Under GST, your supplier’s compliance is directly tied to your Input Tax Credit (ITC). If their GSTIN is inactive, cancelled, or flagged for non-filing of returns, your claim can be blocked even if you’ve already paid the invoice. An online GST verification ensures the supplier is valid, their filings are up to date, and the invoice you receive is eligible for ITC.
A simple online verification helps you confirm that the business you’re dealing with is genuine, active, and compliant. It protects you from fake invoices, rejected input tax credit, and unnecessary legal trouble.
This blog post explains why checking GST numbers before every transaction is essential and how this one small habit safeguards your money and strengthens your business foundation.
Why is a GSTIN required?
The Goods and Services Tax Identification Number is essentially the virtual identity card for any business in India that has been registered under GST. You require this special 15-digit code to establish that your business is on the government record and eligible under the tax laws.
- This number is a way for the tax department to monitor your sales and make sure taxes get deposited properly in the government treasury.
- You require this specific registration number to issue valid tax invoices and to pass on credit benefits to buyers.
- The law says you must have this number if you want to sell goods or services to customers in other states.
- Online marketplaces like Amazon or Flipkart will only allow you to sell on their platforms if you provide this number.
- Having a valid number builds confidence in your clients because it shows you are a serious and compliant business player.
Why is it necessary to verify the GST number?
Checking the GST details of your vendors is a financial safety measure that you simply cannot afford to ignore today. You risk losing your own money if you pay tax to a supplier who has a cancelled or fake registration.
- Protection against fake invoices and fraud: You verify that the bill comes from a real company that actually exists in the government database and not on paper. Scammers often use fake numbers to collect taxes from you, which they never deposit, leaving you in legal trouble.
- Securing your Input Tax Credit eligibility: You can only claim tax credit if your supplier files their returns and pays the tax to the government on time. Checking their status helps you avoid lazy or non-compliant vendors who will cause your tax credit claims to get rejected.
- Preventing legal notices and penalties: Trading with unregistered or fake dealers attracts immediate attention from tax officers and leads to unnecessary legal questions for you. You protect your reputation by ensuring that every single person in your supply chain is a verified and honest taxpayer.
How to do GSTIN search and verification?
The government has made it very easy for you to check any GST number using their free and public online tool. You should make this quick check a mandatory step before you sign a new contract or release a payment.
- Visit the official government website: You will be required to visit the official Goods and Services Tax website.
- Go to the ‘Search Taxpayer’ option: You will find a ‘Search Taxpayer’ menu on the home page itself, and click on 'search by GSTIN/UIN'. Then, click on that.
- Fill in the alphanumeric code precisely: You have to enter the 15-digit GSTIN, which you can find on your supplier's bill. Make sure that there are no spelling errors while entering the submission; otherwise, it will affect.
- Enter the code as it is shown in the image: Type the security characters shown on the screen correctly and hit the search button to pull up the business details.
- Analyse the displayed company’s details: Look through their legal name, jurisdiction, and filing table to make sure that they are active and compliant.
What are the uses of the GSTIN search and verification tool?
This tool serves as a health check report for your vendor, helping you decide whether they are safe to do business with.
- Checking the business is still active: You can check at any time whether the supplier’s registration has been suspended or cancelled by the tax office because of non-compliance.
- Confirmation of legal name and constitution: It confirms that the business name on the invoice matches precisely with what’s recorded in government incorporation or registration records.
- Checking the return filing history: Refer to the filing table if the supplier really files GSTR-1 and GSTR-3B on a monthly basis.
- Verifying the business address registered: The application shows you the location of their head office, which enables you to check whether they do indeed work from there.
- Identifying the type of tax registration: You can find out if the vendor is a regular taxpayer or a composition dealer, which changes how they bill you.
How can GSTIN be misused?
Fraudsters are always looking for loopholes, and your business could become a victim if you do not pay close attention.
- Issuing fake invoices to make credit transfer: Criminals simply steal real GST numbers, issue false bills, and sell no goods. They then sell the illegal tax credits.
- Identity theft on behalf of legitimate businesses: Fraudsters may operate using your business information to engage in unlawful transactions unbeknownst to you, leaving you responsible with the tax authorities.
- Taxing without depositing: Unregistered suppliers sometimes affix a random number to their bills to tax you, and that remains only in their possession.
- Creating shell companies for money laundering: Some use these numbers to set up fake companies that exist only to turn black money into white money.
How does TallyPrime help with GST compliance in India?
Handling verification manually for every bill is hard work, but TallyPrime handles this heavy lifting automatically. It integrates these checks into your daily work, ensuring your financial data is always accurate and safe from common risks.
- On creation of a new ledger account, TallyPrime checks the GSTIN format automatically. This prevents you from saving incorrect or invalid GSTINs by mistake.
- It helps compare your books with GSTR-2B easily. This way, you can find suppliers who have not filed their monthly tax returns.
- You can create accurate e-invoices and e-way bills directly from your vouchers without needing to visit any other website.
- It maintains a digital record of every change you make to transactions. This will be helpful while replying to any queries from tax officers.
- TallyPrime opts for the correct tax type and rates based on the party details. This helps prevent any calculation mistakes.
Conclusion: Online GST Verification
Checking the GST number of your business partners is a fundamental habit that can protect your money and ensure you work legally.
You protect your company against fraud, ensure you receive the tax refunds that are due, and build a network of trusted contacts along the way.
Failing to do this can pull you into expensive legal issues that take your focus away from growth. Make this simple check a part of your daily routine with tools like TallyPrime and stay protected. Start vetting your suppliers now so your growing business stays secure and fully compliant.
