AUBSP»Indirect Tax»CA Shailesh Poddar»Goods and Services Tax (GST)»What is GST and GSTIN? How to Decode your GSTIN?

What is GST and GSTIN? How to Decode your GSTIN?

Meaning, registration and decoding/structure of Goods and Service Tax (GST) and 15-digit GSTIN (Goods and Service Tax Identification Number).

In India, a dual GST module has been proposed by the Empowered committee and accepted by centre. Under this model, GST have two components viz. the Central GST to be levied and collected by centre and the State GST to be levied and collected by the respective states.

Central Excise duty, additional excise duty, service tax, and additional duty of Customs (equivalent to excise), State VAT, entertainment tax, taxes on lotteries, betting and gambling and entry tax (not levied by local bodies), Octroi, luxury tax would be subsumed within GST thus making it a single indirect tax in India.

What is GST and GSTIN?

Article 366(12A) of the Constitution as amended by 101st Constitutional Amendment Act, 2016 defines the Goods and Service Tax (GST) to mean any tax on supply of goods, or services or both except taxes on the supply of the alcoholic liquor for human consumption.

The GST is a value added Tax proposed to be a comprehensive indirect tax levy on manufacture, sale and consumption of goods as well as services at the national level. In simple word, GST is destination based tax and levied at a single point at the time of consumption of Goods and Services by the ultimate consumer.

India’s most awaited largest economic reform, is in receipt of Presidential assent to four key legislations viz. The Central GST Act, 2017, The Integrated GST Act, 2017, The GST (Compensation to state) Act, 2017 and The Union Territory GST Act, 2017, on 12th April 2017 paving the way for the earliest roll out of GST (Goods and service tax). These bills were passed by Rajya Sabha and Lok Sabha on 6th April 2017 & 29th March 2017 respectively.

Similarly, all states and union territories except Jammu and Kashmir, have passed their State Goods and Service Tax Act, 2017. Telangana become the first state to pass their GST Bill (The Telangana Goods and Service Tax Act, 2017) and Bihar is the first NON- NDA ruled states to passed their GST bill (The Bihar Goods and Service Tax Act, 2017).

Note that GST rollout on 1st day of July 2017. GST Council in its meeting decided 4 tier structures of rates viz. GST Tax Rate 5%, GST Tax Rate 12%, GST Tax Rate 18% and GST Tax Rate 28% (with cesses) in addition to ZERO rated and exempted goods or services.

GST key Features:

  • One comprehensive levy on Goods and Services “ONE NATION ONE TAX”
  • Shift to “Destination based Taxation”
  • Common Taxable event – “Supply”
  • Increase in credit base – near seamless flow of eligible credits
  • Improves Business competencies with rewarding the honest and complaint

GSTIN refers to “Goods and service tax identification number”. Identification of tax payer is essential to levy any taxes. Therefore, to identify tax payer, registration is the most fundamental requirement so that to ensure tax compliances in the economy.

Requirement of registration under Goods and service tax

As per Section 22(1) of The Central Goods and service tax Act, 2017, Every supplier shall be liable to be registered under this Act in the State or Union territory, other than special category States, from where he makes a taxable supply of goods or services or both, if the aggregate turnover in a financial year exceeds twenty lakhs rupees:

Provided that where such person makes taxable supplies of goods or services or both from special category States (the states as specified in sub-clause (g) of clause (4) of article 279A of the constitution), he shall be liable to be registered if his aggregate turnover in a financial year exceeds ten lakhs rupees.
However as per section 22(2) every person who, on the day immediately preceding the appointed day, is registered or holds a licence under an existing law, shall be liable to be registered under this Act with effect from the appointed day.

So, every supplier shall be liable to be registered under GST act in the state or union territory, from where he makes a taxable supply of goods or services or both, if his aggregate turnover in a financial year exceeds twenty lakhs (ten lakhs in case of special category states).

Decoding and structure of GSTIN

In GST registration, the supplier is allotted a 15-digit GST identification number called GSTIN and a certificate of registration. Formation such GSTIN is as below: –

Example: GSTIN – 19ABCDE1234F1Z3

State Code
PAN
Entity Code
Check Sum
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
1
9
A
B
C
D
E
1
2
3
4
F
1
(by default)
3
Meaning of GSTIN (GST Identification Number)

1. In GST, the State code as defined under the Indian Census 2011 has been adopted. For example, In the above GSTIN first two digits are 19 represent to state West Bengal.

List of State code as per Census 2011

State Code
State Name
       01
       Jammu & Kashmir
       02
       Himachal Pradesh
       03
       Punjab
       04
       Chandigarh
       05
       Uttranchal
       06
       Haryana
       07
       Delhi
       08
       Rajasthan
       09
       Uttar Pradesh
       10
       Bihar
       11
       Sikkim
       12
       Arunachal Pradesh
       13
       Nagaland
       14
       Manipur
       15
       Mizoram
       16
       Tripura
       17
       Meghalaya
       18
       Assam
       19
       West Bengal
       20
      Jharkhand
       21
       Orissa
       22
       Chhattisgarh
       23
       Madhya Pradesh
       24
       Gujarat
       25
       Daman & Diu
       26
       Dadra & Nagar Haveli
       27
       Maharashtra
       28
       Andhra Pradesh
       29
       Karnataka
       30
       Goa
       31
       Lakshdweep
       32
       Kerala
       33
       Tamil Nadu
       34
       Pondicherry
       35
       Andaman & Nicobar Islands

2. Next 10 alpha-numeric digits of the GSTIN represents PAN of the legal entity.
3. Next 2 alpha-numeric digits of the GSIN represent number of registrations of a legal entity within one state. (if number of legal entity within one state is between 1 to 9 including both then value of 2nd cell shall be Capital “Z” by default). In the above example, it is “1Z” so it means such entity has single registration in West Bengal.
4. Last alpha-numeric digit is used as check sum.

If you have any doubt and query, please feel free to ask regarding structure of GST Identification Number.

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4 Responses to What is GST and GSTIN? How to Decode your GSTIN?

  1. aka says:

    Thanks for the info. Much appreciated
    I have a doubt regarding the 13th & 14th characters in the GSTIN.
    As you have explained that if a legal entity has 1 registration in a state then 13th character would be 1 (1-9 including both). And I read somewhere else that this 13th character is alphanumeric ranging from 1-9 (including both) & A-Z since a legal entity can have upto 35 business verticals(& hence 35 registrations) in a state. So up till 9 registrations for a single legal entity in a state we would have the 13th character as a numerical digit (from 1 to 9), however if suppose some legal entity has more than 9 registrations within a state then what impact would it have on the 13th character in the 15 character long GSTIN
    Kindly clarify at the earliest possible.

  2. govind says:

    very useful information provided.

  3. Thrikku says:

    what is meant by Check sum???

    • Shailesh Poddar says:

      A Check digit is added to the identification number (usually the last digit).This digit is used to verify the identification number for its legitimacy. Check digit is added to the number to detect any errors made while typing the number into the system. The Check digit is calculated with an algorithm.

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