BUSINESS PROCESSES FOR GST ON GST REGISTRATION

By | October 14, 2015

REPORT OF THE JOINT COMMITTEE ON BUSINESS PROCESSES FOR GST ON GST REGISTRATION

Empowered Committee of State Finance Ministers

New Delhi July, 2015

1.           Introduction

2.           Assumptions

3.           Structure of registration number

4.           Procedure for obtaining Registration

5.           Facilitation Centers and Tax Return Preparer Scheme

6.           New Applicants

7.           Migration of existing registrants

8.           Registration of Compounding Dealers

9.           Amendments in the Registration Form

10.         Cancellation/surrender of registration

11.        Explanation of the Entries in the Form (should be attached to the Form)

ANNEXURES

I            Constitution Order of Joint Committee on Business Process for GST

II          List of Participants of the meeting held on 2nd and 3rd February, 2015

III         GST Registration Application Form

IV         Application Form for Surrender / Cancellation of registration

V          Application Form to opt for Compounding Scheme

VI         Application Form to withdraw from Compounding Scheme

VII       Application for Amendment of registration subsequent to Registration

VIII      Extract of the report of the Committee on the problem of dual control, threshold and exemptions in GST regime

IX         Extract of the minutes of refinement to the process for States option for two-way API based integration

X          Extract of the report of the Committee on IGST and Imports.

GST

Report of the Joint Committee on Business Processes for GST on Registration Processes in GST Regime

1.0 Introduction

During the Empowered Committee meeting held on 10th March, 2014, it was decided that a Joint Committee under the co-convenership of the Additional Secretary (Revenue), Government of India and the Member Secretary, Empowered Committee should be constituted to look into the Report of the Sub-Group-I on Business Processes for GST and make suitable recommendations for Registration and Return to the Empowered Committee. It was also decided that the Joint Committee should also keep in view the Registration and Return requirements necessary for IGST Model. Accordingly, a Joint Committee, in consultation with the Government of India, was constituted on 7th April, 2014 (Annexure-I).

1.1. The Committee held its deliberations on 28th October, 2014, 12th November, 2014, 25th November, 2014, 22nd December, 2014, 2nd and 3rd February, 2015, 19th and 20th February, 2015, 16th and 17th April, 2015 and 7th and 8th July, 2015. The Report of the Joint Committee on Business Processes on Registration was accordingly circulated to all the States. However, this Report was further discussed in the meeting of the Joint Committee on Business Processes held on 22nd and 23rd July, 2015. Some changes were made as per the discussions in the meeting of the Joint Committee on Business Processes held on 22nd and 23rd July, 2015. The report of the Joint Committee on Business Processes on Registration was accordingly finalized. The list of the participants of the meeting of the Joint Committee on Business Processes held on 22nd and 23rd July, 2015 is appended at Annexure-II.

1.2. Registration of a business with the tax authorities implies obtaining a unique identification code from the concerned tax authorities so that all the operations of and data relating to the business can be agglomerated and correlated. In any tax system this is the most fundamental requirement for identification of the business for tax purposes or for having any compliance verification program. Registration under Goods and Service Tax (GST) regime will confer following advantages to the business:

  • Legally recognized as supplier of goods or services.
  • Proper accounting of taxes paid on the input goods or services which can be utilized for payment of GST due on supply of goods or services or both by the business.
  • Pass on the credit of the taxes paid on the goods or services supplied to purchasers or recipients.

2.0 Assumptions

2.1The business process proposed in this document is based on the following assumptions:

(1) A legal person without GST registration can neither collect GST from his customers nor claim any input tax credit of GST paid by him.

