Importance of GST Number Verification Online

Why is a GSTIN Required?

Taxpayers require GST registration to take advantage of different types of benefits offered under the GST regime. As per the policies of the Indian government, it is mandatory for all enterprises or businesses having a turnover exceeding Rs.20 lakhs to obtain a GSTIN.

If you are registered under GST, you need to file GST returns and pay the GST liability applicable. You can also use your GSTIN to claim a refund of the GST paid if the paid amount exceeds the GST liability. GSTIN can also be used if you want to apply for a loan to fund your business. Financial institutions provide business loans to companies for various purposes like developing commercial space, expanding operations, etc. A company has to be registered under the GST Act to be eligible for such a business loan.

Why is it Necessary to Verify the GST Number?

The number of GST-related frauds in India has skyrocketed in recent years. For example, fake transactions related to GST billing in Gujarat resulted in a loss of Rs.34,310 crores in a span of 4.5 years. The tax authorities have found nearly 5700 cases amounting to a total of Rs.40,000 crore arising from fraudulent claims and fake invoicing to prevent GST liability.

The GST online verification process plays an important role in preventing such GST-related frauds and errors right at the beginning of the process. The GST verification process also helps verify if the business is legitimate. Without proper GST verification, it becomes easy for fraudsters to bypass the system and cause huge losses.

How to do GSTIN Search and Verification?

Conducting a GSTIN search and completing GST verification online is very simple and involves 3 easy steps -

• Enter the 15-digit GST number of the business entity in the search bar to verify the authenticity of the business.
• Once you enter the number, the website will furnish the details of the entity, such as the business’s legal name, type of business, type of taxpayer, GST number status, registration date, entity’s official address, and the goods and services offered.
• You can also take a look at other details by clicking on tabs like tax filing records of the entity and viewing the filings table.

What are the Uses of GSTIN Search and Verification Tool?

There are multiple uses of GSTIN search and verification tools. However, you might question if the GSTIN search and verification tool actually helps in real life. Well, it does help in day-to-day operations. Let’s see how -

• It plays an important role if you are planning to take your business global
• It helps adhere to local as well as international laws and fosters global compliance.
• It can be used for managing compliance and cash flow.
• Increases the accuracy of reporting by helping correct any potential error while reporting the GSTIN.
• It can also be used for verifying physical and handwritten invoices and bills.
• It verifies GST status to identify fake or invalid taxpayers.
• It ensures the correct input tax credit by validating the GSTIN.
• It authenticates and confirms the validity of any GSTIN.
• It helps avoid transactions with businesses or sellers using fake or forged GSTINs.
• It simplifies the GSTIN verification process.
• It prevents fraudulent activities in business dealings.

How can GSTIN be Misused?

GSTIN can be used to deceive the customers, resulting in a loss for them. Below are some common examples of GSTIN misuse -

• In order to avoid paying taxes to the government, the suppliers use a fake GSTIN ID. Many suppliers use a forged GST number to avoid paying tax. GST number verification becomes extremely important in such cases to avoid such issues.
• The GST provider can generate fake inward invoices to keep a balance of the amount of tax liability. Such invoices can be generated even without supplying any products to anyone.

How to Apply for GSTIN?

• Step 1. Visit the official GST portal and click on the ‘New Registration’ link under ‘Services.’
• Step 2. In Part A Registration, select your taxpayer status (e.g., Taxpayer) from the ‘I am a’ drop-down menu.
• Step 3. Choose your state and district from the respective drop-down menus.
• Step 4. Enter your legal name as per your PAN and your PAN number.
• Step 5. Provide your active email ID and mobile number for OTP verification, as these will be used for future communication.
• Step 6. Enter the OTP sent to your email ID and mobile number in the respective fields, then click Proceed.
• Step 7. After verification, you will receive a Temporary Reference Number (TRN). Note it down securely for use in Part B Registration.

Therefore, it is important to get the GSTIN verified and checked to avoid any kind of manipulation or misuse of the same. It also helps maintain transparency and openness in business transactions and makes sure that you file legitimate GST returns for the period applicable. Using the correct and authentic GSTIN also helps taxpayers claim input tax credits.

Don’t have time to file your GST return or have a GST-related query? Our experts can not only help you file your GST return but also solve your GST-related queries, ensuring you always stay compliant with the GST laws. Book an online CA Now!