Goods and Service Tax Identification Number (GSTIN): Explained
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Goods and Service Tax Identification Number (GSTIN): Explained

  • Highlights

  • GSTIN is a unique 15-digit code allotted to every taxpayer registered under GST

  • GSTIN is mandatory for businesses with annual turnover exceeding Rs.20 lakhs

  • Why do you need a GSTIN

  • How to apply for a GSTIN

The Goods and Services Tax (GST), which was launched on 1 July 2017 in a historic event in the Parliament aimed at simplifying the existing tax structure of India. The main aim of implementation of new tax regime is one nation, one tax, one market. GST has replaced a dozen of central and state levied taxes such as excise, VAT, and service tax.

As a result, business entities will now need to register under GST and obtain a unique 15-digit Goods and Service Tax Identification Number (GSTIN). This will replace the previously existing Tax Identification Number (TIN) which was allotted to businesses by respective state tax authorities for registering under VAT.

In the new GST regime, all registered taxpayers will be consolidated on to a single platform for compliance and administration purposes and will be registered under a single authority. Around 8 million tax payers were migrated from various platforms on to GST.

Structure or format of GSTIN

A unique code known as GSTIN is assigned to each tax payer, which will be state wise and PAN based. Here is the breakdown of the 15-digit GSTIN format:
- The first two digits represents the state code as per Indian Census 2011. Every state or Union territory has a unique code. For example, 27 stands for Maharashtra and 09 is for Uttar Pradesh.
- The next ten digits are the PAN number of the taxpayer or business house
- The 13th digit indicates the number of registrations in a state for the same PAN. It will be an alpha-numeric digit (first 1-9 and then A-Z)

- The 14th digit will be alphabet ‘Z’ by default
- The last digit will be a check code to detect errors. It can be an alphabet or a number

Why do you need a GSTIN?

GST registration is critical for business entities to avail various benefits that are available under the GST regime. A GSTIN is mandatory by the government for businesses with annual turnover exceeding Rs.20 lakh. If you are a registered dealer, you need to file GST returns and make a payment if GST liability exists. Also, if the GST paid by you is more than the GST liability, you can claim a refund through your GSTIN.

Additionally, a GSTIN also helps when you are looking to avail a loan to fund your business. Financiers such as Bajaj Finserv provides Business Loans for businessmen to buy inventory, expand commercial space and grow their business. Your business should be registered with the Government of India and have a valid GSTIN to be eligible for a business loan.

With pre-approved offers on business loans, Bajaj Finserv has not only simplified the process of borrowing financing but also offers money in bank with just 1-step verification. Discover your pre-approved offer here.

GST: Explained Wonderfully

How to apply for a GSTIN?

Registering for GST and obtaining a GSTIN is free of cost by the government of India. There are two ways for taxpayers to register under GST:
- Register on GST online portal
- Visit GST Seva Kendra set up by the Government of India

There is a two-step verification process to complete the GST registration process by the businesses. Once the application is approved by the GST officer, you’ll be assigned a unique GSTIN for your business.

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