GST Number, or GSTIN, or Goods and Services Tax Identification Number, is crucial for businesses operating under India’s GST system. A business with a turnover exceeding certain limits would need to be mandatorily registered so that it complies with tax regulations and avails of the Input Tax Credit (ITC) facility. An additional advantage of GST Number is the enhancement of credibility, ease of filing taxes, and hassle-free interstate transactions. Those businesses will suffer legal penalties if they don't have a GST number and will forfeit any key tax advantages.

What is the GST number?

GST Number, or Goods and Services Tax Identification Number, is a unique 15-digit alphanumeric code assigned to every business that registers under the Goods and Services Tax (GST) system in India. This number serves as the identity of the business in all its tax-related dealings under GST.

Why was GST Number introduced?

GST Number replaced the TIN (Taxpayer Identification Number) system with a single, unified tax identification that applies across all states. Whether you’re a service provider or a manufacturer, having a GST number ensures your business complies with the new tax laws, making it easier to do business across India. Earlier, until 2017, the business entities were identified using a TIN under the VAT system. The old VAT was state-centric, and it led to confusion and complications mainly where the business transactions involved interstate trade.

When is it mandatory to obtain a GST number?

It is, therefore, important to get the kind of knowledge on when your business needs a GST number so you can comply and avoid some penalties under GST. To be covered under the GST law, any business under compulsory turnover or the nature of the activities is required to register for a GST number. Here is a detailed breakdown on when your business needs to apply for GST registration:

1. Annual Turnover Limit For almost every business in India, enrollment under GST becomes indispensable when the annual turnover crosses over ₹20 lakhs In specific category states like Assam, Meghalaya, Himachal Pradesh, and more, the limit is much lower—₹10 lakhs. Businesses operating from these states need to enroll under GST when their turnover exceeds ₹10 lakhs.

2. Interstate Supply of Goods and Services Any sales business has to mandatorily get registered for GST irrespective of the turnover; in case your turnover is less than ₹20 lakh/₹10 lakh, then when you cross the state line and sell to another state, you need a GST number.

3. E-Commerce and Online Sellers If you are selling products or services on an e-commerce platform, then again, above or below the threshold, your turnover would be immaterial. You would still be liable to pay GST. In this regard, you would also encompass all those businesses that sell using Amazon, Flipkart or their own websites.

4. Casual Taxable Persons and Non-Resident Taxable Persons A casual taxable person is a casual supplier of goods and/or services in India not having a fixed place of business wherein such activities are supplied (eg, businesses at trade fairs). They must register for GST, irrespective of turnover. Non-resident taxable persons, such as foreign businesses supplying goods and/or services in India, must obtain a GST number irrespective of turnover.

5. Reverse Charge Mechanism You are liable to pay tax under the reverse charge mechanism, wherein the recipient of goods/services pays GST rather than the supplier, and therefore your business has to get registered for GST. 6. Voluntary GST registrations You can apply for voluntary registration even if your business does not come under the specified conditions or turnover limit. A business will be able to claim input tax credit (ITC), increase credibility, and extend interstate operations smoothly with a GST number.

Why is GST Number Important for Your Business?

A GST number is not only a number; it has a pivotal role in how your business deals with the GST system. Here's why:

• Legal Mandate: Any business whose annual turnover crosses ₹20 lakh (₹10 lakh in a few special category states) needs to register under GST and must obtain a GST Number. Without this, you cannot operate legally or collect GST. special category states include Eleven States such as Assam, Nagaland, Himachal Pradesh, Manipur, Meghalaya, Sikkim, Tripura, Arunachal Pradesh, Mizoram, Uttarakhand and Telangana

• Claim ITC: If you have a valid GST number, then input tax credit can be claimed on the purchase. That is the greatest benefit of being GST compliant, as it reduces your overall tax burden.

• State-Specific Tax Gets Solved: Interstate transactions were a complicated matter under the older system since there are many state-specific taxes. GST Number provides hassle-free interstate transactions as it eliminates those complications.

