The Goods and Services Tax (GST) affects companies of all kinds and has grown to be a major component of India’s economic structure. With the replacement of multiple taxes, including VAT, excise duty, and service tax, the GST went into effect in July 2017 and completely changed India’s indirect tax structure. The GST system is straightforward and uniform, but in order to prevent fraud, false tax claims, and business malpractices, compliance—especially GST verification is crucial.
In this guide we discuss on what is GST and GSTIN? , GST Structure in India, Why GST Verification is Crucial? And How to Verify GSTIN Online. Besides of this know about the Benefits of GSTIN Verification, what Tools and Platforms for GSTIN Verification used, Common Errors and How to Correct Them, GST in India: Statistics and Economic Impact, Case Study like How GSTIN Verification Prevented a Major Fraud and Conclusion on GST Verification & Compliance.
What is GST and GSTIN?
The GST, or goods and services tax, is a tax imposed on the sale of products and services that is based on consumption. But ultimately, it is the customer who bears the cost of the tax.
GSTIN: The Goods and Services Tax Identification Number (GSTIN), a unique 15-digit identification number, is issued to each registered taxpayer under the GST system. This number is required for businesses that meet the GST registration threshold, which varies based on annual turnover and business type.
Structure of GSTIN:
- The first two digits represent the state code, following the Indian Census code for states.
- The next ten digits represent the PAN (Permanent Account Number) of the business.
- The thirteenth digit is based on the number of registrations made by the business in that state.
- The fourteenth digit is usually Z.
- 5. To detect errors, the fifteenth digit is used as a check code.
This system ensures transparency and tracks the flow of goods and services in the Indian economy.
Why GST Verification is Crucial
Fraud Prevention
Fraudulent businesses can generate fake invoices and evade taxes by using invalid GSTINs. GST verification helps detect such cases early by ensuring that the GSTIN number provided is valid, legitimate, and linked to a credible business entity.
Input Tax Credit (ITC) Claims
The Input Tax Credit (ITC) is a mechanism under GST where businesses can claim credit for the tax paid on purchases. However, this credit can only be claimed if the GSTIN of the seller is valid and their tax filings are accurate.
Business Credibility
A verified GSTIN boosts a company’s credibility among its stakeholders, including customers, suppliers, and financial institutions. It shows that the business complies with tax laws and maintains proper financial records.
Compliance with Regulatory Requirements
Ensuring that a GSTIN is accurate and valid is part of a business’s legal obligation. This verification process helps companies comply with Indian tax laws, reducing the risk of penalties or legal repercussions.
GST Structure in India
Types of GST
India follows a dual GST model, meaning that both the Central and State Governments levy tax simultaneously on a single transaction of supply. The different types of GST are:
- CGST: Central Goods and Services Tax is collected by the central government on intra-state sales.
- SGST: State Goods and Services Tax is collected by the state government on intra-state sales.
- IGST: Integrated Goods and Services Tax is levied on inter-state sales and is collected by the central government.
- UTGST: The union territory government collects the goods and services tax on sales within the union area.
GST Slabs in India
India has multiple GST tax slabs: 5%, 12%, 18%, and 28%, depending on the type of goods or services being provided. For example:
- Essential items such as food are taxed at a lower rate (5%).
- High-end vehicles and other luxury goods are on the highest slab (28%).
GST Threshold Limits:
| Category | Threshold Limit (Annual Turnover) |
| Goods Supply (Normal) | INR 40 Lakhs |
| Services Supply (Normal) | INR 20 Lakhs |
| Special Category States | INR 10 Lakhs |
How to Verify GSTIN Online
Verifying GSTIN online is a simple process that can be done through the government portal or third-party tools. Here are the steps:
- Visit the Official GST Portal (https://www.gst.gov.in/).
- Go to the “Search Taxpayer” option.
- Enter the GSTIN number you wish to verify.
- Click on Search.
- The portal will display the details of the taxpayer, such as their legal name, registration status, and business location.
Benefits of GSTIN Verification
Enhanced Business Trust:
Establishing confidence is facilitated by confirming your business partners’ GSTIN. Businesses that uphold transparency are more likely to interact with suppliers and customers.