(2) There will be a threshold of Gross Annual Turnover including exports and exempted supplies (to be calculated on all-India basis1) below which any person engaged in supply of Goods or Services or both will not be required to take registration. Once a dealer crosses the required threshold or he starts a new business, registration application must be filed within 30 days from the date of the dealer‟s liability for obtaining such registration. Effective date of registration would be the date of application in all cases i.e. whether the application has been filed within prescribed time limit of 30 days or otherwise. The taxpayer would be eligible for ITC in respect of all his purchases from the date of application in case application for registration has been filed within 30 days. The taxpayer would, however, not be eligible for ITC in respect of his purchases prior to the date of registration in case the registration application is not filed within the prescribed time limit of 30 days, although Centre is of the view that such a provision may not stand the test of judicial scrutiny. On the other hand States, based on their experience under VAT, were of the view that having relevant provision in the GST law has helped them contest cases in courts. GST Law Drafting Committee to make provision relating to eligibility for ITC accordingly as well as for levying penalty in case of a dealer failing to register within the stipulated time period.

(3) However, such person with all-India gross annual turnover below the threshold turnover would be allowed to take registration, if he wants to. By taking such voluntary registration he can enter the credit chain even prior to crossing the threshold limit, provided he does not opt for the Compounding scheme (as defined below).

(4) There will be another relatively higher threshold of Gross Annual Turnover (to be calculated on all-India basis) to be called Compounding turnover up to which the registered person can opt to pay tax at a specified percentage of the turnover, without entering the credit chain. Such registered person will neither be allowed to collect tax from his customers nor claim any input tax credit. Compounding dealers shall remain under compounding scheme till their turnover crosses threshold or they opt for out of the scheme. Such dealers don‟t have to apply every year to remain under the compounding scheme. However, if the compounding dealer opts out of compounding in a financial year, for any reason, but eligible and wish to avail compounding in the next financial year, such dealer will have to apply afresh for compounding in the beginning of the financial year in which he wishes to claim compounding scheme.

(5) All other taxable persons will be required to take GST registration. Such persons will be able to take the credit of taxes paid on inputs / input services / capital goods and pass on the credit of GST to his customers / recipients of goods or services or both.

(6) The registered person eligible for the Compounding scheme but opting against the Compounding can pay regular taxes and file tax returns on monthly basis, and thereby make his supplies eligible for input tax credit in the hands of the purchasers/recipients.

(7) Irrespective of turnover, if a taxable person carries out any inter-state supply and / or is liable to pay GST under reverse charge, he will be compulsorily required to take registration. Such person shall neither be eligible for exemption threshold nor for Compounding scheme. However, an individual importing services for personal consumption will not be liable to pay GST under reverse charge or register under GST if the GST law so provides.

(8) All UN bodies seeking to claim refund of taxes paid by them would be required to obtain a unique identification number (ID) from the GST portal. The structure of the said ID would be uniform across the States in uniformity with GSTIN structure and the same will be common for the Centre and the States. The supplier supplying to these organizations is expected to mention the UID on the invoices and treat such supplies as B2B supplies and the invoices of the same will be uploaded by the supplier.

(9) A unique identification number (ID) would be given by the respective state tax authorities through GST portal to Government authorities / PSUs not making outwards supplies of GST goods (and thus not liable to obtain GST registration) but are making inter-state purchases. The structure of the said ID would be uniform across the States in uniformity with GSTIN structure. The supplier supplying to these organizations is expected to mention the UID on the invoices and treat such supplies as B2B supplies and the invoices of the same will be uploaded by the supplier.

(10) The concept of Input Service Distributor (ISD) presently being followed in Centre’s Law may continue if the GST Law so provides. They would be required to obtain GSTIN for distributing the credit of GST paid on services proposed to be used at multiple locations which are separately registered. This would be an exception/ deviation in case of services only. GST Law Drafting Committee to make appropriate provisions for the same.[While, at this stage it has been decided to make exception only for services, it is worth mentioning here that the Cenvat Credit Rules provide for a mechanism to allow distribution of inputs, which is basically a mechanism to distribute credit on inputs. Such mechanism is necessary for service provider as the location of payment of GST may be distinct from the location where goods are received. Therefore, drafting Committee may look into this issue.]

