Get into the world of the Goods and Services Tax with a focus on the GST Identification Number (GSTIN). This blog provides a clear breakdown of the structure of GSTIN, its associated benefits, and highlights the key differences between GSTIN and GSTN.
GSTIN full form: Goods and Services Tax Identification Number or GST number. The Government of India introduced a tax for goods as well as services, popularly known as GST, on 1 July 2017 to ensure transparency and simplification in India’s tax collection structure. GST replaces different state and central taxes to promote the motto- one tax in one nation.
Previously business entities were allotted a Tax Identification Number or TIN by State Tax departments. This has now been replaced by a PAN-based 15-digit unique Goods and Services Tax Identification Number known as GSTIN number registered by the authority of the GST Registration Process. All legal Taxpayers are registered under a uni authority known as GST.
Format/Features of a GSTIN
GSTIN number is a PAN-based 15-digit unique number that is allotted to every taxpayer according to his/her state.
- The two digits at the very first signify the unique code of each state as decided by the Census of India, 2011. The unique code of West Bengal is 19, so a PAN registered for a person or business entity in this state will start with 19
- The next ten digits stand for the unique Permanent Account Number (PAN) of the business house or taxpayer
- The thirteenth digit signifies the sum total of registrations in that particular state under the same PAN. This number is alphanumerical, which means it can range from 1-9 for businesses with up to 9 business registrations in the state and more than 9 registrations – it will start from A-Z. For example, if a business entity gets 2nd business vertical, the 13th digit will be 2, whereas when a business entity gets GSTN for its 12th business vertical, this digit will be C
- The fourteenth digit comes with the alphabet “Z” by default
- The 15th digit indicates the check code for the sum digit to detect mechanical errors. It can either be an alphabet or can be a number.
How To Verify GSTN Online Instantly?
If you have your GSTIN number, you can easily verify any GSTIN free of cost with a single click. Online verification can help you check the authenticity. It is easy, and you can avoid fraud, correct any errors in reporting and Finding GST number search, and prevent association with vendors who use fake GTINs.
Go to any online GSTIN search and verification tool, enter a valid GSTIN number in the search box, and click on ‘search’.
If the entered GSTIN is valid and authentic, you can verify:
- The legal name of the business
- Date of Registration
- State
- GSTIN status/ UIN status
- Constitution of business- company, sole proprietor, or partnership
- Type of taxpayer- regular taxpayer or composition dealer.
How To Apply For GSTIN?
You can register for GST and obtain a GSTIN for free –
- Log in to gst.gov.in
- As part of the GST REG-01 form, fill out the following pages-
- Business details
- Promoter/ partners
- Authorized Signatory
- Authorized Representative
- Principal Place of business
- Additional place of business
- Goods and services
- Bank Accounts
- State-specific Information
- Verification.
- After submitting the form, you will receive an e-mail and SMS about the submission of the registration application with a 15-digit Application Reference Number
- After verification in the GST portal, the application might get rejected or approved, or further documents might be demanded
- If more clarification is required, a Show Cause Notice Reference Number will be provided, using which you will have to log into the portal, navigate to the exact page demanding clarification and use the same to upload documents
- Once your new Registration Application is verified and approved in the GST portal, you will get a 15-digit unique (GSTIN) along with a temporary password which can be reset after the first login.
Importance of a GSTIN
GST registration has proven crucial for business entities to enjoy a number of important benefits that are offered under the GST authority. It is necessary for businesses which has an annual turnover of more than Rs. 20 Lakh to be registered under GSTIN. If you are lawfully registered as a dealer, you have to file and pay GST returns if liability for GST exists. If the GST payable is more than the GST liability, you can ask for a refund via your GSTIN number.
You can reap great benefits with a GSTIN if you are interested in getting a loan to fund your business. Some financiers facilitate business loans to grow trade by lending money to acquire inventory, expand the commercial areas and grow trade. To be eligible to avail of this kind of loan, you need to register yourself with the Govt. of India and have a genuine GSTIN.
How to Calculate GST?
If you are not familiar with calculating the GST amounts, filling a GST return can become tedious work. Failing to calculate proper GST and giving an improper amount can become subject to legal action against you. Therefore, calculate your GST in India in simple and easy steps. Here is how you can calculate GST Tax offline. The formula to calculate GST is, Cost of the product multiplied by the GST Rate, and the value is to be divided by 100.
