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August 22, 2022

GST Verification Overview: Benefits & Verification Steps

Want to know more about GST verification process? Here's a complete guide on GST verification importance, steps, & its importance & uses. Click here to read now!

Indirect tax is a favored mode of collection for the public coffers. Governments around the world have relied on indirect taxes, in particular, the goods and services (GST) to cushion the government kitty. However, GST verification has posed a challenge for many entities. GST is a destination based indirect tax levied on consumption. For businesses, GST registration is compulsory, notwithstanding the organization size.

In India, the government issues a 15-digit unique number based on the PAN (Permanent Account Number) called GSTIN (GST identification number). Multiple GSTINs are also common as the business may have a presence in several states or may diversify into other activities.   

The regulations aimed at simplifying the tax regime have also opened up a can of worms for businesses, governments, and financial institutions who need to vet the identities of millions to keep frauds at bay.

GST verification: Know what matters

The nature and scope of fraudulent activities beginning from the very first stage throughout the chain are evolving too. Without checks like GST registration verification, many fraudsters are able to bypass the systemic procedures and cause huge losses to the exchequer and financial institutions. 

For instance, fake transactions for GST billing in the state of Gujarat in India robbed the government to the tune of Rs 34,310 crores within 4.5 years. In another case, the tax authorities uncovered over 5,700 cases amounting to nearly Rs 40,000 crore from fake invoicing and fraudulent claims to mop up GST. Similar cases of fraud are being unearthed in many parts of India. 

A simple and effective way to nip GST registration frauds in the early stages can be achieved by deploying a GST verification process. Using the GSTIN, one can verify the legitimacy of a business.  

The three-step GST verification process

Take a look here to understand the necessary steps for carrying out GSTIN verification. 

  1. Enter the 15-digit GSTIN number of the entity to check the authenticity of the business. 
  1. Upon entering the number, the website will furnish details such as the legal name of the business, registration date, type of business, GST number status, type of taxpayer, the official address of the entity, and the goods and services it offers.
  1. You can click on other tabs to get more details. For example, the “Show filings table” produces the tax filing records of the entity. 

About two years back, the government made it mandatory to physically verify office premises for Aadhar-based GSTIN registrations. 

To safeguard yourself and your business, it is important to undertake proper GST verification.  Whether or not you decide to engage in business dealings with another entity, GST number verification is a mandatory step you should not skip. 

Importance of GST verification

  1. Depict an organization’s credibility to customers, business partners, companies, financial institutions, and public bodies.
  2. Helps to cross check the identity for business dealings and commercial transactions.
  3. Shows legitimacy and eligibility to claim tax credits. 

The 15-digit GSTIN is also indicative of various facets of the business. Like the first two digits represent the code of the state where the business was incorporated. In the same manner, the next 10 digits of the number show the PAN number of the individual, who has registered the business. The last three digits denote the number of registrations done by the business, Z (as default), and an alphabet or number for error detection, respectively.  

The verification of GST and registration for high-risk taxpayers in the future may also see the use of geo-tagging along with physical verification in India, as per some reports.   

Uses of GST verification  

There are significant benefits of GST verification, though you may wonder if the verification can actually pay off in day-to-day business activities? The answer is, yes. Have a look below to understand the uses of verified GST in various scenarios. 

  1. When you take your business global
  • Highlights global compliance by meeting and adhering to the local and international laws. 
  1. For managing cash flow and compliance 
  • Increases accuracy and reportage by assisting in the correction of any potential error in reporting GSTIN 
  1.  For verifying physical and handwritten bills and invoices
  • The use of technology such as HyperVerge’s digital verification using AI-powered OCR for document checks can help to spot frauds early. 
  1. When you want to sell goods online 
  • If you want to sell your goods over online platforms, then GST verification comes in handy.
  1. When you want to work with multinationals 
  • Nearly all multinationals or large-sized projects require the interested entity to furnish a GST number, which is subsequently scanned for authenticity. 

HyperVerge and GST Verification 

It is important to stay compliant and vigilant and be able to operate at the speed of business. HyperVerge’s highly trained AI-based OCR and facial recognition can aid in not just verification, but carrying out business seamlessly without the worry of GST registration or verification frauds. Also, with an AI/ML-backed OCR solution as robust as HyperVerge’s, it is able to adapt easily to new geography. HyperVerge’s solution can identify written characters in more than 150 languages and almost all the fonts  worldwide. With the simple GST verification process from HyperVerge, you can check several documents under GST law at scale. 
1. Tax invoice
2. Supplier bill

  1. Voucher of receipt
  2. Voucher of payment
  3. Credit notes
  4. Debit notes
  5. Voucher of refund
  6. Delivery challan

Conclusion

GST verification is an important first step in order to protect yourself from unscrupulous elements. GST compliance involves about 100 different sets of compliance covering the national and state governments. It entails about 140 hours to compile. By using HyperVerge’s advanced solutions, you can save time and money by cutting down the chances of any errors and improving your productivity. 

FAQs

How can you register for GST?

GST registration in India can be done online in a few simple steps. Log on to https://www.gst.gov.in and click on Services, and then Registration.  

Is GST registration free?

Yes, you can do it yourself or engage a consultant to carry out the registration process. 

Are there any goods exempt from GST?

Yes, some goods do not come under the purview of GST. You can access the   full list of exemptions online. 

Is GST verification mandatory to conduct business with a third party?

GST verification is not mandatory to carry out business with any entity. However, it is suggested that you exercise caution and perform due diligence before engaging with any business. 

Is it safe to leverage technology for GST verification?

Yes, it is absolutely safe to leverage technology for verification. Your data, documents, and other details are stored safely in the server and can be accessed in the future too. 

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