(11) All existing registered persons, whether with the Centre or State under any of the tax statues being subsumed in GST, would be allotted a GST registration number called Goods and Services Tax Identification Number (GSTIN) on voluntary basis. Dealers who are below the GST threshold will have option to remain in GST chain. GST Law Drafting Committee to make appropriate provision.

(12) Tax authorities, in case of enforcement cases, may grant suo-moto registration. If such person does not have PAN, the registration would be initially temporary and later converted into a PAN based registration. [GSTN to develop temporary registration numbering system]

2.2 For each State the taxable person will have to take a separate registration, even though the taxable person may be supplying goods or services or both from more than one State as a single legal entity.

2.3 Multiple registrations within one State to business verticals [as defined in Accounting Standard (AS) 17 issued by ICAI] of a taxable person may also be permitted, subject to all the verticals being on the same scheme of tax treatment if the GST Law so provides.

2.4 A supplier who is not registered on regular basis, whether on mandatory or voluntary basis, in other State (s) and desires to conduct business in a particular State for a limited period, will have to obtain registration in that State for that limited period. Such suppliers are known as casual dealers and shall not be allowed to opt for composition scheme. However, the supplier would be eligible to claim ITC on purchases / inward supplies. The period of registration would be mentioned in the registration certificate also. The format of Registration Certificate for such taxpayers is different from the regular taxpayers. Even the application form for registration will have field for ascertaining estimated supplies. Return for such taxpayers would also be different. Such taxpayers would be required to self-assess their likely liability and deposit the same as an Advance Tax. Such amount would be deposited by way of two Demand Drafts (one for Centre and other for State) which would be returned to the taxpayer after he has discharged his final liability. The GST Law Drafting Committee may provide for conditions for registration and tax payment.

2.5 A Non-resident Supplier is a person who, in the course of business, makes an intra-state supply of goods or services or both, but is not a resident in the state in which he has applied for registration, but is already registered in any other state. Since the Non-Resident Supplier is already registered in another State, there would be an easy way of registering such entities in the State in which registration is applied as Non-Resident Supplier. The provisions applicable on casual dealers (as detailed in para 2.4 above) may apply to them except that no security deposit or advance tax collection may be made in their case.

3.0 Structure of registration number

3.1Each taxpayer will be allotted a State wise PAN-based 15-digit Goods and Services Taxpayer Identification Number (GSTIN).

3.2 Various digits in GSTIN will denote the following:

State Code

PAN

Entity Code BLANK Check Digit
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
 3.3 In the GSTIN, the State Code as defined under the Indian Census 2011 would be adopted. In terms of the Indian Census 2011, each State has been allotted a unique two digit code e.g. „09‟ for the State of Uttar Pradesh and „27‟ for the State of Maharashtra.

3.4  13th digit would be alpha-numeric (1-9 and then A-Z) and would be assigned depending on the number of registrations a legal entity (having the same PAN) has within one State. For example, a legal entity with single registration within a State would have „1‟ as 13th digit of the GSTIN. If the same legal entity goes for a second registration for a second business vertical in the same State, the 13th digit of GSTIN assigned to this second entity would be „2‟.This way 35 business verticals of the same legal entity can be registered within a State.

3.5  14th digit of GSTIN would be kept BLANK for future use.

3.6 In GST regime, multiple registrations within a State for business verticals of a taxable person would be allowed. This provision should be subject to following specific stipulations –

(1) Input Tax Credit across the business verticals of such taxable persons shall not be allowed unless the goods or services are actually supplied across the verticals.

(2) For the purpose of recovery of dues, all business verticals, though separately registered, will be considered as a single legal entity. (Final view needs to be taken by the GST Law drafting committee)

3.7 Switching over from Compounding scheme to Normal scheme and vice-versa would be dealt in the manner described below –

(1) Any existing taxpayer not under Compounding scheme may opt for Compounding scheme, if eligible, only from the beginning of the next Financial Year. The application will have to be filed on or before 31st March of the previous year so that Returns can be filed accordingly.

