Raj Jaggi
Rule 10A - A Simple Requirement with Serious Consequences
Obtaining a GSTIN does not complete the registration process. A registered person must also comply with certain requirements after registration. Rule 10A of the CGST Rules, 2017 is one such requirement. Subject to specified exceptions, it requires the registered person to furnish bank account details on the GST portal within the prescribed period.
The requirement appears simple where the taxpayer maintains only one bank account. The difficulty arises where several accounts are maintained. A company may have current accounts with different banks, while a business having several branches may use separate accounts for operational purposes. A proprietor may also maintain a business current account as well as personal savings or deposit accounts. Some accounts may be used only for loans, fixed deposits, escrow arrangements or specific projects.
An important question therefore arises: when Rule 10A requires “details of bank account”, does furnishing one bank account satisfy the Rule, or must every account maintained by the registered person be disclosed? The question is important because non-compliance may lead to blocking of GSTR-1/IFF, suspension and even cancellation of registration. The extent of the obligation must therefore be determined from the actual language and purpose of Rule 10A.
Evolution of Rule 10A
Rule 10A was inserted into the CGST Rules by Notification No. 31/2019-Central Tax dated 28.06.2019. Originally, a registered person was required to furnish bank account details on the GST portal within 45 days of the date of grant of registration, or before the due date for filing the return under Section 39, whichever was earlier.
The Rule does not apply to persons registered under Rules 12 and 16. Rule 12 broadly covers persons registered for deducting or collecting tax at source, while Rule 16 deals with registration granted suo motu by the proper officer. For other registered persons, furnishing bank account details became an important post-registration requirement.
Notification No. 38/2023-Central Tax dated 04.08.2023 reduced the period from 45 days to 30 days and linked the requirement to the furnishing of outward-supply details. Under the present Rule, bank account details must be furnished within 30 days of the date of grant of registration, or before furnishing FORM GSTR-1 or using the Invoice Furnishing Facility under Section 37, whichever is earlier. Thus, bank account details must now be furnished before the taxpayer can furnish outward-supply details on the GST portal.
Proposed Amendment of 2021 Has Not Come into Force
Notification No. 35/2021-Central Tax dated 24.09.2021 proposed that the bank account should be in the name of the registered person and on the registered person’s PAN. In the case of a proprietorship concern, the proprietor’s PAN was also required to be linked with Aadhaar. However, the amendment was to take effect from a date to be separately notified. It therefore did not become operative merely upon issue of the notification.
Rule 10A was subsequently substituted by Notification No. 38/2023-Central Tax dated 04.08.2023. The present Rule does not contain the proposed requirements relating to the account holder’s name, PAN or Aadhaar. Those requirements should therefore not be treated as part of Rule 10A presently in force, although the GST portal may validate bank account details against PAN or other available information.
The Central Question - What Does "Details of Bank Account" Mean?
The present Rule 10A uses the expression “details of bank account”. It does not say “details of all bank accounts”, “details of every bank account”, “details of each bank account” or words of similar exhaustive character. That omission assumes importance when the scope of the obligation is examined.
Tax legislation frequently uses expressions such as “all”, “every”, “any” or “each” where comprehensive disclosure is intended. Rule 10A contains no such expression. Its language therefore does not readily support the proposition that every banking relationship of the registered person must necessarily be disclosed on the GST portal. Had such an extensive disclosure obligation been intended, it could easily have been expressed in clear terms.
The distinction is not merely grammatical. A registered person may maintain several types of accounts with little or no connection to the taxable business carried on under the GSTIN. Treating Rule 10A as an obligation to disclose every such account would considerably enlarge its scope. Such an interpretation becomes particularly difficult when failure to comply may ultimately affect the continuation of the GST registration itself.
Does the Singular Include the Plural?
It may be argued that under Section 13(2) of the General Clauses Act, 1897, words in the singular include the plural, and therefore “bank account” may also mean “bank accounts”. However, this principle does not convert a requirement to furnish bank account details into an obligation to disclose every bank account maintained by the taxpayer. Such an exhaustive obligation, particularly when non-compliance carries serious consequences, should arise from clear language in the Rule rather than from implication.
The Purpose of Rule 10A Helps Explain Its Scope
Rule 10A forms part of the GST registration-verification framework. Furnishing bank account details helps establish that a genuine and identifiable person stands behind the GST registration and strengthens safeguards against fake registrations and fraudulent ITC. Accordingly, the GST portal provides for validation of bank account particulars, including verification of PAN-related details.
However, this verification objective does not require the taxpayer to disclose every bank account maintained. A valid and verifiable banking relationship can serve the purpose of identification. There is an important difference between requiring bank details for verification and requiring complete disclosure of every bank account maintained by the registered person.
Multiple Bank Accounts on the GST Portal - Permissive, Not Mandatory
The GST portal permits a taxpayer to add up to ten bank accounts. This facility enables the disclosure of multiple accounts but does not require all ten fields to be filled or every bank account maintained by the taxpayer to be disclosed. The expression “up to ten” merely fixes the maximum number of accounts that may be added. Thus, the portal facility supports the view that disclosure of multiple accounts is permissive rather than mandatory and cannot, by itself, enlarge the obligation contained in Rule 10A.
One Account May Suffice - But Undisclosed Business Accounts Still Matter
Rule 10A does not expressly require disclosure of every bank account. Therefore, furnishing details of one valid account accepted on the common portal may satisfy the requirement of the Rule.
