination, only to find themselves overwhelmed by the sheer volume of the syllabus, the pressure of simultaneous exams, or the demands of life and work.