Before supplying on credit, confirm the buyer's GSTIN is Active and the name matches the order (a buyer registered in Gujarat has a GSTIN starting 24), read the GST filing record, and check court cases and defaults reported by other suppliers. For dealers in other states, also confirm the delivery address is one of the buyer's registered places of business. FundRaksha Trust runs the GST check free and the full buyer report in one place.
How credit works in Rajkot's engineering trade
Rajkot units sell castings, forgings, bearings, diesel engines, pumps and machine tools in two ways: to OEMs and larger manufacturers on purchase orders with agreed terms, and to dealers and distributors who resell in their own regions. OEM business is slower to pay but rarely disappears; dealer business is faster to win and riskier to collect.
The gold jewellery trade runs on its own terms, with metal and finished pieces moving between known parties and settlement depending on trust, so a new counterparty deserves the same checks as an engineering buyer.
Credit risks typical of Rajkot's trades
- Rejection claims raised after the due date, on castings or machined parts, to delay payment.
- Dealers in distant states who are hard to visit and easy to lose contact with.
- Raw-material price swings: buyers who dispute invoices when metal prices fall after the order.
- Large OEM buyers holding payments beyond the 45-day limit while orders continue.
- Diversion: goods ordered for one address and delivered to a third party.
Checks to run on a buyer
- Validate the GSTIN with the GSTIN validator. A Gujarat registration starts with 24; 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.
Rajkot suppliers usually have strong documents. Keep the purchase order, challan and lorry receipt with the Trust report: together they are the file a notice or Samadhaan claim will need.
Worked example: a Rajkot bearings maker and a dealer in Bihar
A Rajkot bearings maker gets a first order of ₹3,30,000 on 45 days from a dealer in Patna. The GSTIN starts 10 (Bihar) and is Active, registered three years ago, with regular returns. The Advance GST report shows no supplier reports, but the delivery address is not among the registered places. The supplier asks the dealer to add the address to its registration or take delivery at the registered premises, and ships on 30 days once that is sorted.
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 Gujarat can file on MSME Samadhaan before the Gujarat Micro and Small Enterprises Facilitation Council (Industries Commissionerate, Government of Gujarat, Gandhinagar) 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. A Rajkot supplier can have the claim heard in Gujarat even when the buyer is in another state.
Report the defaulter so other suppliers are warned, and for recovery help in the city see FundRaksha Rajkot.
Sources
Last reviewed: 2026-10-21. Information for Indian businesses; not legal advice.