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The Government of India introduced the GST Act in 2017 with the aim of simplifying the country’s taxation system. The main aim of the introduction of GST was to establish one nation, one tax. Businesses having a turnover exceeding Rs.20 lakhs are required to register under the GST Act. Every person registering under the GST Act is issued a 15-digit unique alphanumeric code known as GST number. Having said that, it is extremely important to get this GST number verified to prevent yourself from fraud and errors. In this article, we explore the importance of GST online verification.
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.
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.
Conducting a GSTIN search and completing GST verification online is very simple and involves 3 easy steps -
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 -
GSTIN can be used to deceive the customers, resulting in a loss for them. Below are some common examples of GSTIN misuse -
Once you have registered yourself under the GST Act, the user receives a 15-digit alphanumeric code known as the GSTIN number.
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.
Yes, it is mandatory for businesses to verify their GST numbers. Businesses have to verify the GST numbers of their suppliers and customers before transacting with them. This helps ensure that the business is dealing with registered taxpayers, and they can claim the input tax credit for the GST paid.
Below are the consequences of using an unverified GST number -
Yes, you might have to pay penalties for using a non-verified or invalid GST number. The penalties might be as high as 10% of the total tax liability. It might also include interest on tax liability from the date of the transaction to the date of payment or cancellation of the GST registration.
