Goods and services tax or GST, is a kind of indirect tax. It is imposed on every goods or services we buy. The sellers collect this tax from consumers and pay it to the government. Hence, the consumers indirectly pay this tax to the government, through sellers. GST was introduced on 1st July 2017, after facing a lot of opposition. Prior to its introduction there were several taxes which were burdened on all stages of supply of goods and due which at the end the consumers were required to pay a high amount of tax. Hence, in order to curb this burden and multiple staged tax imposition, the government took a bold step by implementing GST, as ONE NATION, ONE TAX. Now GSTIN or GST Number is mandatory for all those who cross the GST limit. Now GST Registration becomes compulsory for all those who come under its threshold limit.
What do you mean by GSTIN?
Before understanding what is GSTIN, let us understand GST Registration. GST Registration is filling an online application form (GST-Reg-01) by taxpayers to GST authorities, through the GST portal with an aim to receive an unique GST No. or GST Identification Number (GSTIN). GSTIN is made of 15 digits. The GST Portal (https://www.gst.gov.in/)is an online GST Network made to ease the communication between Government and Consumers. The one who is successful in obtaining the GSTIN becomes a recognized supplier of goods and is permitted to collect tax on behalf of the government. It must also be kept in mind that, until and unless GSTIN is obtained, Suppliers have no right to collect tax from the customers. Every supplier has a different GSTIN.
Why do you Require GSTIN or GST Number?
Due to the following reasons one needs to obtain GSTIN or GST Number in India:
Avoid Penalty
Under the GST laws various types of penalties have been prescribed out of which one is regarding those who did not have GSTIN or GST Number even though they fall under the GST threshold limit. Businesses who have turnover of more than 40 lakh have to register for GST. They also have to get a GSTIN. In case they run their business without GSTIN, they can be punished.
Claim Input Tax Credit (ITC)
Let us understand ITC with an example. If you buy or purchase something for one lakh rupees and pay Rs 1,800 as GST. Then if you sell it for Rs 2 lakh, you obviously receive Rs 36,000 as GST from buyers. Now it is your duty to pay the GST to the government. However, if you claim ITC, then you have to forward only Rs 1,800 to the Government. ITC benefits can only be received if you have the GSTIN.
Helpful for customers
The GSTIN should be mentioned on every bill of goods and services sold. This number can be traced by the customers. It helps customers to know whether the money they are paying as GST are actually forwarded to the Government or not. As customers are also aware these days it is becoming mandatory to take this number for the businesses.
Why is it important to Verify GSTIN or GST Number?
Many sellers or suppliers do not prefer to pay taxes to the Government. Therefore, they do not register GST and hence do not receive GSTIN. However, they cheat others by making and using a false GSTIN. They collect taxes from the customers but do not pay it to the government. Customers too, mostly do not track if the GSTIN is genuine or not. Hence, it is very essential to verify GSTIN. Verification protects consumers from being cheated by the suppliers.
Process of Verifying GSTIN or GST Number
If real GSTIN is searched, then it will show all valid details of the supplier or taxpayer. If the GSTIN is fake, then obviously no details will be shown. By this way, you can know if the supplier is a regular taxpayer or not. This is just a 4 step simple process:
- Open official GST Portal www.gst.gov.in
- Click on search taxpayer tab
- Select search by GSTIN
- Enter your GSTIN and click search.
Documents Required to Verify the GSTIN or GST Number
Some of the key documents which are mandatory to verify the GSTIN or GST Number are:
- Pan-card
- Adhar card
- Photograph
- Details of Bank account
- Address proof
- Photographs of all partners of the firm
- Signatures of all partners of the firm
- Partnership deed (copy)
- Pan-card of authorized signatory
- Adhar card of authorized signatory
- Photographs and signatures of all directors
- Certificate of Incorporation
GSTIN Search and GST Number Verification Tool
GSTIN search and GST Number verification tool is an easy way to find fake GSTIN users. Online services are very beneficial nowadays. If anyone wants to verify a GSTIN, they can by just one click. He/she is just required to follow the above given procedure of verification. This easy method is called a verification tool.
How to Utilize the GSTIN Search and Verification Tool?
The verification tool is a great method to find fake GSTIN users. However, it is important to know how to use it. Everyone must make the correct use of the GSTIN. However, there are many who make fake GSTIN to gain extra money from consumers in the name of tax. This is called wrongful gain. This is called GST theft. Therefore, with the help of the GSTIN search and Verification tool, we can recognize fake GSTIN users. If after making a search in the GST portal, details of supplier is shown then the user has genuine GSTIN. By using this tool consumers can be saved from cheating. This helps them save their money from reaching the wrong pockets.
The consumers who are victims of this GST theft, can make a complaint before the GST grievance redressal platform. They can seek justice by filing a complaint.
Key Types of Misuses of the GSTIN or GST Number
Some of the key type of misuses of the GSTIN or GST Number are:
- Creating fake GSTIN- There are many suppliers who make fake GSTIN. By this they collect taxes from consumers but do not give to the government. They use that money for their personal use.
- Stealing PAN( Permanent Account Number)– PAN is the most important thing required to fill the form for GST Registration. Without PAN, you cannot obtain GSTIN. However, there are some people who steal the PAN of another business or person. And they use that PAN to secure a GSTIN. This method is illegal and leads to punishment.
- Pretend to be a regular Taxpayer– People make fake GSTIN, to pretend that they are regular taxpayers when they are not. They conceal their fake identity and gain money, in the name of GST from people.
- Take benefits of ITC- ITC, which is already explained earlier, helps to reduce GST. People create fake GSTIN and take the benefits of ITC, when they are not supposed to.
Structure of the GSTIN or GST Number
GSTIN consists of a total 15 numbers. Its structure is given below:
- First 2 digits are the code of the state. For eg. State code for Maharashtra is 27
- Next 10 digits are PAN of the supplier or taxpayer
- Next digit i.e.13th shows the number of registration taxpayers have within a state. If he/she has one registration, then the 13th digit is 1. If he/she has 5 registrations then the 13th digit is 5.
- The 14th digit is Z. This is the same for all GSTIN.
- Last one can be a digit or an alphabet. It is called the check code. It helps to find errors.
How to Apply for GSTIN or GST Number in India?
Follow the steps given below in order to get GSTIN or GST Number:
- Log in to the GST Portal (https://www.gst.gov.in/)
- Go to services and Click on Registration and New Registration
- Now Registration form will be opened before you. You have to fill in all details such as name, PAN, email ID, contact number, business etc.
- Now you will be sent a one time password (OTP). This can be sent on contact number or email ID.
- After filling the OTP, Application Reference Number (ARN) will be sent to you.
- After filling the ARN, upload all documents which are asked.
- Now it will take 3 working days to see if your application is genuine. If additional documents are required by the verifying officer, then he/she will ask. You have to provide them within 7 working days.
- Now the GST portal can accept or reject the application. If the application is accepted then GSTIN will be received by you.
Conclusion
Hence, GST is the most significant topic of today, which is affecting everyone, be it a common man or a wealthy seller, as it is imposed on almost each and every product and services which we render or buy. Therefore, it is very important that we the citizens of India are well aware of what the GST laws are. The paramount thing we can’t be ignorant of is being able to differentiate between who is permitted to take GST on government’s behalf and who is not. As nowadays, it has become a dirty business wherein wealthy sellers mislead innocent consumers to gain profits by acting as a regular taxpayer, hence concealing the reality. GST registration is the one and only way of creating transparency between sellers and buyers hence increasing trust between them. Therefore, it is the duty of all citizens to know about GST Registration and genuine GSTIN or GST Number.