(2) Compounding dealer may be allowed to switch over to Normal scheme even during the year if they so want, with a condition that they cannot switch over to Compounding scheme again during the same financial year.

(3) Any existing taxpayer under the Compounding scheme upon crossing the Compounding threshold will be switched over to the Normal scheme automatically from the day following the day of crossing the Compounding threshold. GST Law drafting committee should provide for a suitable time-period of inputs and capital goods purchases on which ITC would be permitted at the time of switching over to Normal scheme.

(4) For the changes covered by (1) to (3) above, the validation in the return module should change automatically under intimation to the concerned taxpayer and both the tax authorities. A suitable validation / dependency of the return module should be established.

The above changes should also be published on the common portal in addition to being intimated to other taxpayers who have identified such taxpayer as their counter-party taxpayer.

4.0 Procedure for obtaining Registration

4.1 For obtaining registration, all the taxable persons shall interact with tax authorities through a common portal called GST Common Portal2 that would be set up by Goods and Services Tax Network (GSTN). The portal will have backend integration with the respective IT systems of the Centre and States.

4.2 The procedure prescribed in para 6.0 below is meant for new applicants. The procedure for migration of existing registrants either with the Centre or State or both is dealt in para 7.0 below.

4.3 A new applicant would be allowed to apply for registration without prior enrollment. Once a complete application is submitted online, a message asking for confirmation will be sent through e-mail and SMS to the authorized signatory of the applicant. On receipt of such confirmation from the authorized signatory, Acknowledgement Number would be generated and intimated to the applicant. Once the application is approved and GSTIN is generated, the same along with Log-in ID and temporary Password will be sent to the authorized signatory. This credential will be permanently used to access the GST Common Portal subsequently. Provision for capturing e-mail and Mobile Number of authorized representative of the taxpayer has also been incorporated in the proposed GST Registration Form. It would be the responsibility of the taxpayer to keep this information updated.

4.4 Online verification of PAN of the Business / Sole Proprietor/ Partner/Karta/Managing Director and whole time directors/Member of Managing Committee of Association, Managing trustee/authorized signatory etc. of the business would be mandatory and without such verification, registration application will not be allowed to be submitted.

5.0 Facilitation Center and Tax Return Preparer Scheme

5.1 In order to cater to the needs of taxpayers who are not IT savvy, following facilities shall be made available:-

5.2 Tax Return Preparer (TRP): A taxable person may prepare his registration application / returns himself or can approach the TRP for assistance. TRP will prepare the said registration document / return in prescribed format on the basis of the information furnished to him by the taxable person. The legal responsibility of the correctness of information contained in the forms prepared by the TRP will rest with the taxable person only and the TRP shall not be liable for any errors or incorrect information. If so provided in the GST law, TRPs would be approved by the tax administration of the Centre and the States and will also be provided appropriate training by them, as per common curriculum to be devised by EC/ GST Council.

5.3 Facilitation Centre (FC) shall be responsible for the digitization and / or uploading of the forms and documents including summary sheet duly signed by the Authorized Signatory and given to it by the taxable person. After uploading the data on common portal using the ID and Password of FC, a print-out of acknowledgement will be taken and signed by the FC and handed over to the taxable person for his records. The FC will scan and upload the summary sheet duly signed by the Authorized Signatory. This is the system in vogue for submitting TDS returns by more than 2 million tax deductors to the Income Tax Department.

5.4 Registration of TRP/FC is recommended. Final view may be taken by the GST Law drafting committee on the same.

6.0 New Applicants

6.1 The process highlighted in the paragraphs below is applicable for new applicants for registration, both mandatory and voluntary.