However, this does not render other business accounts irrelevant under GST. If substantial business receipts or payments are routed through an undeclared account, the Department may examine that account during scrutiny, audit or investigation to verify turnover or tax liability. Thus, compliance with Rule 10A and the examination of business transactions are separate issues. Non-disclosure of an account may not, by itself, violate Rule 10A, but transactions routed through that account remain open to verification under the GST law.
Personal Accounts - A Necessary Distinction
In the case of a proprietorship, the proprietor may maintain a business current account along with personal savings or deposit accounts. Rule 10A should not ordinarily be read as requiring disclosure of every personal banking facility merely because it belongs to the proprietor. However, if a personal account is regularly used for business receipts or payments, transactions through that account may become relevant for verifying taxable turnover and the correctness of GST returns, even though its non-disclosure may not, by itself, amount to a violation of Rule 10.
Non-Compliance Can Have Serious Consequences
Non-compliance with Rule 10A is not merely a procedural lapse. Under Rule 21, violation of Rule 10A may lead to cancellation of registration, while Rule 21A permits suspension of registration and electronic intimation in FORM GST REG-31. The taxpayer may also be prevented from furnishing further GSTR-1/IFF. However, where registration has been suspended for non-compliance with Rule 10A and has not already been cancelled, compliance with the Rule can result in automatic revocation of the suspension. Timely furnishing of bank account details is therefore essential for uninterrupted GST compliance.
The 30-Day Period Is Only One Part of the Time Limit
After the 2023 amendment, a registered person does not necessarily have the full 30 days to furnish bank-account details. Rule 10A requires the details to be furnished within 30 days from the date of registration or before furnishing GSTR-1/IFF, whichever is earlier. Thus, 30 days is only the outer limit; where GSTR-1/IFF is to be furnished earlier, the bank-account details must be provided before such furnishing.
Refunds Provide a Strong Practical Reason for Declaring the Appropriate Account
Bank account details are also important for GST refunds, since the applicant selects the refund account from the accounts listed in the registration profile while filing FORM GST RFD-01. Although furnishing one account may satisfy Rule 10A, a taxpayer intending to receive refunds in another account should add and validate that account by amending the registration particulars. This is especially advisable for businesses that regularly claim substantial refunds, as bank validation issues may otherwise delay the refund.
Changes in Bank Accounts Should Not Be Ignored
Banking arrangements may change due to account closures, changes in banks or branches, or revisions to account particulars. If an account declared on the GST portal becomes inoperative, update its details through Amendment of Registration Non-Core Fields. Even if not every account must be disclosed, the taxpayer should ensure that at least one valid and operative bank account is correctly reflected in the registration particulars.
Can Registration Be Cancelled Merely Because Another Account Was Not Declared?
Rule 21 permits cancellation of registration for violation of Rule 10A. However, where a taxpayer has furnished a valid bank account within the prescribed period, and it has been accepted on the common portal, mere non-disclosure of another account should not constitute a violation of Rule 10A, as that would effectively read the word “all” into the Rule. Undisclosed accounts may nevertheless be examined separately if transactions routed through them indicate suppressed turnover or any other contravention of the GST law.
Severe Consequences Require a Clear Statutory Obligation
Since non-compliance with Rule 10A may lead to suspension or cancellation of registration, the obligation imposed by the Rule should be determined from its clear language and not enlarged by implication. If disclosure of all bank accounts is intended, the Rule can expressly provide for it. In the absence of such language, an exhaustive disclosure requirement carrying serious civil consequences should not be created merely by interpretation.
A Practical Illustration
Aayra Ltd. obtains GST registration and maintains three current accounts with different banks. One account is its principal operating account, the second is used mainly for vendor payments, and the third is maintained for a particular project. Aayra Ltd. furnishes its principal operating account on the GST portal within the period prescribed by Rule 10A, and the account is successfully validated.
On the view discussed above, the requirement of Rule 10A stands satisfied. The mere fact that the other two accounts have not been entered on the portal should not, by itself, amount to a contravention of Rule 10A. The rule does not expressly require details of “all bank accounts”.
However, from a compliance perspective, Aayra Ltd. would be well advised to add the other two current accounts if substantial business transactions are regularly routed through them. Doing so creates a more transparent compliance trail and avoids needless questions during scrutiny or audit. Thus, the legal answer and the practical recommendation need not be identical.
Rule 10A Requires Sufficiency, Not Exhaustiveness
Viewed in its statutory context, Rule 10A requires furnishing bank account particulars but does not expressly require disclosure of every bank account maintained by the taxpayer. The portal facility, which permits up to ten accounts, enables multiple accounts to be disclosed but does not make such disclosure exhaustive. Nevertheless, as a matter of prudent compliance, accounts regularly used for substantial business transactions or GST refunds should ordinarily be disclosed.
Conclusion - One Account May Satisfy the Rule
On a textual and contextual reading, Rule 10A does not appear to require disclosure of every bank account maintained by a registered person. Furnishing one valid bank account within the prescribed time should ordinarily satisfy the Rule, since it does not use expressions such as “all”, “every” or “each”. Nevertheless, as a matter of prudent compliance, accounts regularly used for substantial business transactions or GST refunds should also be disclosed. Thus, the statutory requirement may be limited, but greater transparency remains the safer approach to compliance.
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