What is GSTIN?

The introduction of the Goods and Services Tax (GST) was a watershed moment in the Indian taxation landscape. GST has made indirect tax collection easier, seamless, and more efficient. It has also lowered the instances of tax avoidance drastically. One of the most crucial aspects of this indirect taxation system is the GSTIN. 

Whether you are a business owner or simply an individual who purchases products and services, you must know what GSTIN is and how to verify its authenticity. In this article, we will not only cover the concept exclusively but also deconstruct the GSTIN number to understand what it represents.

What is GSTIN? 

GSTIN is the acronym for Goods & Services Tax Identification Number. It is a unique 15-digit alphanumeric identifier that is issued to businesses and individuals registered under the Goods and Services Tax system. The GSTIN number enables the regulatory authorities, such as the Central Board of Indirect Taxes and Customs (CBIC), to track tax compliance including sales, purchases, and refund data.  

Deconstructing the Structure of the GSTIN 

Now that you know what the Goods & Services Tax Identification Number is, let us deconstruct its structure to understand its various components. A typical GSTIN would look like this: 27AAAAA1234B1Z5.

• The first two digits of the GSTIN represent the state in which the registered entity or individual is located. The digit 27 in the above number is the state code of Maharashtra.     
• The next 10 digits of the GSTIN number are the Permanent Account Number (PAN) of the registered entity or individual. 
• The digit after the PAN represents the number of registrations that the individual or entity has made within a state. 
• The fourteenth digit is the alphabet Z. This is the only digit that remains constant for all GSTINs.
• The last digit of the Goods & Services Tax Identification Number is a checksum digit. The checksum digit can be a number or an alphabet and generated using a special algorithm. It helps detect errors and ensure the integrity of the GSTIN. 

Who Should Apply for GSTIN? 

Applying for a GSTIN is mandatory for individuals and entities meeting the following eligibility criteria.

• The individual or entity must purchase and sell goods, services, or both. 
• The annual aggregate turnover must exceed the stipulated limit. The annual aggregate turnover limit for individuals and entities providing goods is ₹40 lakh (₹20 lakh in the case of special category states). Meanwhile, the turnover limit for individuals and entities providing services is ₹20 lakh (₹10 lakh in the case of special category states). 
• The individual or entity that supplies goods or services across different states (inter-state sales) must apply for GSTIN even if they do not exceed the annual aggregate turnover limit. 
• The individual or entity is classified as a non-resident taxable person or a casual taxable person. 
• The individual or entity acts as a supplier’s agent or an input service distributor. 
• The individual or entity is entitled to pay GST under the reverse charge mechanism. 
• The individual or entity is an e-commerce aggregator or supplies goods or services through an e-commerce aggregator. 

Note: An individual or entity may voluntarily register themselves and get a GSTIN even if they do not meet any of the above-mentioned criteria.  

How to Apply for GSTIN Online? 

To get a GSTIN, you must register yourself under the Goods and Services Tax system. Here is a detailed step-by-step guide on how to apply for GSTIN online.  

• Step 1: Visit the official Goods and Services Tax website. 
• Step 2: Click on the ‘Register’ button on the top right corner of the homepage. 
• Step 3: Click on the ‘New Registration’ option on the new webpage and proceed to fill out the application form.  
• Step 4: Once you have entered all of the details in the respective fields, enter the captcha code displayed in the box and click ‘Proceed’. 
• Step 5: Enter the mobile and email one-time passwords (OTPs) and click ‘Proceed’. 
• Step 6: A Temporary Reference Number (TRN) will be generated. Keep the TRN safe since it is mandatory to complete the GSTIN registration process.
• Step 7: Click the ‘Proceed’ button.
• Step 8: An online registration application form will be displayed with 10 tabs, each representing different aspects. These include the following: 

• Business Details
• Promoter/ Partners
• Authorised Signatory
• Authorised Representative
• Principal Place of Business
• Additional Places of Business
• Goods and Services
• State Specific Information
• Aadhaar Authentication
• Verification
• Step 9: Click each of the tabs and fill in all of the fields. 
• Step 10: In the ‘Aadhaar Authentication’ section of the application, you can choose to authenticate your Aadhaar. If you do not opt for Aadhaar authentication, you will have to manually upload your E-KYC documents. 
• Step 11: In the ‘Verification’ section of the application, select the check box and choose the authorised signatory from the drop-down list. 
• Step 12: Enter the place of signing and select the method of signing the application. You can choose to sign using a Digital Signature Certificate (DSC), E-Signature (Aadhaar authentication) or EVC.  

As soon as you sign the application, it will be submitted and forwarded to the GST authorities for verification. You will also receive an Application Reference Number (ARN) for the same on your mobile number and email ID. You can use the ARN to track the status of your GSTIN application. 

Once the verification process is complete, you will be registered under the Goods and Services Tax regime and a GSTIN number will be allotted.   

Note: If you have opted for Aadhaar authentication at the time of applying for GSTIN, you will receive an E-KYC verification link as an email. You must click the link and complete the authentication process. If you do not complete the process, your application will be rejected.  

How to Verify a GSTIN Number? 

Now that you know how to get a GSTIN number, here are the steps you need to follow to check the validity of a Goods & Services Tax Identification Number.   

• Step 1: Visit the official Goods and Services Tax website.
• Step 2: Click on the ‘Search Taxpayer’ Tab on the homepage. 
• Step 3: Click ‘Search by GSTIN/UIN’.
• Step 4: Enter the GSTIN and the displayed captcha code in the respective fields.  
• Step 5: Click ‘Search’. 

If the GSTIN is valid, you will see details of the entity or individual registered under the Goods and Services Tax regime. On the other hand, if the GSTIN is not valid, you will receive a message stating that the number is invalid.

Conclusion

The Goods & Services Tax Identification Number is an important aspect of the GST regime. Since it is a unique identifier, it allows tax authorities to verify transactions and tax compliance effectively. It is also highly useful for verifying the authenticity and integrity of a business providing goods or services before entering into a transaction.    

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