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GSTIN Number: What is Goods and Service Tax Identification Number? Format, and Example
Goods and Services Tax Identification Number (GSTIN) is a unique code that is important for Indian businesses since it serves as a key identifier under the GST regime. What is a GSTIN? How does the GST number format work and why is it important for your business? This article simplifies the GSTIN by providing a detailed overview tailored to common GST taxpayer questions and pain areas.
What is the GSTIN Number?
GSTIN number is a 15-character alphanumeric code assigned to each taxpayer registered under the GST regime. It is more than just a number. It is the identity of a company in the eyes of tax authorities, facilitating compliance, tax payments, and refunds easier under the GST system.
GSTIN Number Format and Example
Taxpayers must understand the format of the GSTIN number. The structure of the GSTIN number is systematic, with each character indicating specific information about the taxpayer.
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The first two characters represent the State code.
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The next ten characters are represented by the PAN of the taxpayer.
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The thirteenth character is represented by the number of registration in a State.
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The fourteenth character is ‘Z’ by default.
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The last character is a checksum value, used for error detection.
GSTIN number example: 27AAPFU0939F1ZV
Here ‘27’ indicates the State code for Maharashtra, ‘AAPFU0939F’ is the PAN of the taxpayer, ‘1’ signifies the number of GST registrations within the Maharashtra State, and ‘V’ is the checksum character.
Why is the GSTIN Number Important?
The GSTIN number is crucial for several reasons, particularly for businesses and taxpayers in India subject to the compliance under GST law. Here is why GSTIN number is so significant:
Requirement as per GST Law:
Businesses having a turnover of more than the threshold for GST registration, must obtain GSTIN mandatorily. Therefore, GSTIN number is a prerequisite for compliance with GST laws, facilitating businesses to conduct taxable sales and provide services within India.
Supports GST Filing and Compliance:
A GSTIN number is essential for filing GST returns, discharging GST dues, and receiving input tax credits. Businesses without a valid GSTIN won’t be able to meet the obligations under GST, which may result in legal consequences and penalties.
Enables Input Tax Credit (ITC):
A GSTIN number is required for efficient flow of Input Tax Credits (ITC) throughout the supply chain. Businesses will be able to claim ITC only if they and their suppliers hold valid GSTINs and the compliance requirements are met under GST. This mechanism prevents tax on tax, thereby lowering the cost of goods and services.
Acts as a Proof of Business Registration:
A GSTIN number acts as a proof of registration of the business. It is frequently used in business contracts, invoices, and dealing with other businesses, ensuring the transactions are undertaken with the registered entities.
Enhances Credibility of the Business:
A GSTIN number is required to be displayed on invoices and other official documents. This enhances the credibility of the business. Moreover, an assurance is provided to the clients and partners about the company’s tax compliance and credibility, which is essential for the growth of business and partnerships.
Required for Generating E-Way Bill:
An e-way bill is required for the transportation of goods valued at more than a specified amount. A GSTIN number is required to generate a valid e-way bill. This makes the GSTIN number an indispensable part of the businesses involved in the movement of goods.
Streamlines Tax Administration Process:
The structure of the GSTIN involving State code and PAN of the taxpayer supports the efficient administration of the GST. It helps tax authorities manage state-wise data, ensuring accurate allocation of tax monitoring the compliance under GST.
Useful for Claiming GST Refunds:
Businesses and exporters must have a valid GSTIN number to become eligible for refund claim. The GSTIN helps in the verification of refund claims, ensuring timely credit of refunds.
How to Obtain a GSTIN Number?
To comply with the GST regulations in India, businesses must get a GSTIN number. Here is a simplified process for obtaining a GSTIN:
Step 1: Eligibility Check: Before making an application for GSTIN, ensure that the GST registration threshold is met by the business, which varies depending on the type of supply and state. Businesses with annual turnover above the specified threshold must register and obtain GSTIN.
Step 2: Gather Necessary Information:
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Prepare all the necessary documents, which generally includes:
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PAN of the business or the proprietor
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Proof of business registration or business incorporation certificate
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Identity and address proof of promoters/directors
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Address proof of the location of the business
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Bank statement/canceled cheque
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Digital signature of authorized signatories
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Step 3: Visit the GST Portal: Go to the official GST portal at www.gst.gov.in and navigate on the ‘Services’ tab > ‘Registration’ > ‘New Registration’.
Step 4: Fill in the Part-A Form: Fill Part-A form by providing the basic information such as legal name, PAN, email address, and phone number. Upon successful submission of Part-A form a Temporary Registration Number (TRN) will be generated and sent via text message and email.
Step 5: Complete Part-B Form: Use the TRN received after Part-A form submission and login to the GST portal to complete the Part-B form. Fill the details as asked and upload the required documents for the type of business.
Step 6: Submit the Application with DSC/E-Signature: Complete the declaration and submit the application form. Use digital signature certificate (DSC) for businesses and LLPs, or e-signature/EVC for all other entities. This step is essential for authentication of the application process.
