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How to Verify a Fake GST Identification Number Easily?

The Digital India campaign came with a wave of ideas which opened doors to new possibilities of a centralized nation. One such idea was the Goods and Services Tax (GST). GST took India by a storm, being accepted on one hand and rejected on the other. It came with several benefits and a few loopholes too. One such bane was the penetration of corruption into the system.

As is known, two kinds of businesses have come into existence since GST was introduced. One kind includes registered businesses under GST which have their own GST Identification Number (GSTIN) provided by the government, and the other kind includes businesses which are not registered under GST and don’t have a GSTIN due to reasons like the business being a really small one. We as consumers don’t usually pay heed to the GSTIN on our bills, but it calls for attention. The corruption seeps in when these unregistered businesses start charging for GST under a fake GST number. As aware citizens, it becomes a duty to identify and report any such fraudulent activities we come cross. To do so, it is first important to know what a GSTIN is and how we can verify and report a fake one.

About the GST Number

GST was introduced as an amalgamation of various indirect taxes into one, levied with every value added to a product. It was introduced in 2017 as a replacement to the numerous taxes like VAT which were charged with every transaction at different rates in different places. These taxes were unionized into one under GST throughout the country. It benefitted the economy as due to single tax system, cost of goods was reduced, and various procedures for filing GST or other form-filling procedures were made available online, eliminating a huge bulk of paperwork.

Earlier, businesses were registered under the state VAT law, which varied according to the state. After the introduction of GST, businesses have been required to register under GST which is uniform throughout the nation. The companies are provided with their unique Identification Number known as GSTIN which includes details of their owners and the businesses. These are easy to identify as they are shown at the bottom of every bill. Every GSTIN holds meaning and can be decoded with the knowledge of its structure.

Structure of a GSTIN

In order to spot a fake GSTIN, it is first important to understand the way in which a GSTIN is structured. It is a 15-digit alpha-numeric code where each digit is assigned specific information.

  • The first two digits denote the state or union territory code of the business according to the Indian Census 2011. To exemplify, if the first two digits are ‘07’ then it belongs to Delhi and if they are ‘25’ then it belongs to Daman and Diu.
  • The 10 digits that follow indicate the PAN number of the business. This number remains the same for every business registered by the same owner.
  • The 13th digit represents the number of registrations one PAN number has made within the same state or UT. This digit can be alpha-numeric based on the number of entities registered under the same owner. First it will be numeric i.e. 1-9, then it will be alphabetical i.e. A-Z from the 10th registration onwards. Hence, a maximum of 35 registrations can be made under the same PAN.
  • The 14th digit will always be ‘Z’ by default.
  • The 15th digit is the one which can help in detecting a fake GSTIN. It can be either a number or an alphabet.

Verification of a GSTIN

Once you find the GSTIN on your bill, it becomes important to check if it is authentic or fraudulent. Many unregistered entities charge for GST following the structure of a regular GSTIN to evade taxes and attain more profit. Issuing a fake GSTIN is the same as stealing, and so it becomes important to ensure authenticity of the bill payments we make.

It is extremely easy to verify a GST number. All you need to do is make a GST number search on its portal. The business entity prints its GSTIN at the end of every bill. Once you find it, follow these simple steps of verification:

  1. Go to the GST portal or follow the link https://services.gst.gov.in/services/searchtp
  2. You will be redirected to a page where it will ask for the GSTIN of the entity. Enter the GSTIN and click on ‘Search’.
  3. Fill in the right captcha code and click on ‘Search’.
  4. You will then be taken to a page with the entity’s registration details. Ifyou are asked to fill in a valid GSTIN, it means the GSTIN is a fake. If under ‘Taxpayer Type’ it shows ‘Composition’, then the entity is ineligible to charge tax. If any other message shows up, then the GSTIN is valid.
  5. The next step is to check if the rates shown are correct. Sometimes, a business may charge you more than the actual rate of GST. In case you are not familiar with its rates, you can follow the link http://cbec-gst.gov.in/gst-goods-services-rates.html to get a list of the GST verified rates. You can also call 011-21400643 regarding any GST related issue or mail it to helpdesk@gst.gov.in.

Eradicating corruption comes as a duty to us being citizens. Sellers have been fooling buyers for decades on end, and with every initiative that is made to sort out the fraud, newer ones are invented. The only way out of it is to become aware as citizens and report such frauds to the government, instead of falling prey to them. It may take a couple of minutes more out of your checkout time, but it will save thousands from being deceived by such entities. A quick GST number search can help verify a fake GST number in a matter of seconds. You can simply report it to the GST website or email them about it. Thus, the next time you buy from an entity; do a simple verification of its GSTIN and save hundreds from being robbed of their hard-earned money. Because, as it is known, every penny counts!