Before supplying on credit, confirm the buyer's GSTIN is Active and the name matches the order (a buyer registered in Uttar Pradesh has a GSTIN starting 09), read the GST filing record, and check court cases and defaults reported by other suppliers. When accepting post-dated cheques, also confirm the drawer is the business on the GSTIN. FundRaksha Trust runs the GST check free and the full buyer report in one place.
How credit works in Kanpur
Tanneries and finished-leather units in Jajmau sell to footwear and leather-goods makers in Kanpur, Agra and elsewhere, and to exporters. Footwear and leather-goods makers sell to distributors and retailers. Hosiery and plastics units sell to traders across Uttar Pradesh, Bihar and beyond. Engineering and fabrication units include suppliers to defence establishments, where payment follows inspection and bill processing.
Domestic trade relies heavily on post-dated cheques. That is a strong remedy if the Section 138 timeline is followed, and almost useless if it is not.
Credit risks typical of Kanpur's trades
- Post-dated cheques that bounce, or are re-dated repeatedly on request.
- Footwear distributors carrying unsold stock and returning goods instead of paying.
- Export-dependent buyers whose own payments from overseas are late.
- Defence and government supply bills delayed by inspection or documentation.
- Buyers in Bihar and eastern UP who are far from Kanpur and hard to follow up in person.
Checks to run on a buyer
- Validate the GSTIN with the GSTIN validator. A Uttar Pradesh registration starts with 09; a different prefix means the buyer is registered in another state, which is fine if it matches the billing address on the order.
- Run the [free Trust check](https://www.trust.fundraksha.com/gst-lookup): status Active, legal and trade name matching the purchase order, registration date and constitution.
- Read the filing record in the Advance GST report (129 RP), which also shows registered contacts, associated people and places, and defaults reported by other suppliers.
- For a larger order, the GST + Financial report (499 RP) adds court cases, tribunals and FIRs and the owner's credit score and loan record, fetched with the owner's consent, and ends in a give-credit, caution or avoid decision.
Before accepting cheques from a new buyer, run the GST + Financial report: cheque bounce complaints by other suppliers appear in the court search.
Worked example: a Jajmau leather unit and a footwear maker in Agra
A Jajmau finished-leather unit gets an order for ₹5,60,000 on 90 days from a footwear maker in Agra, with three post-dated cheques. The GSTIN starts 09, Active, regular filing. The GST + Financial report shows two cheque bounce complaints filed by other leather suppliers. The unit asks for 30% advance and 60-day cheques for the rest, and sets a reminder to present each cheque promptly so the notice window is clear if one returns.
If a buyer stops paying
Act early. Start with a payment follow-up, then a legal notice by email and WhatsApp or by registered post with proof of delivery. For a bounced cheque, the Section 138 notice must go within 30 days of the return memo.
A micro or small supplier with Udyam registration located in Uttar Pradesh can file on MSME Samadhaan before the Uttar Pradesh Micro and Small Enterprises Facilitation Council (Directorate of Industries, Government of Uttar Pradesh, Kanpur) once the buyer is past the agreed period, which the MSMED Act caps at 45 days. Interest runs at three times the RBI bank rate, compounded monthly.
Report the defaulter so other suppliers are warned, and for recovery help in the city see FundRaksha Kanpur.
Sources
Last reviewed: 2026-10-21. Information for Indian businesses; not legal advice.