6.2 New applicant can apply for registration:

(1) at the GST Common Portal directly3; or

(2) at the GST Common Portal through the Facilitation Center (FC)

Multiple applications can be filed at one go where a taxable person seeks registration in more than one State or for more than one business vertical located in a single / multiple State(s).

6.3Following scanned documents are required to be filed along with the application for Registration –

Relevant Box No. in the Registration Form Document required to be uploaded Reason for requirement
2. Constitution of Business
  • Partnership Deed in case of Partnership Firm ;
  • Registration Certificate in case of other businesses like Society, Trust etc. which are not captured in PAN.

 

In case of Companies, GSTN would strive for online verification of Company Identification Number (CIN) from MCA21.Constitution of business / applicant as per PAN would be taken except for businesses such as Society, Trust etc. which are not captured in PAN.

Partnership Deed would be required to be submitted in case of Partnership Firms.

11. Details of the Principal Place of business
  • In case of Own premises – any document in support of the ownership of the premises like Latest Tax Paid Receipt or Municipal Khata copy or Electricity Bill copy
  • In case of Rented or Leased premises – a copy of the valid Rent / Lease Agreement with any document in support of the ownership of the premises of the Lessor like Latest Tax Paid Receipt or Municipal Khata copy or Electricity Bill copy
  • In case of premises obtained from others, other than by way of Lease or Rent – a copy of the Consent Letter with any document in support of the ownership of the premises of the Consenter like Municipal Khata copy or Electricity Bill copy
  • Customer ID or account ID of the owner of the property in the record of electricity providing company, wherever available should be sought for address verification.
This is required as an evidence to show possession of business premises. If the documentary evidence in Rent Agreement or Consent letter shows that the Lessor is different from that shown in the document produced in support of the ownership of the property, then the case must be flagged as a “RiskCase”, warranting a post registration visit for verification. GST Law Drafting Committee may add penalty provision for providing wrong lease details.

 

12. Details of Bank Account (s) Opening page of the Bank Passbook held in the name of the Proprietor / Business Concern – containing the Account No., Name of the Account Holder, MICR and IFS Codes and Branch details This is required for all the bank accounts through which the taxpayer would be conducting business.
17. Details of Authorised Signatory For each Authorised Signatory:

  • Letter of Authorisation or copy of Resolution of the Managing Committee or Board of Directors to that effect

 

This is required to verify whether the person signing as Authorised Signatory is duly empowered to do so.
Photograph
  • Proprietary Concern – Proprietor
  • Partnership Firm / LLP – Managing/ Authorized Partners (personal details of all partners is to be submitted but photos of only ten partners including that of Managing Partner is to be submitted)
  • HUF – Karta
  • Company – Managing Director or the Authorised Person
  • Trust – Managing Trustee
  • Association of Person or Body of Individual –Members of Managing Committee (personal details of all members is to be submitted but photos of only ten members including that of Chairman is to be submitted)
  • Local Body – CEO or his equivalent
  • Statutory Body – CEO or his equivalent
  • Others – Person in Charge

6.3.1 For Field No 16 (i.e. Details of Proprietor / all partners / Karta / Managing Director and whole-time Director / Members of the Managing Committee of Association of Persons / Board of Trustees etc.) and Field No 17 (i.e. Details of the Authorized Signatory), verification of PAN with CBDT database and GSTN database will be carried out online before the submitted application is sent to the State/ Centre. In case of mismatch the applicant will be given an opportunity to correct the same.

6.4A registration form has been designed and is annexed as Annexure-III. This form should be developed by GSTN as per the standard practices / protocols on IT notified by the Govt. of India e.g. for digitally capturing a postal address, name etc. In case there is no standard practice for any of the field, the same should be developed by the GSTN and form designed accordingly. Fields marked by asterisk in the form are mandatory fields and must be filled by the applicant.

