What is the GST Number?
Before the implementation of GST, all the dealers registered under the state VAT law were assigned a unique TIN number by the state tax authorities. Similarly, service providers received a service tax registration number from the CBIC.
However, under the GST regime, all the registered taxpayers are consolidated into one single platform for administration and compliance purposes. Every business operating in a state or union territory are assigned a unique Goods and Services Tax Identification Number also known as GSTIN.
Why is GSTIN Required?
To legally operate your business in India, you need a GSTIN if your annual turnover exceeds a specified limit. Registering for GST and getting a GSTIN helps you avoid fines and penalties.
Here’s why you require a GSTIN -
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Filing GST Returns
A GST number is essential for filing GST returns, which are periodic statements of your business's transactions and tax liability. All GST-registered businesses must file returns, even if there is no business activity or tax liability during the period.
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Claiming Input Tax Credit
You need a GST number to claim the input tax credit, which allows you to deduct the GST paid on business purchases. This claim is only possible if the supplier has uploaded the invoice details on the GST portal and included your GST number on the invoice.
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Avoiding Penalties
A GST number helps you avoid penalties for non-compliance with the GST Act. Failing to register when required can result in a penalty of 10% of the tax due or Rs. 10,000, whichever is higher. Additionally, collecting GST but not remitting it to the government can lead to a 100% penalty on the tax amount.
Importance of GSTIN
GSTIN is very important for businesses as it provides them with a unique identity that can be used for various purposes. Given below are the benefits and the importance of GSTIN number for businesses -
- It helps reduce tax evasion, fraud, duplication, identity theft, and other economic crimes.
- It allows transactions across states and union territories to be tracked.
- It provides a single platform for all indirect tax-related compliances.
- Having a GSTIN enables businesses to engage in interstate sales without restrictions, expanding the market for small and medium-sized enterprises.
- With a GSTIN, businesses can claim input credit on purchases and services, ensuring compliance with GST regulations and improving their GST rating.
Each taxpayer receives a state-wise 15-digit PAN-based Goods and Services Tax Identification Number (GSTIN). The format of a GSTIN number is given below -
- The first two digits show the state code as per the Indian Census 2011. Every state has a unique code. For example, if the state code of Karnataka is 29, and the state code of Delhi is 07, then the GSTIN will start with the state code.
- The next ten digits will be the taxpayer's PAN number.
- The 13th digit is assigned based on the number of registrations within a state.
- The 14th digit is ‘Z’ by default.
- The last digit is for the check code. It can be both an alphabet or a number.
Let’s take an example -
- The business registered in Delhi has a state code 07.
- The PAN number of the business is ABCDE1234F.
- The thirteenth digit is ‘2’, which represents the number of registrations done by the firm within the same state using the same PAN number.
- The fourteenth digit is ‘Z’.
- The fifteenth digit is 5, which is a check code and can be a number or an alphabet.
Then, the GSTIN will be -07ABCDE1234F2Z5
Where,
- 07 is the state code
- ABCDE1234F is the PAN number
- 2 is the number of registrations
- Z is the default alphabet
- 5 is the check code.
How to get a GST Number?
Getting a Goods and Services Tax Identification Number (GSTIN) in India is a simple process. Here's a step-by-step guide on how to apply for a GSTIN online:
- Login to the GST Portal
Go to the GST portal (services.gst.gov.in) and click on the 'New Registration' tab.
- Provide Your Details
Enter the required details such as your name, phone number, email ID, and other relevant information. Verify these using the OTP sent to your mobile number or email.
- Receive Application Reference Number (ARN)
Once you've entered your details, you'll receive an ARN (Application Reference Number) via mobile or email. Use this to fill out Part B of the GSTIN application form.
- Submit Documents
Upload the necessary documents, including proof of business, bank statements, residential proof, PAN card, certificate of incorporation, and partnership deed, as applicable.
- Submit Your Application
Submit the completed form with the attached documents. The verification process usually takes up to three working days, after which you'll receive an approval notification via GST REG 06.
Alternatively, you can visit the nearest GST, Seva Kendra, to complete the registration offline by submitting the required documents.
Documents Required for GSTIN
To obtain a GST number (GSTIN), you must submit the following documents with your application:
- PAN Card
Required for both the business entity (e.g., company PAN for companies) and the authorized signatory (individual PAN).
- Business Constitution Documents
This includes documents like the partnership deed, registration certificate, memorandum of association, or articles of association, depending on your business structure.
- Identity and Address Proof of Promoters/Directors/Partners
Acceptable documents include an Aadhaar card, Passport, Voter ID card, etc.
- Proof of Principal Place of Business
You can submit a property tax receipt, electricity bill, rent agreement, or any document that verifies your business address.
- Bank Account Proof
A canceled cheque or bank statement with your business account details is required.
- Signed Authorization Form
This form allows a designated person to act as the authorized signatory for GST purposes.
- Photographs
Recent photographs of the promoters, directors, or partners are also needed.
What is the Difference Between GSTIN and GSTN?
A GSTIN (Goods and Services Tax Identification Number) is a unique identifier for businesses registered under the Goods and Services Tax. On the other hand, the Goods and Services Tax Network (GSTN) is the organization responsible for managing the entire IT infrastructure of the GST portal.
The Government of India uses this portal to monitor all financial transactions and provide taxpayer services like registration, tax filing, and maintaining tax records, ensuring smooth operations under the GST system.
GSTIN has replaced state VAT laws, making it the sole identification number for businesses. It provides legal recognition and helps build trust with customers and business partners. A GSTIN helps businesses file their GST returns and be compliant with the tax laws.
We understand that GST can be complex, and as a business owner, it can be time-consuming to file your GST returns yourself. Don’t worry! Tax2win provides you with online CAs who can take care of your taxes while you focus on your business. Book an expert now!