GST Amount = (Original Cost * GST%)/100
Net Price = Original Cost GST Amount
You can also deduct the discount from the original before calculating GST. As stated by the GST Law, the supplier of goods shows a discount on a basic price and then charges GST. This does not apply to freight charges. If the freight is to be shown on the invoice, then it must be included in the basic value of the goods. If the taxpayer is sending goods through courier and is charged to the recipient on the invoice, the GST is payable on such courier charges.
Use our GST calculator to determine the exact amount of GST to be paid before registering for GST.
If you want a hassle-free tax filing experience, you can go through the free GST online calculator. However, it will calculate the total GST amount only and will not give a break-up of CGST and SGST. You will need to simultaneously divide the total GST amount into CGST and SGST for intrastate sales. In the case of interstate sales, you can consider it as IGST. Follow these quick steps to calculate GST online.
- Fill the Amount
This amount should be the assessable value amount after deducting any discount. You can also add the value of the freight amount if any
- Enter rate of GST as applicable (5% GST, 12% GST, 18% GST, 28% GST)
- Click on the Add GST button to calculate the amount
- You get the total GST amount payable.
What is the GST Identification Number?
The GST Identification Number (GSTIN) is a unique, 15-digit alphanumeric identifier assigned to each taxpayer under the Goods and Services Tax (GST) regime in India. It is used for various purposes related to GST, such as filing returns, claiming input tax credit, and other GST compliance activities.
GST Number Example
A typical GSTIN might look like this: 27AAPFU0939F1ZV
Here’s a breakdown:
- The first two digits represent the State Code.
- The next ten characters are the PAN number of the taxpayer.
- The 13th digit indicates the number of registrations within a state for the same PAN.
- The 14th digit is currently set to ‘Z’ by default.
- The last digit is a checksum digit used for detection of errors.
Benefits of Getting a GSTIN
- Legal Recognition: A GSTIN legitimises your business operations under the GST regime.
- Eligibility for Tax Credit: Businesses can avail input tax credit which can be offset against their tax liability.
- Easier Interstate Sales: With GSTIN, businesses can conduct interstate transactions without any hassles.
- Access to Online Portal: GSTIN holders have access to the online GST portal, simplifying their compliance processes.
Difference Between GSTIN and GSTN
| Feature | GSTIN | GSTN |
| Full Form | Goods and Services Tax Identification Number | Goods and Services Tax Network |
| Nature | Alphanumeric Identifier | IT Backbone & Infrastructure |
| Purpose | Used to identify a specific taxpayer under GST | Provides the technology infrastructure for the GST regime |
| Length | 15-digit number | N/A |
| Components | State code, PAN, registration number, ‘Z’, checksum digit | N/A |
| Issued To | Taxpayers/businesses registered under GST | N/A (it’s the name of the organisation) |
| Role | Ensures tax compliance and identification of the taxpayer | Facilitates registration, tax payment, and compliance services |
| Connectivity | Specific to a business/individual | Connects central and state governments, taxpayers, and banks |
Conclusion
GSTIN is an important point for legal hindrance-free business across the country. This article clearly summarises the format, verification, importance, and process to calculate GST.
FAQs on GST Identification Number
How do I get a 15-digit GST Identification Number?
You need to register on the GST portal. Once your application is approved, you'll receive a unique GSTIN.
What is the meaning of the 13th digit in the GST Identification Number?
It signifies the number of registrations an entity has in a state for the same PAN.
Can I get an example of a GST Identification Number?
Yes, a sample GSTIN might look like this: 27AAPFU0939F1ZV.
What is the relationship between the GST Number and PAN Number?
The PAN forms a part of the GSTIN. Digits 3 to 12 of the GSTIN are the taxpayer's PAN.
Is it necessary to have a GST Identification Number in India?
Yes, if your business turnover exceeds the threshold limit set by the government or if you are involved in inter-state sales.
How many GSTINs can one person or entity have under a single PAN in India?
A person or entity can have multiple GSTINs if they have multiple business verticals in a single state. Each business vertical would require a separate GSTIN.
How can I obtain a GST certificate once I have registered?
After successful registration, you can download the GST certificate from the official GST portal.
Can a company be registered without a GST Identification Number?
Yes, a company can be registered in India without a GSTIN, but if it crosses the turnover threshold or indulges in interstate sales, it needs to get a GSTIN.
Is GST required for small shops and businesses?
It depends on the turnover and the nature of transactions. Small businesses below a certain turnover threshold might not require GST registration, but it's always best to consult with a tax professional.
What are the benefits of having a GST Identification Number?
Some benefits include legal recognition, eligibility for tax credit, streamlined interstate sales, and access to the online GST portal.
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