Before supplying on credit, confirm the buyer's GSTIN is Active and the name matches the order (a buyer registered in Maharashtra has a GSTIN starting 27), read the GST filing record, and check court cases and defaults reported by other suppliers. For corporate buyers, also confirm which of the buyer's GSTINs your invoice should be billed to. FundRaksha Trust runs the GST check free and the full buyer report in one place.
How credit works in Mumbai
Mumbai's trading markets, for chemicals in Masjid Bunder, textiles in Kalbadevi and garments in Dharavi and Andheri, still run largely on relationships and post-dated cheques. On the corporate side, agencies, consultants and vendors bill companies in BKC, Lower Parel and Andheri on purchase orders, with payment after approval cycles that can run for months.
Large Mumbai companies often hold GSTINs in many states. An invoice billed to the wrong one causes input credit problems for the buyer and a reason to hold payment.
Credit risks typical of Mumbai's trades
- Approval chains: invoices stuck between the user department, procurement and accounts.
- Arbitration clauses in corporate contracts that decide where and how a dispute is heard.
- Post-dated cheques from traders, valuable only if the Section 138 timeline is followed.
- Import and export traders whose own payment depends on an overseas buyer.
- Agency and service work disputed on scope after delivery.
Checks to run on a buyer
- Validate the GSTIN with the GSTIN validator. A Maharashtra registration starts with 27; 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.
For a corporate buyer, use PAN search on the GST portal or the Trust report to see the buyer's registrations, and bill the GSTIN named on the purchase order.
Worked example: a Bhiwandi packaging supplier and a Mumbai FMCG distributor
A packaging maker is asked for ₹8,00,000 of cartons a month on 60 days by a Mumbai FMCG distributor. The GSTIN starts 27 and is Active. The GST + Financial report shows regular filing and a good owner score but a pending cheque bounce complaint filed by another supplier. The packaging maker agrees 30 days with a ₹4,00,000 limit and puts the distributor on the watchlist (99 RP a month).
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 Maharashtra can file on MSME Samadhaan before the Maharashtra Micro and Small Enterprises Facilitation Councils (regional councils for Mumbai, Pune, Nashik, Nagpur, Aurangabad and Amravati regions) (Directorate of Industries, Government of Maharashtra, Mumbai, and regional Joint Director of Industries offices) 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. Maharashtra runs regional Councils; a Mumbai supplier's claim goes to the Mumbai region.
Report the defaulter so other suppliers are warned, and for recovery help in the city see FundRaksha Mumbai.
Sources
Last reviewed: 2026-10-21. Information for Indian businesses; not legal advice.