GSTIN or the Goods and Services Tax Identification Number or the GST number is a unique number that identifies a business or a person who is registered under the GST Act. The GSTIN number is used by the tax authorities to maintain the GST payment and dues.
The GST number replaces the TIN or the Tax Identification Number used previously by the state tax authorities.
Format of the GST Number
The GST number is assigned to any individual or business that is registered. The number has a specific structure.
Here is a sample GST number – 29AAACC1206D2ZB
The GST number is 15 digits
- The first two digits range between 1 and 35, and this is the state code for registration.
- The next 10 digits are the PAN number of the entity as registered
- The 13th digit of the GST number is the entity code and refers to the registration order of the legal entity that has many registrations with the same state.
- The 14th digit of the registration number is a Z as per the current GST number format.
- The last and the 15th digit is the check code and could be a number or alphabet assigned randomly.
Should you register for a GST number?
If the turnover of your business which supplies goods, is more than 40 lakhs in a financial year, you will have to register for a GST number. You need to register if the business turnover is over 20 lakhs in the Northeastern states and Himachal Pradesh. For business supplying services, the threshold limit is 20 lakhs and 10 lakhs for special category states.
However, you are exempted if your business gets invoices for the services that are used by its own branches.
Why should you have the GST Number?
- The GST number helps to recognize you as a supplier of services and goods. This makes your business more transparent and credible.
- It simplifies the process of input tax credit.
- It helps to make any intra- state transactions and widens your current market.
- Specifying the GST number ensures that the correct input tax credit is allocated.
- GST number is compulsory for the business as it works as its unique identification number.
- GST helps the government to track the compliance of tax policies. It lets the small and medium scale companies file their tax independently, which is one of the major benefits of GST in India.
- It lets the government identify every business.
- The GST number makes it easier to verify businesses.
Benefits of GST
Now that you understand the GST number and have seen the sample GST number, let us move on to the benefits of GST in India;
- GST removes the cascading effect
- It helps to regulate the unorganized sector
- There is now a uniform structure for tax
- The procedure is completely online
- Increases demand product and thus revenue.
The GST number is essential for every business if they want to continue to grow their brand.