All You Need to Know About Your GSTIN Verification

Table of Contents

1. What Is A GSTIN Number and What Are Its Elements?
2. What Are the Types of GST?
   • Central Goods and Services Tax (CGST)
   • State Goods and Services Tax (SGST)
   • Integrated Goods and Services Tax (IGST)
   • Union Territory Goods and Services Tax (UTGST)
3. Steps To GST Verification of Business on GST Portal
   • 6 steps To GST Verification of Business on GST Portal
4. Why Is the GSTIN Number Verified?
   • 4 reasons why GSTIN Number is Verified
5. How Is the GSTIN Number Verified
   • GSTIN Structure Validation
   • Database Lookup
   • Matching and Verification
   • Data Retrieval and Presentation
   • Error Handling
6. Repurcussions Of Using Unverified GSTIN Number
   • Loss of Input Tax Credit (ITC)
   • Financial Penalties and Interest
   • Reputational Damage
   • Supply Chain Disruptions
   • Legal Issues
   • Beyond the Immediate Consequences
7. The Importance of Proactive Verification

What Is A GSTIN Number and What Are Its Elements?

What is gstin number is, GSTIN manifests as the 15-digit code: 27XXXXXXXXXX123Z. The state code finds representation in the initial two digits; subsequently, comprising ten figures, is the PAN of business. The thirteenth digit denotes how many registrations under a particular PAN exist within that specific state, ultimately culminating with an identifying check digit at last position, one which serves to verify validity and prevent any potential errors or frauds.

You can verify the GSTIN and view details of the registered taxpayer through the GST portal. The portal also provides information on UN Bodies, Embassies, Government Offices or other notified persons; in their case a Unique Identification Number (UIN) substitutes for a GSTIN.

What Are the Types of GST?

This blog primarily concentrates on what is GSTIN number, GST number check and GST verification. However, it also provides a succinct overview of various GST types to cultivate comprehensive understanding. The following elucidates the principal categories of India's Goods and Services Taxes:

1. Central Goods and Services Tax (CGST): The central government levies this tax on the supply of goods and services within a state and this signifies their portion of the overall GST imposed on any transaction.
2. State Goods and Services Tax (SGST): The state government levies this tax on the supply of goods and services within its jurisdiction and it symbolizes their portion of the total GST imposed in a transaction.
3. Integrated Goods and Services Tax (IGST): Inter-state transactions of goods and services bear the application of IGST. This levy comprises the entire amount, inclusive of shares assigned to both central and state governments; however, a division eventually takes place between these two entities--a process dictated by factors linked with the destination state.
4. Union Territory Goods and Services Tax (UTGST): The UT administration imposes a tax, comparable to SGST. It applies specifically to the supply of goods and services within Union Territories (UTs).

Steps To GST Verification of Business on GST Portal

1. Web Browser: Access the Goods and Services Tax Department's official website at https://www.gst.gov.in/.
2. "Search Taxpayer" Option Location: Explore the GST portal's homepage for a section labelled "Search Taxpayer." You might spot this segment in an obvious position or hidden within a dropdown menu, depending on the website layout.
3. Choose "Search by GSTIN" (or "Search by UIN"): Typically, the "Search Taxpayer" section offers two options: "Search by GSTIN," and "Search by PAN." After locating this section, you are presented with these choices.
4. If you possess the business's 15-digit GST Identification Number (GSTIN), select "Search by GSTIN".

Choose "Search by PAN" if you possess the business's Permanent Account Number (PAN) only. Yet, bear in mind opting for a search based on PAN will yield an array of all GST registrations linked to that specific PAN. Hence pinpointing precise details about a particular business may not remain within your grasp.

Carefully enter your target business's complete 15-digit GSTIN in the designated GST verification field, followed by a colon and the acronym 'CAPTCHA'. Then provide either the GSTIN or UIN of your target business; use a semi-colon to separate these two entries--and make sure they are all entered with precision.

1. Initiate the Search: Enter the GSTIN or UIN and CAPTCHA code; then, click on "Search" to begin your search.
2. Interpreting the Results: The system will process your search query. Here are the two possible outcomes-

If the entered GSTIN for gst no check is valid and belongs to a registered taxpayer, the portal will display an extensive business profile. This typically incorporates following information:

• Legal name of the business
• Jurisdiction (state where the business is registered)
• GST registration date
• Type of taxpayer (regular, composition, etc.)
• Current status of the GSTIN (active, cancelled, etc.)
• Details of GST returns filed by the business (if applicable)

If the entered GSTIN is incorrect or does not belong to a registered taxpayer an error message will promptly indicate its invalidity. Please note this failed GST verification is displayed as 'GSTIN Invalid.'

Why Is the GSTIN Number Verified?