• Trust and Transparency: A GST Number, being a registered number, adds credibility to clients and suppliers with whom business can quickly be set up.

What is the format of the GST number?

Your GST number is a 15-character alpha-numeric code. Let’s understand the format with an example.

Example GST Number: 27ABCDE1234F1Z5

The first two digits are the state codes as per the Census of India. Here, 27 refers to Maharashtra.

The next ten digits are your Permanent Account Number. Here, ABCDE1234F is the PAN.

The thirteenth digit of the GST number is an entity code that identifies multiple registrations under the same PAN within a state. It starts from 1 to 9 for the first nine registrations and continues with A to Z for additional registrations, allowing businesses to differentiate between their various branches or units in the same state. Here, 1 refers to single registration in the state of Maharashtra.

The fourteenth digit is always 'Z' by default.

The fifteenth digit is an error detection character checksum.

How to Obtain a GST Number?

Obtaining a GST number is much easier than you think. Here's a step-by-step guide on how you can do it.

Method 1: Via GST Portal 

Step 1: Log in on the GST Portal.

Step 2: Click on 'Services' and then the link for 'New Registration'.

Step 3: Enter PAN and mobile number, email, and state.

Step 4: Fill out the OTP received on your phone and email.

Step 5: Upload supporting documents as enumerated above to successfully submit your application.

Method 2: Through GST Seva Kendras

If you would like help at your own pace, visit the nearest GST Seva Kendra to get offline assistance with the registration process.

Method 3: Other Third-Party Platforms

Several private portals are also accessible for GST registration. Nevertheless, some authentic ones should be chosen for the safety of your data.

What Documents are Required To For GST Registration?

Validity of a GST Number

For a normal taxpayer, the GST number remains valid until it is canceled. For temporary or casual taxpayers, the enrollment is valid only for a stipulated period.

How to Search a GST Number on the GST Portal?

Do you want to check your own GST number or that of any supplier? Follow these steps:

Step 1: Visit the GST Portal.

Step 2: Find the "Search Taxpayer" section

Step 3: Use the GST number check tool to put in the GST N you wish to verify.

Step 4: Click the "Search" button and retrieve the registration details and cross-verify the same with validity and against the vendor or business with whom you are dealing.

What Happens If Your Business Doesn't Have a GST Number?

Not having a GST number when your business has crossed the specified threshold limit can have some serious consequences for your business. Here are some of them:

• Dues: In case of non-registration of a business whose turnover exceeds the threshold for GST registration, very heavy dues are incurred.

• Legal Issues: Running a business without a GST number when required to be obtained will likely lead to litigation against your business, and it may even be closed down.

• Missed Opportunities: Without a GST Number, the input tax credit and other benefits from GST are lost to you, hurting your bottom line otherwise.

What are the Benefits of Having a GST Number?

Having a GST number has a lot of advantages, such as:

• Claim ITC: Input tax credit can be claimed over the GST you pay for purchases, thus reducing your total tax burden.

• Increase Credibility: A GST number makes businesses look more authentic to clients and suppliers, thereby boosting their trust.

• Easy Compliance: Filing returns and tax handling becomes easy with a GST number by virtue of centralized taxation.

• Smooth Operations: GST Number makes your business eligible for interstate sales, and you expand your business without facing a multiple-state tax system.

What is the Cost of Getting a GST Number?

Well, that's the best news—application for GST registration through the official GST Portal is FREE! However, if you are using a third-party platform, then they may charge you a service charge to help you in registration.

Conclusion:

Having understood the importance of the GST number, you have now become ready to act. It may be a new registration request or verification of GST details. All this simply depends upon the right tools helping you out.

Easily manage the compliance and filing for your tax under GST. Visit hisabkitab.co to eliminate all those business hassles. From registration, login, and tracking input tax credit, everything should fall into place.

Do not wait! Take the start today with hisabkitab.co and make tax compliance an easy affair for your business.