5 Red Flags in a Supplier's GST Filing You Must Check

Most traders stop at the GSTIN check. They enter the number on the GST portal, see "Active," and move on. That is one step, and it is the least informative one.

The GST portal has significantly more data than a simple active/inactive status — if you know where to look. I've caught three bad suppliers in the last two years purely from their GST filing behaviour, before a single rupee left our account. Here's what I look at.

Why GST filings reveal what a GSTIN alone doesn't

A GSTIN being "Active" means only one thing: the entity registered for GST and hasn't been formally cancelled. It says nothing about whether they are actually trading, financially viable, or running a real business.

GST filing history, on the other hand, tells a story. A business that has been filing regular, consistent returns for three years looks completely different from a business that registered six months ago and has filed two returns. Both might show as "Active."

The story in the filings is what you need to read.

Red Flag 1: Very recent GST registration date

The registration date is visible when you search a GSTIN on https://www.gst.gov.in. It appears in the "Date of Registration" field.

A GSTIN registered in the last three to six months, from a supplier claiming to be an established manufacturer or experienced exporter, deserves a direct question: When were you previously registered?

Legitimate answers exist. A business might have restructured from a proprietorship to a private limited company and re-registered. A director might have moved and restarted in a new state. These are normal events in business life.

But a "manufacturer with 12 years of experience" whose GST registration is dated four months ago, with no explanation, is a red flag. Either the claimed experience doesn't exist, or they're operating under someone else's older registration — which creates its own set of problems for you.

Red Flag 2: Irregular or missing GSTR-1 filings

GSTR-1 is the outward supply return — it records all sales an entity makes in a given month or quarter. A business that is actually trading files it regularly.

On the GST portal, you can see the GSTR-1 filing frequency and status for registered taxpayers. Look at the trailing 12 months. What you want to see:

Consistent monthly or quarterly filings
No months with "Not Filed" status in the past year
If quarterly, filings happening within the due dates

What raises concern:

Three or more consecutive months of missed GSTR-1
Filings stopping entirely for a period, then resuming
A pattern of filing very late, consistently

Why does this matter to you? Because a supplier who isn't filing sales returns is either not actually selling anything, has a cash flow problem serious enough that they're ignoring compliance, or is operating in a way that suggests the "business" is a shell. Any of these three should change your comfort level with wiring an advance.

Red Flag 3: Nature of business doesn't match the claim

When you look up a GSTIN, the portal shows the Type of Business registration — manufacturer, trader, wholesaler, service provider, and so on.

I've seen two patterns worth watching:

Pattern A: Supplier calls themselves a "manufacturer" and quotes you manufacturer-level pricing, but their GST registration says "trader." This isn't automatically fraud — many legitimate trading companies buy from manufacturers and add value at the packaging or quality stage. But if you're paying for ex-factory pricing on the assumption that you're dealing directly with the source, and they're actually a trader, your margin assumptions are wrong.

Pattern B: Supplier's nature of business is completely unrelated to what they're selling you. A chemical supplier whose GSTIN is registered under "textile trading." A packaging supplier registered as a "tour operator." These mismatches suggest either extreme sloppiness in their registration, or that the GSTIN belongs to a different business entirely and is being borrowed.

Ask directly. Watch the answer. A legitimate supplier has a clear, clean explanation for any mismatch.

Red Flag 4: State code mismatch

The first two digits of any GSTIN are the state code. Maharashtra is 27. Gujarat is 24. Delhi is 07. Tamil Nadu is 33. These are fixed.

If a supplier tells you they operate out of Surat, Gujarat, their GSTIN should begin with 24. If it begins with 07, they are either registered in Delhi for reasons that need explaining, or — a pattern I've seen — operating under a GSTIN obtained in a different state to make tracing harder.

Some legitimate scenarios: a company headquartered in Delhi with a branch in Surat might have a Delhi GSTIN for their export billing. That's fine and explainable in 30 seconds. What you're looking for is whether they can explain it, not whether a mismatch automatically disqualifies them.

A supplier who gets defensive when you ask a simple administrative question about their registration state is telling you something.

Red Flag 5: GSTIN name inconsistent with other documents

This is the one that catches the most bad actors, and it is also the one most traders never think to check.

Take the legal name that appears on the GST portal. Now compare it to:

The name on their quotation
The name on the letterhead they sent you
The name on their IndiaMART profile
The name on their IEC registration (DGFT)
The name on their website About page

In a legitimate business, these are all the same name — or differ only in ways that are obviously explainable (a common trade name alongside the legal name, for instance).

In a fraudulent setup, the names drift. "Verma Agro Products Pvt Ltd" on GSTIN. "Verma International" on the quotation. "VAP Exports" on IndiaMART. "Verma Agro" on the website. All four of these feel like the same business — and that vagueness is intentional.

When names drift across sources without an obvious explanation, it is frequently because the GSTIN belongs to one entity and the person you're talking to represents something else. They are presenting multiple layers of identity, none of which are fully accountable for the transaction.

Vetrade cross-references GSTIN legal names automatically against IEC, B2B platforms, and web presence as part of its supplier report — so you see these discrepancies flagged in one place rather than hunting across five portals: vetrade.unceasingimpex.com

What to do when you find a red flag

Finding one of these flags does not automatically mean the supplier is fraudulent. It means you have a question that needs a clear, documented answer before money moves.

The right approach is simple: ask the question directly, in writing (WhatsApp message, email, or both), and record the response. A legitimate supplier gives you a coherent answer within a day or two. An evasive or irritable response to a reasonable compliance question is itself an answer.

Do not wire any advance while a flag is unresolved. The deal pressure you feel at that moment — "they might give the order to someone else," "the buyer is waiting" — is the same pressure that has cost every trader I know their worst loss. The advance can wait. The resolved question cannot.

The GST portal check you should do right now

If you have any supplier in your active pipeline you haven't fully GST-verified, take 10 minutes today and run through the five flags above. The portal is free and public. You do not need the supplier's cooperation.

For each GSTIN, note:

Registration date — is it consistent with their claimed history?
GSTR-1 filing pattern — are they filing consistently?
Nature of business — does it match what they're selling you?
State code — does it match where they claim to operate?
Legal name — does it match everything else they've given you?

Five checks. Ten minutes. If all five are clean, you've significantly raised your confidence baseline. If one or more raises a question, you have exactly the right opening to ask it before you're in a position where the money has already gone.

Key Takeaways

A GSTIN showing "Active" is the bare minimum — it is not a trust signal
Check registration date: a brand-new GSTIN from a claimed established manufacturer needs a direct explanation
Review GSTR-1 filing history for the past 12 months: irregular or missing filings signal financial or operational problems
Verify that the nature of business registration matches what they're actually selling you
Cross-check the GSTIN state code against the supplier's claimed location
Compare the GSTIN legal name against IEC, B2B listings, and their website — inconsistency across sources is the strongest single fraud indicator

Have questions or a fraud case you want to share? WhatsApp Aditya directly: +91-7517231254