Not only is it advisable, but critical for several reasons to have GST number check/verification of a business you are considering transacting with. Let's delve deeper into the benefits of GST verification:

1. Ensuring Legitimacy and Avoiding Fraud: Unfortunately, instances of businesses operating without proper GST registration persist in today's business landscape. Confirm your dealings with a legitimate entity compliant to tax regulations by the gst no check; this measure protects you from unknowingly associating with fraudulent businesses that could either disappear or instigate legal issues down the line.
2. The GST regime empowers businesses to strategically utilize the Input Tax Credit (ITC): a tool that offsets their own GST liability by claiming it on taxes paid for purchases from registered suppliers. Yet, in this process of ITC claim--a crucial requirement exists; these purchases must stem from GST-registered suppliers.
3. Before finalizing a transaction, ensure that you verify your supplier's GSTIN. This step guarantees valid documentation to bolster your ITC claims. Neglecting this verification and purchasing from an unregistered supplier may hinder you from claiming ITC on the GST paid; consequently, it could escalate your overall tax burden.
4. Minimizing Risks and Penalties: Should you conduct business transactions with an unregistered entity and base your ITC claim on counterfeit invoices; the tax authorities may penalize you and impose interest charges. By verifying the GSTIN - a step that ensures compliance with GST regulations - such risks can be avoided and thus, safeguarding your interests in legal terms.

 Evidencing a commitment to ethical practices can not only boost your reputation, but also amplify the perception of your brand image. Integrate GST verification tools into your vendor onboarding process as this strategic step will enable you to automate the verification of GSTINs seamlessly - a measure that conserves valuable time and resources while streamlining business operations.

How Is the GSTIN Number Verified?

The GST portal, featuring a user-friendly interface, conducts an intricate series of background checks to guarantee the accuracy of GST verification. Let's delineate the probable sequence that occurs when you input your GSTIN on this portal:

The portal's search results page presents to you the retrieved data in a clear, concise format: this is how it operates.

1. GSTIN Structure Validation: The system initiates by validating the format of the GSTIN entered; it ensures that a 15-digit alphanumeric code is in place: specifically, it confirms not only for correct digit count – but also verifies these digits to be within an anticipated character set – comprised of numbers and certain alphabets.
2. Database Lookup: The system, assuming a valid GSTIN format, initiates a lookup in the central database of the GST Department; this particular repository contains information about all taxpayers registered under the GST regime.
3. Matching and Verification: The system compares the entered GSTIN against records in the database; it searches for a matching record, utilizing the complete 15-digit code.
4. Data Retrieval and Presentation: Should the system find a match; it will retrieve pertinent details linked to the GSTIN from our database; such information could encompass:
   • Legal name of the business
   • GST registration date
   • Type of taxpayer (regular, composition, etc.)
   • Current status of the GSTIN (active, cancelled, etc.)
   • Details of GST return filings (if applicable)
      
5. Error Handling: Upon encountering a non-matching GSTIN in the database, the system actively triggers an error message to assert its invalidity. The potential causes might include: an erroneously entered number, a typo, or even non-existence of the GSTIN itself.

Repercussions Of Using Unverified GSTIN Number

The verification of a business's GSTIN before transaction entry safeguards your enterprise from myriad potential issues. Let's examine more closely the significant repercussions you could encounter when dealing with an unverified GSTIN:

1. Loss of Input Tax Credit (ITC): The ability to claim Input Tax Credit (ITC) on taxes paid for purchases from registered suppliers emerges as a significant benefit of GST. This credit serves in strategic fashion to offset your own GST liability, thus deflating the balloon of your overall tax burden.  However, claiming the Input Tax Credit (ITC) necessitates a crucial requirement: purchases must originate from suppliers registered under GST. Should you transact with an unregistered GST business and claim ITC on that particular purchase. During audits, tax authorities retain the power to disallow your credit. Consequently, this could engender substantial tax liability for your enterprise.
2. Financial Penalties and Interest: Not complying with GST regulations can draw penalties and interest charges from the tax department. Should you be caught claiming ITC based on transactions with unregistered businesses, you might face not only penalties for both the disallowed ITC, but also any associated interest on your imposed tax amount. The severity of the offense and tax authorities' discretion can vary the penalty amount: in fact, repeated non-compliance may even trigger prosecution.
3. Reputational Damage: Your reputation may suffer a shadow when you associate with unregistered businesses: it could provoke questions about your commitment to ethical business conduct and due diligence practices. Consequently, this association might harm relationships--notably those with potential customers, investors, and other stakeholders.
4. Supply Chain Disruptions: Should you discover that a supplier with whom you transact is unregistered, the potential for disruption in your supply chain becomes evident: authorities could seize their goods. This action may result in delays--or even shortages--within your inventory; consequently, finding alternative suppliers might become an urgent necessity. Such scrambling to maintain business operations could potentially instigate customer dissatisfaction.
5. Legal Issues: In extreme cases, grappling with unregistered businesses potentially precipitates legal entanglements. Should the unregistered business engage in any fraudulent activities--you could find yourself embroiled in legal proceedings.
6. Beyond the Immediate Consequences: Using an unverified GSTIN incurs repercussions that surpass immediate financial penalties: your reputation suffers damage, and potential disruptions to business operations can yield long-lasting negative consequences.

The Importance of Proactive Verification

Safeguard your business from potential pitfalls: take the time to verify a business's GSTIN before finalizing any transaction. This simple step can not only save you substantial financial trouble, but also protect and even enhance your reputation. Moreover, it guarantees an unobstructed supply chain operation.