How to Verify a GSTIN and Catch a Fake Supplier or Customer — Portal Search by GSTIN and PAN, Reading the Return-Filing Table, E-Invoice and E-Way Bill Checks, MCA and Udyam Cross-Checks, and Why Your Input Credit Depends on the Other Side's Honesty
Video Explanation & Insights
Catch a fake business party, supplier or customer through GST
4 videos on this topic
Reading a GSTIN
A GSTIN such as 08ABCDE1234F1Z5 breaks down as: 08 — the state code (08 is Rajasthan, 07 Delhi, 27 Maharashtra, 29 Karnataka, 24 Gujarat, 09 Uttar Pradesh); ABCDE1234F — the PAN of the entity, whose fourth character tells you the constitution (P individual, F firm, C company, H HUF, A association, T trust, G government); 1 — the number of registrations on that PAN in the state; Z — a default letter; 5 — a check digit. A GSTIN whose PAN segment does not match the PAN the party quotes elsewhere, or whose fourth character says 'company' while the invoice says 'proprietor', is the first red flag.
The checks on gst.gov.in
- 1Search Taxpayer → Search by GSTIN/UIN: enter the number and the captcha. The result shows legal name, trade name, registration date, constitution, taxpayer type (regular, composition, SEZ, casual), status (Active, Cancelled, Suspended), jurisdiction and the principal place of business. Cancelled from a date earlier than the invoice date means the invoice is invalid.
- 2Search by PAN: lists every GSTIN registered on that PAN across states — a party claiming one office in Jaipur but holding fresh registrations in six states is worth a question.
- 3Return filing table (in the same result, 'Show filing table'): the last several GSTR-1 and GSTR-3B periods with filing dates. Gaps, chronic late filing or a GSTR-1 filed without a matching GSTR-3B mean the tax on your invoice may never have been paid.
- 4E-invoice status (Search → e-Invoice status): whether the GSTIN is enabled for e-invoicing (turnover above ₹5 crore). A supplier claiming ₹20 crore turnover but not enabled is inconsistent; an invoice from an enabled supplier without an IRN is not a valid invoice.
- 5Composition status: a composition dealer cannot issue a tax invoice or charge GST — a bill with GST from such a GSTIN is fraudulent.
- 6Search by temporary ID / UIN and the 'Search HSN' tool for rate checks; the e-way bill portal's 'Search e-way bill' shows whether goods actually moved under an invoice.
Signs of a fake or risky party
- •Registration a few months old with sudden high-value invoices; principal place of business in a residential flat, co-working desk or a mail-drop address; the same address used by many GSTINs.
- •GSTR-1 filed but GSTR-3B repeatedly missing or filed with nil tax — the invoice is in your 2B, the tax was never paid.
- •Goods with no e-way bill, no transporter, no weighbridge or gate entry; invoices without HSN, without the mandatory fields, or with round-figure quantities and prices.
- •Pressure to pay in cash or to a third-party account; commission offers for 'adjusting' invoices; a supplier who cannot explain the source of the goods.
- •For customers: a buyer who wants credit-period sales but resists a written contract, whose GSTIN is suspended for non-filing, or who buys far beyond the scale of their business.
- •Circular trading patterns — the same goods invoiced across a chain of related GSTINs at rising prices with little movement.
What a fake invoice costs the buyer
| Provision | Effect on you |
|---|---|
| Section 16(2)(c) | Credit is denied and recovered with 18% interest if the supplier did not pay the tax, even when you paid the supplier in full |
| Section 16(2)(aa) | Credit only for invoices that appear in GSTR-2B — a supplier who never files gives you nothing |
| Rule 86A | The officer may block the credit ledger balance on reasons to believe the credit is fraudulent, for up to one year |
| Section 74 / 74A | Demand with 100% penalty for credit availed through fraud or wilful misstatement; reduced to 15%/25%/50% if paid at the notice, adjudication or appeal stage |
| Section 122(1A) | Penalty on any person who retains the benefit of a fake transaction, equal to the tax involved |
| Section 132 | Prosecution where fake credit exceeds ₹5 crore; arrest is possible above that threshold |
| Income tax | The purchase itself can be disallowed under section 37 or treated as unexplained expenditure under section 69C, taxed at 60% plus surcharge |
Due diligence before the first invoice
- 1Collect GSTIN, PAN, registration certificate, cancelled cheque and a signed vendor form; verify each on the respective portal and save the screenshots with the date.
- 2Check the return-filing table and e-invoice status; for suppliers above ₹5 crore insist on IRN-bearing invoices.
- 3Match the bank account name to the legal name on the GST certificate; pay only to that account, only by banking channels.
- 4Insist on e-way bills and transport documents for goods; keep gate registers, weighbridge slips and GRNs.
- 5Review the party every quarter through GSTR-2B and the IMS — reject invoices that are not yours; if a supplier's registration is cancelled retrospectively, stop dealing and reverse doubtful credit voluntarily through DRC-03 before a notice arrives.
GSTIN verification: questions we are asked
Yes — Search Taxpayer on gst.gov.in needs no login. Bulk verification tools use the same data through GSP APIs.
A suspended registration cannot issue tax invoices; wait until it is active or buy elsewhere — credit on such invoices will be questioned.
Not automatically. Section 16(2)(c) allows recovery from you; the department expects you to show the goods were received and the payment made, and to pursue the supplier. Hold payments until you see the invoice in GSTR-2B.
The filing table shows whether 3B was filed for each period; the amount paid is not public, but a filed 3B with 'nil' liability in a month you were invoiced is a warning.
GST is payable on the invoice whether or not the customer pays; issue a credit note only if goods return or price is reduced. Verify the customer before extending credit.
Yes — one-time and periodic checks, IMS monitoring, and defence of ITC notices with the documentary trail.