Step 7: ARN Generation: Upon successful completion of the registration process, an Application Reference Number (ARN) will be generated and sent via message and email to the applicant. The ARN can be used to track the status of the application.
Step 8: GSTIN Issuance: The GST officer will evaluate the application and the documents. If everything is correct, a GSTIN will be issued to the applicant. The registration certificate can be obtained from the GST portal.
Identifying Fake GSTIN Number
Determining the authenticity of the GSTIN is important for businesses to ensure they are dealing with genuine entities. Verifying a GSTIN’s validity is simple using various online tools. One such tool is also offered by TaxBuddy: GST Number Search by Name, which is a simple and easy tool to identify the fake GST numbers.
Alternatively, here's how you can check if a GSTIN is genuine through the GST portal:
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Visit the Official GST Portal: Visit at https://www.gst.gov.in/.
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Navigate to 'Search Taxpayer': Click on the ‘Search Taxpayer’ option, followed by ‘Search by GSTIN/UIN’.
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Enter the GSTIN: Type in the GSTIN number of the business you wish to verify in the provided field.
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Submit Your Query: Complete the captcha verification and click ‘Submit’.
A genuine GSTIN will return details such as the business's legal name, registration date, and business address. Alternatively, a fake GSTIN will yield no results. This simple process can protect your business from potential frauds and ensure compliance with GST regulations.
GSTIN vs GSTN
The difference between GSTIN and GSTN is as follows:
Transport
Sr No | Goods and Service Tax Identification Number (GSTIN) | Goods and Service Tax Network (GSTN) |
|---|---|---|
1 | GSTIN number is a unique 15-digit alphanumeric code assigned to each registered taxpayer under the GST regime. | A non-profit organization formed to handle the GST portal's entire IT system, including registration, return filing, and payment processing. |
2 | GSTIN number is used by businesses for filing GST returns and claiming ITC. | GSTN is a backbone of India’s GST system, which ensures smooth and transparent tax administration. |
3 | GSTIN number consists of a specific format like State code, PAN of the taxpayer, and other details. | GSTN is the name of the organization that manages the GST portal. |
4 | The GSTIN number is used by businesses for filing GST returns, issuing invoices, and claiming ITC. | GSTN is used by taxpayers, tax authorities, and other stakeholders to access the GST-related services online. |
Frequently asked questions
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What is a GSTIN number?
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Goods and Service Tax Identification Number (GSTIN) is a unique 15-digit number provided to each registered taxpayer under GST. It is used to identify the taxpayer’s business identity and ensure compliance with GST laws.
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How to obtain a GSTIN?
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The GSTIN number can be obtained by registering the business on the GST portal. The registration requires providing all the information related to PAN, business address and details, and other required information.
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Are all businesses required to obtain a GSTIN number?
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Yes. GSTIN number is mandatory for businesses whose turnover is more than the threshold limit for GST registration, which is INR 20 Lakhs for service providers and INR 40 Lakhs for goods suppliers.
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Can a taxpayer have more than one GSTIN number?
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Yes. If a taxpayer operates business from multiple states or has multiple business verticals within the same state, a separate GSTIN number can be obtained for each business.
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Is there a fee to obtain a GSTIN number?
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The GSTIN number can be obtained from the GST department free of charge. There is no cost to apply for the GST registration.
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What is the consequence of not applying for GSTIN number even after becoming eligible?
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If a GSTIN number is not obtained even after crossing the threshold limit, it can result in penalties, including fines and a possibility of business closure demand by the GST department, until the GST registration requirements are complied with.
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How long does it take to receive the GSTIN number after applying for the same?
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After submitting the application along with the necessary documents, it generally takes around 7 working days to receive the GSTIN number, provided there are no issues in the application.
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Does an online seller have to obtain a GSTIN?
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Yes. An online seller, whether selling online through their website or through an aggregator platform, needs to obtain GSTIN, if the turnover exceeds the prescribed threshold limit.
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Can a GSTIN be canceled?
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Yes. If the taxpayer wishes to cancel the GST registration, a cancellation application can be filed through the GST portal. The GST number is often surrendered due to the closure of the business, transfer of business, or if the turnover falls below the threshold limit.
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What to do if the GSTIN details are incorrect?
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If the GSTIN details are incorrect, an application for amendment can be filed through the GST portal. Changes like mobile number, business address, and email can be updated without much challenge.
Prachi Jain
Chartered Accountant
Prachi Jain is a Chartered Accountant with a passion for simplifying finance and tax-related matters through her insightful and informative blogs. With a background in finance and a deep understanding of tax regulations, Prachi has established herself as a trusted source of financial wisdom. Prachi is committed to empowering her readers with the knowledge they need to make informed financial decisions. Her expertise and dedication shine through in every blog post, helping her audience navigate the intricacies of finance and taxes with confidence. Follow Prachi Jain's blog for practical insights and guidance on managing your finances effectively.
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