If you’re verifying the GST number of your supplier is crucial before making any transactions. Whether you run a small enterprise or a large organisation, ensuring the authenticity of your supplier’s GST registration helps you avoid legal troubles and streamline your business processes. But what exactly should you know before verifying a GST number? And how can tools, GST billing software, and inventory management software simplify this task? Let’s dive deep into these questions.
Why Is Verifying GST Number Important?
The Goods and Services Tax (GST) system is designed to create a transparent tax ecosystem in India. However, the risk of fraud and fake suppliers still exists, making it essential to verify the GST number before you proceed with business dealings.
Here’s why verifying a GST number matters:
- Avoid Fake Invoices: Prevent transactions with unregistered or fake suppliers.
- Claim Input Tax Credit (ITC): Only GST paid to valid suppliers can be claimed as ITC.
- Compliance Assurance: Stay compliant with GST laws and avoid penalties.
- Better Record Keeping: Accurate supplier data helps in smooth audit processes.
What Should You Know Before Verifying GST Number?
1. Understanding the Structure of a GST Number
A GSTIN (Goods and Services Tax Identification Number) is a 15-digit unique identifier assigned to every registered taxpayer. Familiarising yourself with its structure helps you quickly identify discrepancies.
- First 2 digits: State code (e.g., 27 for Maharashtra)
- Next 10 digits: PAN (Permanent Account Number) of the taxpayer
- 13th digit: Entity number of the same PAN holder in a state
- 14th digit: Default ‘Z’
- 15th digit: Checksum character
If any part of this sequence looks unusual, it’s a red flag.
2. Verify on the Official GST Portal
The safest and most reliable way to verify a GST number is by checking it on the official GST portal (https://www.gst.gov.in).
- Enter the GST number.
- Check the status (Active/Inactive).
- Validate the registered business name.
- Verify the state code matches your supplier’s location.
3. Cross-Check Supplier Details
Verification shouldn’t stop at the GST number. Cross-check:
- Supplier’s business address.
- Contact details.
- PAN linked to the GST number.
4. Check Supplier’s Filing History
A GST number might be valid, but if the supplier has a history of not filing returns or has irregularities, it can affect your business. You can request this information or use tools integrated with GST billing software that help track return filings.
5. Understand the Impact of Incorrect Verification
Failing to verify properly may result in:
- Rejection of Input Tax Credit (ITC).
- Legal penalties.
- Increased scrutiny during audits.
- Loss of trust in your business relationships.
How Can GST Billing Software Help?
Manually verifying every GST number can be time-consuming and prone to errors, especially when your business deals with multiple suppliers regularly. This is where GST billing software becomes invaluable.
Benefits of Using GST Billing Software for Verification
- Automated Verification: Many software solutions integrate directly with GST databases to verify supplier GST numbers instantly.
- Error Reduction: Minimises manual input errors.
- Data Management: Keeps supplier details updated and organised.
- Faster Invoicing: Ensures only valid GST numbers are used during billing.
- Audit Ready Reports: Helps generate compliance reports easily.
Using GST billing software not only simplifies verification but also ensures your overall billing and tax compliance is smooth.
Role of Inventory Management Software in Supplier Verification
In addition to billing software, integrating an inventory management software system can add another layer of verification and control.
How Inventory Management Software Assists?
- Linking Inventory with GST Data: Connects supplier GST details with stock received, ensuring that only goods from valid suppliers are added.
- Real-Time Updates: Automatically updates inventory based on verified supplier deliveries.
- Reporting and Analytics: Provides insights into supplier performance and compliance.
- Seamless Integration: Many inventory management tools sync with billing and accounting software like MargBooks, providing a unified platform.
Tips for Smooth and Secure GST Verification
- Always verify GST numbers before making payments or placing bulk orders.
- Use trusted platforms or software tools like MargBooks that offer comprehensive GST verification features.
- Train your team to be vigilant about GST compliance.
- Maintain proper records of verification for audit purposes.
- Regularly update your supplier database.
How MargBooks Simplifies GST Number Verification?
MargBooks, a trusted name in business software solutions, offers integrated GST billing and inventory management features tailored for Indian businesses. Here’s how it can help you:
- Instant GST Number Verification: MargBooks links directly to the government GST databases.
- User-Friendly Dashboard: Easily track the status of supplier GST numbers.
- Integrated Billing & Inventory: Ensures every transaction is compliant and recorded.
- Custom Reports: Generate GST reports that simplify filing and audits.
By using MargBooks, businesses save time, reduce errors, and stay compliant effortlessly.
Conclusion
Verifying the GST number of your supplier is not just a formality; it is a critical step towards ensuring legal compliance and smooth business operations. Understanding the GSTIN structure, using official portals for verification, and leveraging technology, GST billing software, and inventory management software can greatly reduce risks.
Incorporate trusted software, MargBooks, into your daily business routine to make GST number verification seamless and error-free. This not only helps in avoiding penalties but also increases your supplier credibility and strengthens your overall business health.