Separate application forms are to be designed for:

(1) Multiple registration for business verticals of same legal entity (it must be registered already) within a State;

(2) Application for registration in more than one State (that can be filed at one go);

(3) Amendments to existing Registration(s);

(4) Cancellation of Registration(s);

(5) Option to avail / withdraw from the Compounding scheme;

(6) Enrolment of Tax Practitioner or Facilitation Centre if provided for in the GST Law;

(7) Assignment of Role (by a dealer) to TP/FC, as agent of the dealer if so provided for in the GST Law;

(8) Application for new registration on account of Succession / Amalgamation / De-merger etc. of existing GST registrants;

(9) Application by UN bodies for getting a Unique Identification Number (ID).

6.5 In some North-eastern States, individuals (Proprietorship firms) are exempt from Income Tax. However, to obtain GSTIN they will have to obtain a PAN before they can apply for registration under GST. Further Government departments will also be required to obtain PAN if they are required to obtain registration under GST. Under GST regime, registration will not be allowed without a valid PAN.

6.6 If applicant files application through the Facilitation Center, then the above procedure shall be followed by him through the FC by making available the requisite documents to the FC. The User ID and Password of taxable person will however be forwarded by portal to the e-mail furnished by the taxable person (that of primary authorized signatory) and by SMS to the mobile number furnished by taxable person or by post, if the taxable person so desires. It will not be sent to FC.

6.7 The GST common portal shall carry out preliminary verification / validation, including real-time PAN validation with CBDT portal, Adhaar No validation with UIDAI, CIN (Company Identification) with MCA and other numbers issued by other Departments through inter-portal connectivity before submission of the application form. Taxpayers would have the option to sign the submitted application using valid digital signatures (if the applicant is required to obtain DSC under any other prevalent law then he will have to submit his registration application using the same). In the absence of digital signature, taxpayers would have to send a signed copy of the summary extract of the submitted application form printed from the portal to a central processing center to be operated by GSTN. The location details of this central processing center would be intimated to the applicant along with the application acknowledgement number. The application will be processed even without waiting for receipt of the signed copy of the summary extract. If the signed copy is not received within 30 days, a reminder will be sent through e-mail and SMS to the authorized signatory through the portal. If the copy is not received within 30 days after such reminder being sent, the system will prompt the concerned tax authority to initiate the action for cancellation of the registration. Such cancellation will have prospective effect i.e. from the date of cancellation. GST portal would acknowledge the receipt of application for registration and issue an Acknowledgement Number which could be used by the applicant for tracking his application. Such Acknowledgement Number would not contain the details of jurisdictional officers.

6.8The application form will be passed on by GST portal to the IT system of the concerned State/ Central tax authorities for onward submission to appropriate jurisdictional officer (based on the location of the principal place of business) along with the following information –

(1) Uploaded scanned documents;

(2) State specific data and documents;

(3) Details if the business entity is already having registration in other States. This should also include GST compliance rating4;

(4) Details of the PAN(s) of individuals mentioned in the application which are part of the other GST registrations;

(5) Acknowledgment number stated in para 6.7 above;

(6) Details of any record of black-listing or earlier rejection of application for common PAN(s).

(7) Last day for response as per the 3 common working day limit for both tax authorities as set out through Holiday Master.

On receipt of application in their respective system, the Centre / State authorities would forward the application to jurisdictional officers who shall examine whether the uploaded documents (as detailed in para 6.3 above) are in order and respond back to the common portal within 3 common working days, excluding the day of submission of the application on the portal, using the Digital Signature Certificates.

An indicative process for processing of the application by the concerned tax authorities will be drafted and shared separately. Submission of latitude and longitude data in respect of principal place of business will be of help in automatic identification of jurisdictional officer in case of geographically distributed officials mapped on a digital map. However, submission of latitude and longitude would be optional.

6.9 After verification, the following situations are possible:

(1) If the information and the uploaded documents are found in order, the State and the Central authorities shall approve the application and communicate the approval to the common portal within 3 common working days. The portal will then automatically generate the Registration Certificate.

