Goods and Services Tax, also known as GST, was introduced by the Government of India on 1 July 2017 to simplify the tax structure on various commodities. The aim of the GST is simple – one nation, one tax, one market, and replaces several central and state-levied taxes such as excise, VAT, and service tax.
Under the GST act, businesses and individuals have to register their business with the state authorities and obtain a unique 15-digit Goods & Services Tax Identification Number (GSTIN). Since its implementation, more than 8 million taxpayers have migrated from various taxation platforms to GST, which is now a simple platform for compliance & administration purposes.
In this blog, we will explore more about what GSTIN is and decode what the GSTIN number means.
What Is a GST Number?
GSTIN or GST Number is a 15-digit unique alphanumeric code associated with your firm or name once you have registered under the GST regime of India. Registration for the GSTIN is entirely free of cost and can be done online or offline in a few easy steps.
Decoding the 15-Digit GSTIN
Once your GST application is accepted, you will be assigned a GSTIN number. The structure of this number will be as follows:
- The first 2 digits are reserved for the state code as per the Indian Census. Indian states or union territories are assigned unique codes (01-35). For example, 07 is the state code for Delhi, while 27 is the code for Maharashtra
- The following 10 digits represent the PAN number of the business entity or the taxpayer.
- The thirteenth digit is the number of registrations done by the firm within the state using the same PAN number. It can be an alphanumeric figure (between 1-9 and then A-Z)
- The fourteenth digit is the alphabet ‘Z’
- The fifteenth digit will be a check code, which can be a number or an alphabet.
Since every GSTIN number follows this structure, it is easy for you to check the authenticity of the business. GSTIN is public information, and technology has made it easy to verify GSTIN, which is crucial before doing any business dealings. You can instantly validate a GSTIN number using the Razorpay Number Search & Verification Tool, which helps you verify the authenticity of a GST number online and for free.
Tip: You can find the different GSTINs associated with PAN using Razorpay’s GST search by PAN tool.
Why Do You Need a GST Number?
GSTIN number is mandatory for businesses to avail of various benefits under the GST regime. Businesses or individuals have to register with the GST council if their annual turnover exceeds Rs. 20 lakhs.
Meanwhile, for businesses, GSTIN is compulsory to provide any service or business transaction and will be used to claim refunds or file GST returns under recent regulations. This number is associated with the business entity and helps the government to track all the details about your business.
Tip: Before you start filing your GST returns, you can calculate GST liability under different tax slabs for your business with Razorpay’s GST Calculator
Benefits of a GST Number
The benefits of GSTIN are as follows:
- It helps in reducing tax evasion, fraud, duplication, identity theft, and other economic crimes.
- It helps in tracking transactions across States and Union Territories.
- It helps in improving the ease of doing business.
- It will provide a single point for all indirect tax-related compliances.
- Having GSTIN ensures businesses can operate in interstate sales without restrictions, improving the potential market for small and medium-sized businesses.
- Anyone with a GSTIN can take input credit on purchases and input services and make sure that your business is compliant with GST regulations, improving the GST rating of your firm.
How to Obtain A GSTIN?
To obtain a GSTIN number, you can follow the simple process mentioned below:
- Log in to the GST portal of India (services.gst.gov.in)
- Click on ‘New Registration’ tab
- Enter all the required details, which include name, number, email ID, and other details
- Verify the details using the OTP that will be shared on your mobile number or email
- Next, you will get an ARN (Application Reference Number) on your mobile or email.
- Note this down and fill out Part-B Application Form for GSTIN.
- Attach the documents as requested, which include proof of business, bank statements, residential proof, PAN Card, certificate of incorporation, partnership deed, and more
- Once this is done, submit the duly filled application form with all the documents attached. The verification process usually takes up to three working days, and you will receive communication from GST REG 06 once the application is approved.
Alternatively, you can register for GSTIN by visiting the nearest GST, Seva Kendra, and filling out the offline form with the duly requested documents.
GSTIN has replaced all state VAT laws and unique TIN numbers to become the unique identification number for the business. It acts as the legal recognition of the business entity and helps build trust among customers and business partners. Anyone with a GSTIN number can easily log in to the GST portal, file their details to get benefits, and take input credit on their purchases and services.
Thus, GSTIN helps to improve tax compliance for businesses and makes the process simpler and completely online, resulting in transparent transactions and enhancing the scope of business.