Goods and Services Tax Identification Number

Goods and Services Tax Identification Number: Overview

Goods and Services Tax (GST) is a taxation framework under which a comprehensive destination-based tax has been implemented. This multi-stage tax will be levied every time there is a value addition in the product. It is implemented on the supply and transportation of goods and services. Prior to GST implementation, a total of 17 central and state taxes have been subsumed into GST and a single tax would be levied by the government at the time of purchase by the consumer. It has made India a unified market where a product will cost same all over the country irrespective of state boundaries.

GST Registration

Every entity that carries out taxable supply of goods and services having an annual turnover of more than Rs 20 Lakhs has to register under GST. Businesses in North-East should get themselves registered if their annual turnover is Rs 10 Lakhs or more. The process of registering a business under GST is called GST registration. Any business can register for GST both online and offline. People can visit the GST portal and register themselves or their business online or visit a nearby GST Seva Kendra to register under GST offline.

After registration, entities are given an identification number called GSTIN which is quite similar to TIN or Tax Identification Number. People can apply for GST registration by filling the GST REG – 06 form for both primary business destination as well as for other destinations.

What is GSTIN?

All businesses or entities that successfully register under GST get a unique number known as the Goods and Services Tax Identification Number (GSTIN). Before GST was implemented, people used to have different numbers for different taxes. Dealers registered under state VAT were provided a unique TIN number by state taxation authorities whereas service providers were assigned a unique service tax registration number by the Central Board of Excise and Customs (CBEC).

Now that GST has been implemented, GSTIN will cater to all such registration numbers and act as a single tax identification number. It will help in improved tax collection and lower the amount of tax evasion because of better administration capabilities. Thus, a single authority will now register companies and individuals on a single platform making it simpler for both companies and taxation authorities to comply with the rules and manage things in a smarter way. As per estimates, more than 8 million taxpayers have been migrated from various platforms to the GST Network. The verification under this framework is also very easy. Users can verify and validate a GSTIN at the GST portal quite easily.

Format of GSTIN

GSTIN is a unique 15-digit alphanumeric code which is assigned to every entity that has successfully registered under GST. This number will be the sole reference number to find out all transactions undertaken under the GST regime. GSTIN has been designed to furnish maximum information of the business as easily as possible. The structure of a GSTIN is mentioned below:

  • First Two Digits – The first two digits of the number are reserved for the state code where the business is being operated. The state code is taken from the Indian Census of 2011 where every state has a unique code. For example, the state code of Delhi is 07 and for Bihar, it is 10.
  • Next 10 Digits – the 3rd to 12th digit of the GSTIN comprises of the taxpayer’s Permanent Account Number (PAN).
  • Thirteenth Digit – This number indicates the number of registrations done by an entity in a state with the same PAN. A total of 35 registrations are allowed in such cases. This is an alphanumeric number. For first 9 registrations, 1 to 9 codes is given and after that, alphabets are assigned. For example, if it is the first registration for a specific PAN, the code is 1 and if it is the tenth registration, the code assigned is A.
  • Fourteenth Digit – The fourteenth digit is kept Z by default. This number is assigned for future reference.
  • Last Digit – The fifteenth digit is the check code which is used to detect errors. This may be a number or an alphabet.

How to apply for GSTIN?

GSTIN is allotted to every entity that successfully completes the GST registration process. Once the application is filled and documents are submitted, it takes few days for the verification of data and once the verification process is complete, the user is registered at the GST portal. After registration, he is provided a GSTIN which can be used to file taxes, view statements and communicate with authorities.

Do existing taxpayers under Central Excise/Service Tax/State VAT have to apply for fresh registration under GST?

Existing taxpayers registered under any of the central excise/service tax/ state VAT authority do not need to migrate to the GST portal. GSTIN would itself migrate such assessees to the GSTIN network. In that case, GSTIN and password would be generated automatically and such entities will have to submit all documents required during the registration period.

When the GST officer verifies these documents, these entities are allotted the GSTIN. In case the applicant is unable to submit his documents or get them approved, his GSTIN is cancelled. Service tax assessees registered under the Central Government have to apply in the state of operation of their business.

What is the cost of obtaining GSTIN?

Obtaining GSTIN is absolutely free of cost and the complete cost is incurred by the central government. Applicants do not have to visit any authority or make any payment online or offline. They have to fill the registration form online and the approval and other tasks are done with minimum interaction of the applicant and GSTN executive, thus reducing the chances of corruption and bribery.

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