Under the GST regime in India, each registered taxpaying person is assigned a unique GSTIN. From vendors to customers to suppliers, everyone you deal with should have a valid, active GST number. Given the growing fraudulent cases of fake invoicing and ITC, knowing the GST number is not optional but an integral part of GST verification. It’s a very basic check to avoid penalties, blocked credits, and compliance risks.
This enhanced guide explains GST verification, the structure of GSTIN, legal provisions, examples, and why businesses need to incorporate verification into their vendor onboarding and monthly filing workflows.
What is GST Verification?
Verification of GST essentially means validating the authenticity of a GSTIN through the official GST portal or approved tools. A correct verification process helps you check:
- Whether the GSTIN is active, cancelled or suspended
- The legal name and address of the taxpayer
- Type of registration (Regular/Composition/Casual/Non-Resident)
- Filing history, which will influence ITC eligibility
- E-Invoice applicability
GST taxpayer verification helps businesses in onboarding vendors, validating invoices, reconciling GSTR-2B, and avoiding fake or non-compliant suppliers.
Understanding the GSTIN Structure: With Example
GSTIN is a 15-digit alphanumeric code that contains meaning for every digit. Understanding this will help in identifying fake GST numbers in an instant.
15 Digits Breakdown Example: 27ABCDE1234F1Z5
1. First 2 digits – State Code
Identifies the state of registration: 27 = Maharashtra
2.Next 10 digits – PAN Number
ABCDE1234F — the PAN of the business.
3. 13th digit – Entity Number
Shows the number of GST registrations corresponding to that PAN within the same state (1).
4. 14th digit – Always ‘Z’
Reserved for future systems.
5. 15th digit – Checksum
Ensures structural accuracy; helps in spotting fake GSTINs.
This structure helps businesses run quick manual checks before validating online.
Why is GSTIN verification important?
Here’s what this really means for businesses:
1. Prevent Fake Invoices and ITC Fraud
The fake GSTINs issue fake invoices. If you claim ITC on these,
- ITC to be reversed
- Interest Section 50
- Section 122: Penalties
- Section 73/74 Notices
A 10-second check avoids months of compliance trouble.
2. Be eligible for Input Tax Credit (Law Ref: Section 16 of CGST Act)
You can claim ITC only if:
- Suppliers are GST-registered
- Supplier has uploaded invoices in GSTR-1
- Tax is paid by a supplier to the government.
- Goods/services are actually received
An invalid or an inactive GSTIN directly blocks your ITC.
3. Vendor Due Diligence & Risk Scoring
GST verification forms part of vendor KYC.
- Authenticity of business
- Stability-checking filing score
- Risk assessment for procurement teams
- Shell companies should be avoided.
- This matters even more in annual audits.
4. Avoid Penalties, Audit Flags & Notices
Incorrect GSTIN in invoices or returns attracts:
- ASMT-10 notices
- ITC mismatch alerts
- E-invoice rejection issues
- Invoice validity disputes
A simple verification step keeps your record clean.
5. Keep Accurate Records for GST
Correct GSTIN ensures seamless:
- GSTR-1 reporting
- 3B filings
- E-invoice Vs GSTR-1 Reconciliation
- Monthly GSTR-2B matching
This reduces errors and hence avoids cash outflow on account of ITC mismatch.
How to Verify a GST Number: Step-by-Step?
1. GST Portal Verification (free)
Open the GST portal and log in. Search Taxpayer → Enter your GSTIN → To view Details.
The legal name, status, kind of registration, business address, and filing status can all be verified.
2. PAN-Based GSTIN Lookup
If you only know the PAN, you can search all GST registrations linked to it.
3. Bulk GST Verification Tools
Useful for companies processing thousands of invoices.
Automates verification, filing status, and risk scoring.
4. API-Based Real-Time Verification
Businesses incorporate verification of GST into:
- Billing systems
- ERPs
- Accounting tools
- Procurement software
This prevents fraudulent transactions even before the invoice reaches the system.
Practical Workflow: Verification of GST within Business Processes
Vendor Onboarding SOP
- Collect PAN, GSTIN, address proof.
- Verify the structure of GSTIN
- Check portal status
- Review last 6 months filing
- Validate applicability of e-invoice
- Risk score vendor
Monthly ITC Reconciliation Workflow
- Import GSTR-2B
- Match vendor-wise invoices
- Check suppliers with filing gaps
- Flag high-risk GSTINs
- Re-verify Cancelled/Inactive GSTINs
- Push follow-up emails to non-filers
Internal Audit GST Checks
- GSTIN validity:
- Invoice compliance
- Vendor filing behavior
- E-Invoice Mapping
- Reverse Charge Validation
This ensures audit-readiness.
How GSTIN Verification Helps to Avoid Fraud?
Regular checks regarding GST will enable a business to:
- Identify fake or shell companies
- Avoid wrongful ITC claims
- Identify inactive or cancelled GSTINs
- Avoid suppliers that do not file returns.
- Reduce GSTR-2B mismatches
- Avoid audit queries and penalties
Early verification prevents fraud, which typically begins with a suspicious GSTIN.
How Often Should Companies Check GSTIN Again?
You should re-verify the GST numbers:
- During vendor onboarding
- Before making high-value purchases
- Before releasing payments
- Monthly during GSTR-2B matching
- When vendor filing status drops
- When vendor changes address or business type
- If department issues mismatch alerts
This keeps your ITC clean and minimizes compliance risks.
Get GST Compliance Support with Cretum Advisory
GST rules go through constant changes, and keeping track of vendor compliance, GSTR filings, e-invoices, and ITC mismatches can be very cumbersome.
Cretum Advisory helps you stay worry-free with:
- Monthly GSTR-1, GSTR-3B, and e-invoice compliance
- GSTIN verification and vendor KYC
- Automated ITC reconciliation
- GST audit and scrutiny handling
- Data clean-up and compliance health check
We handle end-to-end processing to ensure that your GST compliance is error-free and audit-ready. Reach out today and make GST hassle-free.
The Final Thought
One of the simplest methods to prevent fraud, protect your ITC, and maintain compliance is to regularly verify your GSTIN. A little understanding of how GSTINs work and verifying each vendor and customer will help avoid penalties, errors, and audit-related issues for a business. A few minutes of verification saves hours of future disputes.
Frequently Asked Questions (FAQ)
1. What do you mean by GST verification?
It is basically checks to determine if the GSTIN is valid, current, and compatible. It helps with fraud prevention and supplier legitimacy verification.
2. What is so crucial about GSTIN verification?
ITC is protected, fines are avoided, fraud risk is decreased, and easy filing and reconciliation are guaranteed.
3. How can a GST number be verified?
Use your billing system’s API integrations, PAN-based search, mass verification tools, or the GST portal.
4. Can a GSTIN be fake?
Yes. At times, fake vendors provide fictitious GST numbers. Online verification brings this out instantly.
5. What happens if I enter incorrect GSTIN in my returns?
You may face ITC reversal, notices, interest, penalties, or blocked credits till corrected.
6. How often should I re-verify GSTINs?
During onboarding and before payments, monthly during reconciliation, also before large transactions, and any time vendor compliance changes.