(2) If during the process of verification, one of the authorities raises some query or notices some error, the same shall be communicated to the applicant either by the Tax Authority directly or through the GST Common Portal and also simultaneously to the other authority and to the GST Common Portal within 3 common working days. The applicant will reply to the query / rectify the error / answer the query within a period informed by the concerned tax authorities (Normally this period would be seven days). A separate sub-process and interactive form for this purpose will have to be designed. On receipt of additional document or clarification, the relevant tax authority will respond within 7 common working days. (time-period that would be allowed to the applicant for rectification of any error will be decided by the GST Law drafting committee)

(3) Thereafter the processing of registration application will commence resulting in either grant of registration or refusal to grant registration. If either of the two authorities (Centre or State) refuses to grant registration, the registration will not be granted.

(4) In case registration is refused, the applicant will be informed about the reasons for such refusal through a speaking order. The applicant shall have the right to appeal against the decision of the Authority. A deeming provision to the effect that rejection of the registration application by one authority amounts to rejection by both Centre and State will need to be incorporated in the GST law.

(5) The tax authorities in the Centre and State would have a period of 3 common working days to respond to the application, either conveying approval or raising a query. In case any of the authority neither reject the application nor raise a query within 3 common working days, then the registration would be deemed to have been approved by both the authorities and the GST Common Portal will automatically generate the registration certificate. In case either authority raises a query within 3 common working days, applicant will have to respond to the same within next 7 common working days failing which the application will be rejected. After the applicant has responded to the query raised by any authority, a period of another 7 common working days will be given to the authorities to respond to the application. In case any of the authority neither rejects the application nor raises a query during this period, then the registration would be deemed to have been approved by both the authorities and the GST Common Portal will automatically generate the registration certificate. ( GST law to have provision for the same)

6.10 The applicant shall be informed of the fact of grant or rejection of his registration application through an e-mail and SMS by the GST common portal. Jurisdictional details would be intimated to the applicant at this stage.

6.11 In case registration is granted, applicant can download the Registration Certificate from the GST common portal. GST law may provide that GST Registration certificate shall be displayed at the principal place of business of the taxpayer.

6.12 The GST common portal will provide a risk profile to the tax authorities based on the risk parameters made available by the tax authorities. The Central/State tax authorities will also have their own risk profile based on their own risk parameters. It was noted that submission of Adhaar No. cannot be made compulsory. Non –submission of Adhaar No. could be one of the risk parameters for deciding about the post registration physical verification. On the basis of both risk profiles, the jurisdictional officer of tax authorities will take a decision about post registration verification of the application if so provided in the GST Law.

6.13 GST Law Drafting Committee may provide for appropriate provision for imposition of substantial penalty in cases of fraudulent registrations.

7.0 Migration of existing registrants

7.1Existing registrants are those who are either registered with States or with the Centre or with both.

7.2 In case of such registrants, the system shall be designed to migrate cleaned and verified data from the existing database to the GST Common Portal and a GSTIN shall be generated. With regard to the migration of data of the existing registrants, following steps are necessary:

(1) The process of migration of data must be started sufficiently in advance so that the business of existing registrants does not suffer and transition from the present system to GST is smooth.

(2) At present, tax payers are separately registered with State and/ or with Central tax administrations or with both based on their business activity. In the GST regime, a taxpayer will have to obtain State wise registration. Even within a State, the taxpayer may either opt for a single registration or multiple registrations for different business verticals.

(3) Analysis of registration data available with States and Centre conducted by NSDL and GSTN reveals the following:

a) The number of fields in the registration database of various State VAT and CBEC system are different than that finalized for GST. The number of fields varies from 50 to 107 in case of States/Centre whereas GST Registration Form has 120 fields. Thus there is a gap of 13 to 70 fields, meaning that data will have to be collected from the taxpayers.

b) As per report of NSDL, which conducted as is study of State Systems as well as that of CBEC, in majority of cases, the available data does not comply with Metadata and Data Standards (MDDS) of Government of India. This is also confirmed by the feedback received from States in May 2015. Importing such data, which is not MDDS compliant, will lead to wrong or incomplete results on query.

c) The data from States also shows that they do not have scanned copies of supporting documents for mandatory fields like principle place of business, photos of MD or Karta etc. in their database. This again will have to be collected from them.

