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. In Surat's textile trade, also confirm the buyer the broker introduced is the business named on the GSTIN. FundRaksha Trust runs the GST check free and the full buyer report in one place.
How credit works in Surat's textile and diamond trade
Surat's fabric trade is a chain: weavers in Pandesara and Sachin sell grey cloth to processors, processors sell finished fabric and sarees to traders in the Ring Road markets, and those traders sell to wholesalers in other states. Each link sells on credit, and much of the outstation business is arranged by brokers who introduce buyers and earn a commission. Payment periods of 60 to 120 days are common, and goods are often dispatched by transport against a lorry receipt long before payment.
The diamond trade runs differently: rough and polished stones move between firms on approval memos, and settlement depends heavily on trust between known parties. Embroidery and jari units, dye and chemical suppliers and packaging firms sit around both trades and inherit their credit cycles.
Credit risks typical of Surat's trades
- Outstation buyers who stop responding after several consignments, leaving the supplier with lorry receipts and no contact.
- Broker-introduced buyers whose GSTIN belongs to a different business from the one the broker described.
- Deductions and returns: buyers deduct "quality" claims or send back unsold goods months later instead of paying.
- Chains of credit: a trader who is owed by three wholesalers pays the processor only when they pay him.
- Memo goods in diamonds where a firm in difficulty holds stones it has not paid for.
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.
For a broker-introduced buyer, run the check before the first dispatch, not after the third. Ask the broker for the GSTIN and match the legal name to the bill-to party yourself.
Worked example: a Surat saree processor and a new buyer in Hyderabad
A Surat processor gets an order for ₹4,80,000 of printed sarees on 90 days from a Hyderabad wholesaler introduced by a broker. The GSTIN starts 36 (Telangana) and is Active, but the trade name differs from the name the broker gave, and the Advance GST report shows GSTR-3B missing for three of the last six months, with one default reported by another Surat supplier. The processor supplies ₹1,50,000 on 30 days against a post-dated cheque and holds the rest until the first payment clears.
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.
Report the defaulter so other suppliers are warned, and for recovery help in the city see FundRaksha Surat.
Sources
Last reviewed: 2026-10-21. Information for Indian businesses; not legal advice.