Goods and services tax are a new amendment in respect of all other indirect taxes enveloped under one tax, which actually came into existence in India from July 1, 2017. A significant feature to be implemented under this arrangement for seamless operation would be GSTIN, which is the unique identification number provided to every business that gets registered under the GST scheme. Therefore, let us know about GSTIN, its meaning, its format and the GST number verification.
What is the GSTIN Number?
- Prior to the implementation of GST, each state tax authority provided a unique TIN number to each merchant registered under the state VAT statute. Likewise, the Central Board of Indirect Taxation and Customs (CBIC) issued service providers a service tax registration number.
- Every registered taxpayer is assigned a registration under the GST regime, and they are all consolidated onto a single platform for administrative and compliance needs.
- A GSTIN will be given to each company doing business in a state or Union territory.
Format of GSTIN Number
A 15-digit Goods and Services Taxpayer Identification Number (GSTIN) based on State + PAN is issued to each taxpayer under the GST regime.
The GSTIN format split is as follows:
- Full Form: Goods and Services Tax Identification Number
- The First Two Digits: The first two digits of GSTIN shows the state code.
- Next 10 Digits: The subsequent ten numbers make up the PAN of the individual/ corporate entity.
- Thirteenth Digit: This number is determined by how many times a company has registered under the same PAN in a certain state.
- Fourteenth Digit: "Z" will be the fourteenth digit by default.
GST Number Example
- The number "1" shall be used as the thirteenth digit of the GSTIN in its format if a business or legal entity has just one registration in the same state. The number "2" shall be the 13th digit of the GSTIN if the same business is registered again in the same state.
- Likewise, if the organization completes 11 registrations in the same state, the letter "B" shall be the 13th digit of the GSTIN. In the same manner, any legal organization can thus register in a state and conduct its operations in a maximum of 35 verticals of business.
What are the Documents Required to Obtain a GSTIN?
The following documents is normally required when applying for a GSTIN:
- Photographs
- The constitution of the taxpayer
- Proof of the company's location
- Details about the account
- Authorization form
How to Obtain a GSTIN?
Businesses must complete a registration process in order to receive a GSTIN:
- Eligibility: Companies must register for GST if their yearly revenue exceeds the designated threshold, which is presently INR 40 lakhs for the majority of states.
- Online registration: The GST portal (www.gst.gov.in) helps to complete the registration process online. To begin the registration procedure, businesses must supply their PAN, email address, and mobile number.
- Verification: Post-submission, an Application Reference Number (ARN) is generated, which is unique to each application after verification of the details provided on the GST portal.
- Document submission: Companies were required to submit these set documents on the GST portal within a stipulated time frame like proof of address, bank account number, and business registration documents.
- Approval: The GST portal authorizes the registration and provides the GSTIN following document verification.
How to doGST Number Verification?
In order to charge more and evade taxes under GST legislation, numerous businesses create fictitious and invalid GSTIN numbers.
Those service providers and traders who charge GST from their respective clients necessarily have to put their GSTIN number on an invoice. But if in doubt, turning to cross-check against assigned GSTIN may clarify the query.
For authentication of the GSTIN number, just follow the steps:
- Visit the https://www.gst.gov.in/, i.e., the GST Portal.
- The menu bar will have a "Search Taxpayer" option.
- Enter the specified captcha code and the GSTIN you wish to verify in the search bar.
- The following information will appear in front of you in a matter of seconds if the provided GSTIN is a legitimate firm that is registered for GST in accordance with the rules:
- GSTIN Status
- Date of Registration
- Business Structure Type: Business, sole proprietorship
- Taxpayer kind: SEZ unit, composition, and regular taxpayer
Compliance and Validity
Once an organization acquires GSTIN, certain GST laws need to be adhered to by the business.
- Return filling: The business is required to file regular GST returns which include the GSTR-1 (outward supplies), GSTR-3B (summary return), and GSTR-9 (annual return).
- Tax payments: The GSTIN holders shall duly discharge their tax liabilities in due time to prevent penalties and interest from arising.
- Updates and amendments: All changes in address, contact information, or constitution must be updated with the GST portal within a specified time.
- Tenure: GSTIN is valid for the lifetime of the company, so long as it continues its operations and complies with various provisions laid down under the GST Act. Cancellation or suspension may occur due to violations in adherence to statutory mandates.
Significance of GSTIN
The GSTIN is essential to the GST system and provides companies with a number of advantages:
- Legal status: GSTIN assures compliance with GST legislation and gives businesses legal stature. Businesses whose annual income crosses a certain threshold are mandated to enrol for GST and take a GSTIN.
- Input tax credit: Under GST a registered person having GSTIN is entitled to claim the input tax credit on the purchases. It reduces the overall tax burden and allowed them to deduct the tax paid on inputs from the tax payable on outputs.
- Interstate transactions: An organization dealing in interstate sale is necessarily required to obtain GSTIN. It guarantees smooth tax compliance across state borders and aids in tracking the flow of products.
- E-commerce websites: An online merchant must furnish their GSTIN to display their products on an e-commerce site. This ensures compliance with tax laws and helps authenticate dealer legitimacy.
Conclusion
A unique identification number that is essential to the GST system is the GSTIN. It gives companies legal status, facilitates easy tax compliance, and encourages openness in the taxing procedure. Businesses exceeding a certain turnover threshold must get a GSTIN, and maintaining the GSTIN's validity requires adherence to GST regulations. Businesses may successfully navigate the GST system and support the expansion of the Indian economy by comprehending the importance of GSTIN and abiding by compliance rules.
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