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What is the GSTIN, and how is it used?

What is the GSTIN, and how is it used?

11-Jan-2025

GST

Answer By law4u team

GSTIN (Goods and Services Tax Identification Number) is a unique identifier assigned to a business or taxpayer by the GST authorities when they register under the Goods and Services Tax (GST) regime in India. It is used to track and manage the tax obligations and compliance of a business under the GST law. Key Features of GSTIN: Format: The GSTIN is a 15-digit number with the following structure: First 2 digits: Represent the state code (according to the Indian states and union territories, e.g., 27 for Maharashtra, 07 for Delhi). Next 10 digits: These are the PAN (Permanent Account Number) of the business or individual. 13th digit: Represents the entity number in case there are multiple registrations under the same PAN (in case of multiple business verticals or branches). 14th digit: It is typically "Z" and is used for future expansion or categorization. 15th digit: This is a checksum digit that is used for validation. Example: 27AAAAA0000A1Z5 (Maharashtra state, PAN is AAAAA0000A) How is GSTIN Used? Tax Filing: Businesses use their GSTIN to file GST returns online. The GSTIN is required to file GST returns such as GSTR-1, GSTR-3B, etc., and pay taxes. Invoicing: A registered business must mention its GSTIN on all tax invoices it issues for goods or services provided. This helps ensure proper tax credits for both the seller and the buyer. Input Tax Credit (ITC): The GSTIN is crucial for businesses to claim Input Tax Credit (ITC) on the GST paid for purchases. The buyer needs to match the seller’s GSTIN with the GST return to claim the credit. Compliance: It is used for all GST-related compliance activities, including audits and assessments by tax authorities. B2B Transactions: In business-to-business (B2B) transactions, GSTIN is needed to ensure the proper exchange of goods or services with tax credits between registered businesses. Verification: GSTIN can be verified on the GST portal to check the legitimacy of a business or taxpayer, confirming whether a business is registered under GST. Benefits of GSTIN: It makes tax administration more transparent and accountable. Facilitates inter-state trade without barriers as businesses can avail the Input Tax Credit (ITC) on inter-state transactions. Helps businesses maintain a uniform tax structure across the country. It simplifies the process of filing taxes and claiming tax credits. In summary, GSTIN is a vital number for any business registered under the GST system, enabling them to conduct legal and transparent transactions, file taxes, and claim input tax credits.

Answer By Anik

Dear Client, GSTIN stands for (Goods and Services Tax Identification Number), it is a unique identity number given to a business or taxpayer by the authority of GST. And they are registered under the Goods and Service Tax in India. And this unique number helps to keep a track and manage the obligation of Tax and other important obligation related to Taxes under the GST law of India. GSTIN is a 15 digits number with first 2 digit informing about the state code and followed by 10 digits PAN (Permanent Account Number) of the business or any person. Next digit that is the 13th digit identify the entity number in case there are multiple registration under the same PAN, and 14th digit of GSTIN is mostly “Z” and used for expansion in future and the last digit that is the 15th digit is used for validation. GSTIN is used for filing GST tax returns online and to pay taxes. And this also helps in maintaining the proper tax credits. It is also used for compliance purpose. And GSTIN make sure that proper exchange of GST credits between businesses which are registered. And most importantly GSTIN can be used to verify the legitimacy of any business in registered GST, it also makes tax administration more transparent, and easy for both buyer and seller by simplifying the whole tax process. I hope this answer helps.

Answer By Ayantika Mondal

Dear Client, GSTIN means Goods and Services Tax Identification Number, and it is a unique number given to a business and taxpayer by the GST authorities in India. This number aids and helps in tracking and managing tax-related obligations under the GST law in India. GSTIN is a 15-digit unique number. The first 2digits represent the state, followed by the 10-digit PAN (Permanent Account Number) of the business or person, 13th digit reflects the entity number if there are more registrations under the same PAN. 14th digit is normally “Z” and is used for future expansion, and the 15th digit is called the check digit used for validation. GSTIN is vital for filing GST returns online, for paying taxes, and maintaining proper tax credits. And ensures compliance with GST regulations and facilitates easy credit exchange between the registered businesses. Also, GSTIN helps to verify the legitimacy of businesses, and by making tax administration more transparent and simplifying the overall tax process for both buyers and sellers in India. I hope this answer helps.