How to verify the GSTIN of a pharma supplier
Last reviewed: · Pharma Mithra
Every invoice from a registered pharma distributor carries a GSTIN, and most buyers never look at it twice. Yet a GSTIN that is cancelled, or that belongs to a different business from the one on the drug licence, is one of the most common signs that something is wrong with a supplier. This guide shows how to read a GSTIN, what its status means, and how to match it to the drug licence.
How a GSTIN is built
A GSTIN (Goods and Services Tax Identification Number) is a 15-character code issued to each registration under GST. For a normal taxpayer it has four parts:
| Characters | Part | What it tells you |
|---|---|---|
| 1–2 | State code | The state or union territory where this registration is held, as a two-digit code — for example 07 for Delhi, 27 for Maharashtra, 29 for Karnataka, 33 for Tamil Nadu, 36 for Telangana and 37 for Andhra Pradesh. |
| 3–12 | PAN | The Permanent Account Number of the business. For a sole proprietorship, this is the proprietor's own PAN. The fourth character of a PAN shows the holder type, for example P for an individual, F for a firm, C for a company and H for a Hindu undivided family. |
| 13 | Entity number | Distinguishes registrations held under the same PAN in the same state: 1 for the first, 2 for the second, and so on, continuing with letters after 9. |
| 14 | Default letter | "Z" for normal taxpayers. |
| 15 | Check character | Calculated from the first 14 characters by a fixed formula. A single mistyped character usually makes it wrong, so a GSTIN that fails the check is either mistyped or made up. |
Two quick checks follow from this structure. First, the state code should match the state on the supplier's drug licence and dispatch address: a Hyderabad distributor should have a GSTIN starting 36. A business operating in several states has a separate GSTIN in each. Second, the PAN inside the GSTIN should belong to the person or firm named on the drug licence.
Active, suspended and cancelled
The GST portal's public taxpayer search shows the status of every GSTIN, along with the legal name, trade name, constitution of business, registration date, taxpayer type and principal place of business. The statuses that matter most are:
- Active. The registration is in force. This is the only status you want to see on a supplier.
- Suspended. The registration has been put on hold, usually while cancellation is being considered, either because the taxpayer applied to cancel it or because the tax officer started proceedings. A supplier in this state should not be issuing you tax invoices until it is resolved.
- Cancelled. The registration has ended, either on the taxpayer's own application (for example on closing the business) or by the tax officer, commonly for not filing returns. The portal shows the date of cancellation.
You may also see other labels on older or special registrations. Treat anything other than Active as a question to put to the supplier before you pay.
Why the status affects your money
Your input tax credit depends on the supplier being validly registered and reporting your invoice in its own return, so that it appears in your GSTR-2B. A business whose registration is cancelled cannot issue valid tax invoices for supplies after the date of cancellation, so GST you pay on such an invoice is unlikely to be recoverable as credit. Look at the return-filing history on the portal too: a supplier that has stopped filing is a risk even while its status still shows Active.
Composition taxpayers
If the taxpayer type is "Composition", the supplier pays tax under the composition scheme. It issues a bill of supply rather than a tax invoice, cannot charge you GST, and you cannot claim input tax credit on its bills. That is legal, but it should match what the supplier's invoices say.
Matching the GST legal name to the drug licence
GST records carry two names. The legal name is the name on the PAN. The trade name is the name the business trades under. A drug licence, in turn, is issued to a firm and names its proprietor, partners or directors. How they should line up depends on the type of business:
- Sole proprietorship: the GST legal name is the proprietor's personal name, which should match the proprietor named on the drug licence. The GST trade name should match the firm name on the licence, for example "ABC Medical Agencies".
- Partnership firm or LLP: the GST legal name should be the firm's name, matching the firm on the licence, whose partners the licence names.
- Company: the GST legal name is the registered company name, which should match the licensee.
Then compare addresses. The premises on the drug licence should appear on the GST record, either as the principal place of business or as an additional place of business.
Why both checks matter
The two records answer different questions. A drug licence proves that a business is authorised to sell medicines from particular premises. A GSTIN proves that it is registered for tax. Neither proves the other:
- An active GSTIN says nothing about whether the business may trade in drugs.
- A valid drug licence says nothing about whether the invoice you receive will earn you tax credit.
- A genuine licence paired with someone else's GSTIN, or the other way round, is a classic sign of a supplier using borrowed papers. It also means the party you pay may not be the party that is licensed.
A five-minute GSTIN check
- Copy the GSTIN from the supplier's invoice or quotation, not from a message.
- Check it has 15 characters and the state code matches the supplier's state.
- Look it up and confirm the status is Active and returns are being filed.
- Match the legal and trade names, and the address, to the drug licence.
- Verify the drug licence itself; see how to verify a drug licence.
Check it with Pharma Mithra
Check a supplier's GSTIN and its drug licence in one place, and see whether they belong to the same business.
This guide is general information about Indian drug and tax law for businesses, not legal advice. Rules and procedures can differ by state; your state drug control department or GST office has the final word on any individual case.