A Goods and Services Tax Identification Number (GSTIN) is a unique 15-digit alphanumeric code assigned to every taxpayer registered under the GST regime in India. The GSTIN helps the government to track the tax transactions and compliance of the taxpayers.
The GSTIN is composed of the following elements:
- The first two digits represent the state code as per the Indian Census 2011. For example, 27 for Maharashtra and 09 for Uttar Pradesh.
- The next ten digits are the PAN (Permanent Account Number) of the taxpayer.
- The thirteenth digit is assigned based on the number of registrations a taxpayer has within a state. It can be any number from 1 to 9 and alphabets from A to Z.
- The fourteenth digit is Z by default.
- The fifteenth digit is a check code that can be a number or an alphabet.
Importance of GSTIN verification
- It shows an organisation’s credibility to customers, business partners, companies, financial institutions, and government bodies
- It helps verify the identity of the business for transactions and dealings and also avoid any errors or penalties in GST returns
- It proves the legitimacy of the business and eligibility for claiming input tax credit
The 15-digit GSTIN also provides details about the business. For example, the first two digits represent the state code where the business was registered. The next 10 digits show the PAN number of the person who registered the business. The last three digits indicate the number of registrations made by the business, with "Z" as default, and an alphabet or number for error checking.