To verify a GST-registered business, confirm that the GSTIN is Active and that the legal and trade names match your documents, then look for red flags: a Composition taxpayer charging GST, missing or late GSTR-1 and GSTR-3B returns, a very recent registration with a large first order, a state code that does not fit the address, and a PAN inside the GSTIN that does not match the constitution. Each flag has a sensible response, from asking a question to asking for advance payment.
Red flags and what to do
| Red flag | Why it matters | What to do |
|---|---|---|
| Status is Suspended or Cancelled | The business may be closing down or under action. | No credit until the status is clear. |
| Names do not match | Someone may be using another business's GSTIN. | Ask for a purchase order in the registered name. |
| Composition taxpayer charging GST | A composition taxpayer cannot collect GST. | Ask for a correct invoice; do not claim input tax credit on it. |
| GSTR-3B missing for recent periods | Tax not declared or paid; often a sign of cash trouble. | Lower the limit or take part payment in advance. |
| Long run of late filings | Tight cash or weak accounts. | Short credit period and a close watch. |
| Very recent registration, large first order | Little history to judge by. | Start small; raise the limit after on-time payments. |
| State code does not fit the address | The GSTIN may belong to a different branch or business. | Ask which registration the order is billed under. |
| Fourth PAN letter does not fit the constitution | A "company" with an individual's PAN (P) needs explaining. | Ask, and check the company on MCA data. |
| Defaulter reports or court cases | Other suppliers have not been paid. | Avoid credit or take advance payment. |
For the GSTIN structure behind the last few checks, see GSTIN format explained.
Filing-status red flags in more detail
- GSTR-1 filed but GSTR-3B missing: sales reported, tax not paid. Take it seriously.
- No returns for several periods: the business may have stopped trading, and continued non-filing can lead to cancellation of the registration.
- Nil returns followed by a large credit order: ask more questions before you ship.
- Quarterly filing: not a red flag by itself; small taxpayers can opt for the QRMP scheme.
How FundRaksha Trust flags these for you
- The free Basic check shows status, legal and trade name, registration date, constitution and nature of business.
- The Advance GST report adds a GST health score, the filing record with delays and missing returns, Aadhaar, eKYC and e-invoice signals, and defaults reported by other suppliers.
- The GST + Financial report adds court cases and the owner's credit record (with consent) and ends with a credit decision.
- The watchlist alerts you if a buyer's GST is cancelled or suspended later.
Start with the free GST lookup or see the buyer verification page.
Frequently asked questions
How do I verify a GST registered business?
Search its GSTIN on the GST portal or in a verification app, check that it is Active and the names match, and then read its filing record. Before giving credit, also check court cases and reports from other suppliers.
What are the red flags in a GST profile?
Suspended or cancelled status, mismatched names, a composition taxpayer charging GST, missing GSTR-3B returns, a very new registration with a large order, and a state code that does not fit the address.
Does a GST registration prove a business is creditworthy?
No. It proves registration only. Creditworthiness depends on how the business pays, which you judge from court cases, supplier reports and the owner's credit record.
Can a business have different GSTINs in different states?
Yes. A business needs a separate registration in each state it supplies from, all carrying the same PAN. Make sure the order is billed under the registration you checked.
This guide is general information for Indian businesses, not legal or tax advice. GST data shown by any tool comes from public records and should be confirmed on the GST portal before you act on it.