What is GSTIN?

Goods and Services Tax Identification Number in short GSTIN, is a special 15 digit code given to every taxpayer including suppliers, dealers and businesses registered under the GST system. Before GST, dealers under state VAT laws received a unique Taxpayer Identification Number from their state tax authorities. With the introduction of GST, GSTIN has replaced the old TIN system. When businesses register under GST they receive a unique ID called GSTIN. This process is free of charge.

What Is a GSTIN Number?

GSTIN, short for Goods & Services Tax Identification Number is a 15 digit unique identifier associated with your business or personal name upon registration under India's GST system. This number is comprised of state, PAN and entity based components. Once you have your GSTIN you can use it for various GST related tasks such as filing returns, claiming input tax credits and paying taxes. And importantly obtaining a GSTIN does not incur any charges.

Format and Structure of GSTIN

Every taxpayer under the GST regime is assigned a unique 15 digit Goods and Services Taxpayer Identification Number (GSTIN), which is derived from the state and PAN details. Here's how the GSTIN is structured:

• Full Form of GSTIN: Goods and Services Tax Identification Number
• First 2 Digits: These represent the state code where the taxpayer is registered.
• Next 10 Digits: These digits correspond to the Permanent Account Number (PAN) of the individual or business entity.
• 13 Digit: It indicates the number of registrations made by the taxpayer within a state under the same PAN.
• Fourteenth Digit: This is always the letter "Z" by default.
• Last Digit: This serves as a check code to identify errors and can be either a number or an alphabet.

This format ensures that each taxpayer has a unique ID for GST, making tax administration more efficient.

GST Number Example

If a legal entity or business firm holds a single registration in a specific state, the 13th digit of its GSTIN will be designated as "1". Subsequently, if the same entity obtains a second registration within the same state the 13th digit of the GSTIN will be assigned as "2". 

This pattern continues with the 13th digit increasing sequentially to represent the number of registrations within the state. When the entity has 11 registrations in the same state the letter "B" will be assigned as the 13th digit. Similarly, a legal entity can register up to 35 different business branches or sectors within a state using this system.

How to Apply for GSTIN?

The GST enrolment process involves the application process for obtaining GSTIN. Once approved by the GST officer you will receive your GSTIN. To apply for GSTIN, follow these steps:

Step 1:  Access the official Goods and Services Tax website at https://services.gst.gov.in/services/quicklinks/registration

Step 2: Locate and select the 'New Registration' option on the website.

Step 3: Fill in the necessary details such as your mobile number, PAN, email address, legal name of the business, state and district of the business, etc.

Step 4: Upon submitting the required information an OTP will be sent to the mobile number provided. Enter OTP to verify your mobile number.

Step 5: After successful verification you will receive an Application Reference Number (ARN) on your registered mobile number. This ARN serves as a unique identifier for your GST application.

After receiving the ARN, proceed to complete Part B of the application. For this ensure you have the following documents ready:

• Authorization form
• Constitution of the taxpayer 
• Proof of the business’s location
• Bank account details (including a canceled cheque)
• Photographs of the business owner/partners/directors/managers

The GST officer will verify the documents provided within three business days. If any additional information is required the officer may request it using Form GST-REG-03 within seven working days.

Upon successful verification of the submitted documents and compliance with GST regulations, a Certificate of Registration will be issued to you. This certificate officially recognizes your business as a GST registered entity and provides you with your GSTIN. Ensure that all provided information is accurate and up to date to facilitate a smooth enrolment into the GST system and avoid delays in the application process.

How to Verify GSTIN?

Discovering fake GSTIN numbers is a critical concern as they enable firms to evade taxes and potentially overcharge clients. To ensure the legitimacy of a GSTIN and prevent such fraudulent activities service providers must print their GSTIN on all invoices issued. If there are doubts about the authenticity of a GSTIN verification can be done through the official GST Portal using the following steps:

Step 1: Access the official Goods and Services Tax Portal .

Step 2: Locate and click on the 'Search Taxpayer' option available on the menu bar of the GST Portal.

Step 3: In the search box provided enter the GSTIN that you wish to verify.

Step 4: Enter the captcha code displayed on the screen to confirm that you are a legitimate user.

Upon completion of these steps the portal will provide the following information if the entered GSTIN corresponds to a legitimate GST registered business:   

• GSTIN Status: This indicates whether the GSTIN provided is currently active or inactive.
• Date of Registration: The date on which the business was registered under the Goods and Services Tax regime.
• Business Structure: Information regarding the type of business structure such as Company, sole proprietorship, partnership etc.
• Taxpayer Type: Specifies the taxpayer type which could include Composition, Special Economic Zone unit, regular taxpayer etc.

If the provided GSTIN is incorrect or invalid the website will display an error notice indicating that the entered GSTIN does not correspond to any registered business.

By utilizing this verification process businesses can ensure the authenticity of GSTINs thereby promoting transparency and compliance with tax regulations while safeguarding against fraudulent practices.

Benefits of Having GSTIN

The advantages of having a GSTIN are mentioned below:

1.  Holding a valid GSTIN legally recognizes a business as a supplier of goods and services. 
2.  Businesses with GSTIN can offer input tax credits to their customers making them more competitive than smaller firms. 
3. Registration with GSTIN allows businesses to expand their reach by participating in e-commerce platforms or establishing their own online presence. This broader market access facilitates reaching a larger customer base and tapping into new revenue streams.
4. Individuals and businesses with a valid GSTIN can claim input tax credits on their purchases. 
5. Having a GSTIN enables businesses to engage in interstate sales seamlessly. Interstate transactions require GST compliance and holding a GSTIN ensures that businesses can conduct interstate trade without encountering limitations or regulatory hurdles.
By leveraging the benefits of GSTIN businesses can not only ensure compliance with tax laws but also enhance their competitiveness, market reach and operational efficiency in the dynamic business landscape.

Difference Between GSTIN and GSTN

GSTIN is a unique 15 character alphanumeric code assigned to every taxpayer registered under the GST regime in India. It serves as a standardized identification number for businesses across the country.

Goods and Services Tax Network (GSTN) is an organization responsible for managing the information technology infrastructure of the official GST portal. It handles various aspects of GST implementation, including registration, filing of returns and processing of tax payments.

With the introduction of GSTIN the new tax system in India has become more transparent and efficient. It enables seamless tracking of tax transactions and compliance activities across the country.

Customers and other stakeholders can verify the legitimacy of a business entity by conducting GSTIN checks. This helps in ensuring transparency and trust in business transactions.

GSTIN has replaced individual Taxpayer Identification Numbers (TINs) and all state VAT laws to become the single identification number for businesses. It serves as the legal recognition of a business entity, boosting trust among customers and partners. Possessing a GSTIN allows businesses to easily access the GST portal where they can file their details to avail of benefits and claim input tax credits on their purchases and services.

GSTIN enhances tax compliance for businesses by simplifying processes and making them entirely online. This facilitates transparent transactions and broadens the scope of business operations.