Before supplying on credit, confirm the buyer's GSTIN is Active and the name matches the order (a buyer registered in West Bengal has a GSTIN starting 19), read the GST filing record, and check court cases and defaults reported by other suppliers. For buyers in the north-east and Bihar, also confirm the delivery address is a registered place of business. FundRaksha Trust runs the GST check free and the full buyer report in one place.
How credit works in Kolkata
Burrabazar and Posta are wholesale hubs for textiles, food staples and consumer goods for eastern India and the north-east. Credit is given on the strength of family and market relationships, often with post-dated cheques. Jute mills sell bags and fabric to packaging users and traders; Howrah's foundries and engineering units supply castings and fabrication across the region.
FMCG distributors carry dues from brands, schemes and claims that take months to reconcile, which affects how promptly they pay their own suppliers.
Credit risks typical of Kolkata's trades
- Relationship credit extended without any written check, to buyers introduced by other traders.
- Post-dated cheques re-dated repeatedly before bouncing.
- Distant buyers in the north-east and Bihar who are hard to follow up.
- FMCG distributors waiting for scheme reconciliations with brands.
- Foundry buyers disputing weight or quality after delivery.
Checks to run on a buyer
- Validate the GSTIN with the GSTIN validator. A West Bengal registration starts with 19; 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.
A long-standing Burrabazar name is reassuring, but run the GST check on the exact GSTIN billed. Family firms often have several entities, and the one ordering may be newer than the name.
Worked example: a Howrah foundry and a pump maker in Odisha
A Howrah foundry is asked for ₹4,20,000 of castings on 60 days by a pump maker in Cuttack. The GSTIN starts 21 (Odisha) and is Active. The GST + Financial report shows regular returns, a good owner score and no supplier reports, but one old recovery suit, since settled. The decision is "safe to give credit". The foundry offers 45 days with a ₹4,50,000 limit, and reviews it after two cycles.
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 West Bengal can file on MSME Samadhaan before the West Bengal Micro and Small Enterprises Facilitation Council (Directorate of MSME, Government of West Bengal, Kolkata) 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 Kolkata.
Sources
Last reviewed: 2026-10-21. Information for Indian businesses; not legal advice.