Fraud Detection:
GSTIN verification allows businesses to identify fake or invalid taxpayers, preventing fraudulent transactions.
Correct ITC Claims:
Businesses can only claim ITC on valid transactions. Ensuring that the GSTIN is correct prevents the business from losing out on potential ITC claims.
Increased Compliance:
It simplifies compliance with GST regulations by ensuring the authenticity of each transaction.
Common Errors and How to Correct Them
1. Incorrect GSTIN on Invoices
One of the most common mistakes businesses make is entering incorrect GSTINs on their invoices. This can lead to denial of ITC or penalties for non-compliance.
How to Fix:
- Whenever an invoice is issued, make sure the GSTIN is correct.
- Use automated invoicing software that pulls verified GSTIN information.
2. Mismatch Between PAN and GSTIN
If the PAN does not match the GSTIN during registration, the system may flag it as invalid.
How to Fix:
- Ensure the PAN details entered are accurate.
- Double-check the GSTIN structure, especially the middle 10 digits that correspond to the PAN.
3. Failure to Update Business Changes
Changes in business structure or ownership must be updated in the GST registration details.
How to Fix:
• Modify your GST registration information by going to the “Amendment of Registration” section of the GST portal.
GST in India: Statistics and Economic Impact
Since its introduction in 2017, GST has had a profound impact on India’s economy. It has decreased the cascading effect of many taxes, streamlined the tax structure, and improved transparency.
Key Statistics:
- GST Collection: The total GST collection in India has grown steadily over the years. In FY 2023-2024, the government expects a revenue target of INR 18 lakh crores from GST collections.
- Number of GST Registrations: As of 2024, India has over 1.3 crore registered businesses under the GST regime.
- Revenue Growth: According to the Ministry of Finance, GST has increased tax compliance, resulting in a 16% year-on-year growth in revenue.
| Year | GST Collection (in lakh crores) |
| 2018-2019 | 11.77 |
| 2019-2020 | 12.22 |
| 2020-2021 | 11.37 |
| 2021-2022 | 14.84 |
| 2022-2023 | 16.61 |
Case Study: How GSTIN Verification Prevented a Major Fraud
In 2022, a leading pharmaceutical company in India narrowly avoided a major financial fraud thanks to its GSTIN verification process. The company was about to enter into a supply agreement with a vendor when their finance team ran a quick GSTIN verification on the government portal. The verification revealed that the vendor’s GSTIN was deactivated due to non-compliance with tax filings.
By detecting this issue early, the company avoided engaging with a fraudulent vendor, saving them from potential financial losses and legal challenges.
Conclusion on GST Verification & Compliance
Why Every Business Needs to Ensure GST Compliance
GST verification is a vital process for all businesses operating in India. It ensures transparency, prevents fraud, and guarantees that businesses can claim the correct ITC.
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FAQs on GST verification
1. What conditions must be met in order to verify GST?
- PAN Card. The Permanent Account Number (PAN) of the authorized signatories/applicant (directors, partners, proprietors, etc.) is required for any type of GST registration.
- Owner or authorized signatories’ photo;
- Phone number and email address;
- Evidence of business location; and
- Bank account information.
2. What makes confirming the GST invoice important?
Precise GST invoice billing streamlines the procedure for tax authorities’ audits or assessments. It guarantees tax conformity and leaves a clear trail of transactions, which lowers the possibility of audit disputes or scrutiny.
3. Describe the procedure for physical verification.
The procedure that an auditor typically uses to verify the existence of the physical assets of Fixed Asset Accounting Records is called physical verification. Fixed assets and inventories make up the majority of the assets that auditors verify.
4. How can I spot a fraudulent GST invoice?
Each GST bill has a unique bill number and series. Compare these details with the supplier’s usual numbering method and invoice format. Any inconsistencies or deviations from the prescribed format may indicate that the bill is fake.
5. How can I confirm my GST information?
Using the Clear GST number search tool, you may confirm if a GST number is accurate, genuine, and hasn’t expired. Instantaneously obtain information on the taxpayer, customer, or supplier by inputting the GSTIN.
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