What is GSTIN? Everything You Need to Know


The government’s orders for compliance are getting more strict with every passing financial year. First, they introduced the GST by removing taxes like sales tax, excise duty, and VAT. GST emerged as one indirect tax for the entire nation, unifying the entire taxation system. 

The government implemented the use GST on July 1, 2017. GST registration implies application for GSTIN. 

But first, what is GSTIN? It is an identifier for every business entity that registers for it. Assigning a GSTIN to every entity helps with easy identification and maintains privacy. Keep scrolling to learn what GSTIN means and see what it takes to register for it.

What is GSTIN?

GST stands for “Goods and Services Tax.” Likewise, GSTIN means Goods and Services Identification Number. Taxpayers who register under the GST regime get this 15-digit unique identification number. 

Now that the foundation of what GSTIN means is out of the way, the GSTIN format can be understood. The first two digits of the GSTIN represent the state code of the entity. Then, the ten digits following the state code are those of the PAN number of the individual or business entity. 

The thirteenth digit of GSTIN represents how many registrations the firm has done with that PAN within that state. By default, the next digit for every GSTIN is Z. The last one is a check code to ensure there are no errors.

Note that applying for a GSTIN and registering under the GST regime are free of charge. GSTIN is a replacement for TIN, which was a unique number assigned to those who registered under the state VAT law. Just as GST has replaced VAT, GSTIN is a substitution for TIN. That’s something every business owner must know!

What is the significance of GSTIN?

The importance of GSTIN lies in the authenticity of the vendor one is transacting with. Business entities must mention their GSTIN in their invoices. GSTIN means a public identity that proves the validity and genuineness of the vendor under the GST regime.

Now, you can find everything about a business entity by looking up its GSTIN with one click. Before proceeding with B2B deals, it is ethical to ensure that the other party is genuine by checking their GSTIN.  

Eligibility criteria for GST registration 

There are different slabs to apply for as a GST taxpayer. If a business entity supplying goods has a turnover exceeding INR 40 lakh in one financial year, it must register under the GST regime as a normal taxable person. The limit is INR 10 lakh if the business entity has its base in the northeastern states, Himachal Pradesh, Jammu and Kashmir, and Uttarakhand.

Service providers can apply for a GSTIN if their turnover is at least INR 20 lakh in a financial year. However, the threshold is INR 10 lakh for those in the special category states listed above. 

Apart from these, GST registration is mandatory for some businesses, no matter what their turnover is. These are service providers, TDS/TCS deductors, non-resident taxable persons, casual taxable persons, ISDs, interstate suppliers, and e-commerce suppliers, to name a few. 

Types of GST registration 

As discussed earlier, the GSTIN is an identity for those under its regime. There are four categories here. Businesses with turnovers exceeding INR 40 lakh and INR 10 lakh in special category states can register as normal taxpayers. On the flip side, businesses that operate seasonally or occasionally need to apply as casual taxable individuals. 

Individuals who stay abroad but provide goods and services to Indian residents occasionally can apply as non-resident taxable persons. Finally, business entities that bag an annual turnover of up to INR 1 crore can apply for composition registration. They must pay a specified tax amount, irrespective of their turnover.

Documents needed for GST registration

 The below documents are mandatory for registering a business under the GST regime:

  • Aadhaar card 
  • Permanent Account Number (PAN) card
  • Incorporation certificate or any proof of business registration
  • Bank account statement or a cancelled cheque
  • Digital signature of the applicant
  • Address proof, a photograph, and the identity of the directors and/or promoters
  • Authorisation letter or a board resolution for the authorised signatory of the business entity 

How to apply for GSTIN?

The easiest way to apply for a GSTIN online is:

Step 1: Visit the GST portal.

Step 2: Click on ‘New registration’. Enter details like the name, mobile number, and email ID.

Step 3: Once the OTP verification is complete, you will get an Application Reference Number (ARN).

Step 4: In Part B, one will require further documents like a photograph, bank details, an authorization form, proof of the business location, and the taxpayer’s constitution.

Step 5: Enter all the details and upload the documents. Finally, apply via Aadhaar OTP or DSC.

Advantages of GSTIN

Having a GSTIN has some great perks, such as those listed below:

  • The business can take credit for its purchases and input services.
  • All e-commerce websites need the GSTIN for registration. Listing the business on such platforms will increase customer acquisition.
  • GSTIN brings authenticity to the name of the business as a supplier of goods and services.
  • The business will outdo small businesses as it can take credit for their purchases.
  • The business entity can reach out to outside markets by engaging in the interstate supply of goods and services. It will come under the category of casual taxable persons. 
  • Nowadays, GST returns are mostly automatic and ensure businesses follow all orders of compliance. This results in high GST ratings.

The bottom line 

Visiting the official GST portal is necessary to stay tuned to any changes or announcements made by the government with respect to GST. So, now that everyone knows what GSTIN means, one should have no problem registering their entity under GST.

If you need more help registering under GST, visit Piramal Finance. This online platform is what you need to learn everything about relevant developments in the world of finance. For more information on financial matters or about personal loans, credit cards, and financial management, check out more blogs on their website!