A trader/entity in India pays value added tax (VAT) while buying goods and services and also collects VAT while selling to the next entity in the supply chain.
Say, the trader bought some goods worth Rs. 10 and if the VAT rate is 10% he would then pay Rs. 11 to the seller including Rs. 1 as VAT. Now the trader sells the goods to another entity for say Rs. 15, he also collects Rs. 1.5 from the buyer in this transaction. Overall the trader paid Rs.1 and collected Rs.1.5 towards VAT. At the end of the day this trader now owes Rs. 0.5 to the government between these two transactions amongst the three entities.
A trader of a decent magnitude would probably have several thousands of transactions a year across hundreds of buyers and sellers. The trader has to periodically (monthly/quarterly/annually) pay the net VAT he owes to the government. At this time he also needs to justify how the net VAT has been reached at. And this is done by a simple balance sheet (J1/J2) stating how much VAT he paid and to whom and how much he collected and from whom. The buyers and sellers are referred to by a unique number called taxpayer identification number or TIN. The government now knows from you, how much VAT you collected, at the same time it also knows from all your sellers how much VAT they collected from you when they submit their accounts.
Mathematically, the sum of all the VAT collected from you from all the sellers would be same as sum of all the VAT you paid to all of them. If either the trader fails to collect the correct TIN of the one of seller or one of the seller fails to provide your correct TIN, this would quickly raise a mismatch and a possible enquiry from the government asking for an explanation to either of the entities.
It’s the traders responsibility to gather and verify the TINs of various entities it transacts with, he may obtain it verbally, through email, sms and any medium he prefers. Obviously this can lead to mistakes. Thankfully the government (of Maharashtra in this instance) has provided a portal to verify and validate TINs @ http://mahavat.gov.in/Tin_Search/Tinsearch.jsp Before submitting their accounts to the government, the trader, or his accountant, has to validate all the TINs in their records. An average 200-300 TINs may be fairly the size for each trader. An accountant may have 20 such clients and hence has to validate thousands of TINs. The portal in it’s current form allows validating on TIN at a time only.
Given the above pretext and the importance of having correct TINs and at the same time validating hundreds or thousands of TINs at once let me to create http://tincheck.tk This came as a request from one of my close relatives who is a Chartered Accountant. I have not hacked the government’s TIN database or gained any access to the same maliciously. The tool provides a bulk input interface to the existing portal of the government and validates one TIN at a time behind the scene like a person would do.
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