Fake GST numbers are not an exotic problem. They show up on invoices from briefly-lived shell vendors, on quotations from businesses that never registered, and on bills where someone has quietly edited one character of a genuine GSTIN. The buyer who pays such an invoice funds the fraud and then loses the input tax credit. The good news: most fake GSTINs collapse under a few simple checks. Here is how the number is built, and the seven red flags worth checking on every new vendor.
First, know what a genuine GSTIN looks like
Every GSTIN is exactly 15 characters, and each position has a meaning:
| Position | What it holds | Example (27AAACR5055K1Z7) |
|---|---|---|
| 1–2 | State code of the place of registration | 27 (Maharashtra) |
| 3–12 | The taxpayer’s 10-character PAN | AAACR5055K |
| 13 | Entity code — the number of registrations under that PAN in the state | 1 |
| 14 | Default letter, currently always Z | Z |
| 15 | Check digit computed from the first 14 characters | 7 |
Because the structure is rigid, many fakes fail on format alone. For a fuller walk-through, see our explainer on what a GSTIN is.
The 7 red flags to check
1. The format is wrong
Anything that is not 15 characters, has digits where the PAN letters should be, or lacks the Z in position 14 is not a valid GSTIN. The embedded PAN itself must follow the PAN pattern: five letters, four digits, one letter.
2. The state code does not match the address
A GSTIN starting with 27 belongs to a Maharashtra registration; an invoice from that GSTIN showing only a Karnataka address deserves questions. Cross-check the first two digits against the official GST state code list.
3. The PAN inside the GSTIN does not match the legal name
Characters 3 to 12 are the vendor’s PAN. The fourth character of the PAN encodes the entity type — C for company, P for individual, F for firm, and so on. A “Pvt Ltd” vendor whose embedded PAN has P in that position is a mismatch worth escalating.
4. A very new registration raising large invoices
Registration date is public information. A GSTIN registered a few weeks ago that immediately raises high-value invoices is a classic pattern in fake-billing cases. It is not proof of fraud, but it justifies stronger checks before payment.
5. The GSTIN is cancelled or suspended
A cancelled registration cannot issue tax invoices. Run a free GST number check and read the status field, not just the name.
6. The name on the invoice does not match the registration
Fraudsters often borrow a genuine GSTIN and print their own name above it. Compare both the legal name and trade name from the lookup with the invoice. If you only have a name to start from, a GST search by name can locate the real registration behind it.
7. A composition taxpayer charging GST
Composition scheme taxpayers pay tax at a flat rate from their own pocket and are barred from collecting GST from customers — they must issue a bill of supply, not a tax invoice. If the lookup shows “composition” and the invoice adds GST, the tax line is being pocketed.
What to do if you find a red flag
- Put the payment on hold and verify the GSTIN on the GST search tool before going further.
- Ask the vendor in writing to explain the discrepancy; genuine businesses resolve this quickly.
- Do not pay the GST component on any invoice from a cancelled or composition registration.
- Review past invoices from the same vendor and discuss ITC exposure with your tax adviser.
- Report confirmed fakes to your jurisdictional GST office; fake invoicing attracts severe penalties.
Building these checks into vendor onboarding takes minutes. Routine GST verification is far cheaper than reversing credit with interest after a departmental notice.
FAQs
Can a GSTIN pass the format check and still be fake?
Yes. Fraudsters sometimes use a genuine, correctly formatted GSTIN that belongs to someone else. That is why matching the legal name, state and status against the official record matters as much as the format.
What does the 13th character of a GSTIN tell me?
It counts registrations under the same PAN within a state — 1 for the first registration, 2 for the second, then letters after 9. A 13th character of 2 or higher simply means the PAN holds multiple registrations, which is normal for larger businesses.
Is it illegal for a composition dealer to charge GST?
Yes. Composition taxpayers cannot collect tax from recipients. Charging GST while under the scheme violates the CGST Act and the collected amount can be recovered with penalties.
Who bears the loss if I pay a fake GSTIN invoice?
Practically, the buyer does. The input tax credit will be denied because the tax was never reported or paid, and recovering the money from the fraudulent vendor is rarely feasible. Prevention through verification is the only reliable protection.