GSTIN

What it means

GSTIN stands for Goods and Services Tax Identification Number. It is the 15-character number given to every business registered under GST. It appears on every tax invoice, return and e-way bill, and buyers use it to claim input tax credit on their purchases.

How it works

GST registration is state-wise. A business with the same PAN gets a separate GSTIN for each state where it is registered. Each character of the GSTIN has a meaning.

• Digits 1 and 2: state code, for example 24 for Gujarat, 27 for Maharashtra and 07 for Delhi.

• Characters 3 to 12: the PAN of the business.

• Character 13: entity number, showing how many registrations the same PAN has in that state (1, 2, 3 and so on).

• Character 14: the letter Z by default.

• Character 15: a check digit used to detect errors.

Example

Finvest Traders Pvt Ltd has PAN AABCF1234K. It is registered in Maharashtra and also has a second registration for a separate business vertical in the same state, plus a branch in Gujarat.

Maharashtra, first registration: 27 + AABCF1234K + 1 + Z + check digit, for example 27AABCF1234K1Z5

Maharashtra, second registration: 27AABCF1234K2Z (and its own check digit)

Gujarat branch: 24AABCF1234K1Z (and its own check digit)

Now suppose the Mumbai office sells goods worth ₹1,00,000 plus 18% GST of ₹18,000 to a buyer, but types the buyer’s GSTIN with one wrong character. The ₹18,000 will not appear in the buyer’s GSTR-2B, so the buyer cannot claim the credit until the seller corrects the invoice in GSTR-1 or GSTR-1A. The buyer may then hold back ₹18,000 from payment.

Key points to remember

• Verify a supplier’s or customer’s GSTIN on the GST portal using “Search Taxpayer” before billing, and check that it is active.

• Display your GSTIN on your signboard at the place of business and on all invoices.

• Moving into a new state means a new GSTIN; you cannot use your home-state GSTIN for supplies made from another state.

• Fake or cancelled GSTINs are a common source of ITC fraud; claiming credit on such invoices leads to reversal with interest and penalty.