Since, lots of reports will be using registration database, purity of registration data will be of paramount importance. Migrating half-complete and incorrect data from existing registration databases to GST database will adversely impact the reports and intelligence derived out of it. Thus data will have to be collected afresh from the existing taxpayers. GSTIN can be issued based on State and validated PAN. In case of taxpayers under Excise and VAT, source of data for issuing GSTIN should be VAT data as in most cases Excise assesse will also be registered under VAT. For taxpayers under Service Tax the source of data for issuing GSTIN should be Service Tax.

Out of six mandatory data fields in the GST Registration field, three can be filled up from validated PAN data, namely PAN, name of business, constitution of business. The name of State is known in case of VAT data. The remaining two mandatory data fields namely „Principal Place of Business‟ and „details of promoters‟ will have to be collected from taxpayers along with non-mandatory items. In case of Service Tax, State will have to be collected before generating GSTIN. With this the following process has been suggested:

(4) For Taxpayers Registered under State VAT/Excise

i. GSTIN will be generated by NSDL in case of all VAT TINs where PAN has been validated. Along with a password the GSTIN will be sent to respective State Tax Authorities.

ii. State tax authorities will communicate the GSTIN/password to taxpayers, with instruction to log on the GST portal and fill up the remaining data. State specific data over and above what is contained in the GST Registration Form can be collected after GST registration becomes operational.

iii. The data so collected by GSTN/NSDL will be provided to States so that they can undertake the verification exercise as per their convenience after 1/4/2016 in a staggered manner spread over a period of one to two quarters so that it does affect the working of the tax authorities. This is being suggested as the dealer is already registered with VAT department.

iv. In case, PAN has been validated but the email or mobile numbers of dealers are not available, such dealers may be advised through newspaper advertisement to visit the GST portal and use the following data for user authentication:

1. VAT-TIN

2. PAN

3. Date of Birth/Date of Incorporation in DDMMYYYY format. (This data is available with PAN Database)

i. Date of birth of proprietor in case of Proprietorship firm.

ii. Date of incorporation in case of all other types of dealers.

v. In those cases where PAN has not been validated, State VAT department will have to collect the taxpayers.

(5) In case of Service Tax, the taxpayers are not registered under a State, a different approach will have to be adopted.

I. Since all Service Taxpayers have user ID and password and Service Tax has their email IDs, they may advice the taxpayers to intimate State(s) where they would like to get themselves registered in.

II. Service Tax portal will check from GST portal whether GSTIN has been generated for combination of State and PAN of the taxpayer. If not generated, request GST portal to generate the same.

III. GST portal will generate the GSTIN and communicate to Service Tax, which will be communicated to the taxpayer asking him/her to provide remaining data at GST Portal.

(6) Any verification / updation of the information as outlined above would have to be done by the taxable person within a specified period.

(7) If the verification/updation is not done within the stipulated period, the GSTIN will be suspended till the taxable person does the needful.

(8) Any verification by State / Central authorities can be done after GSTIN is issued.

8.0 Registration of Compounding Dealers

8.1 Dealers below the Compounding ceiling will be provided with an option of availing the Compounding scheme i.e. they can pay the tax at Compounding rate (to be specified) without entering the credit chain.

8.2 Although the Compounding scheme is only a temporary phase before the taxable person starts functioning as a normal taxable person, separate format annexed as Annexure-V has been prescribed for enabling such taxable persons to opt for Compounding scheme. When the taxable person opts for Compounding scheme he should indicate so in the registration form and GST Common Portal would internally flag him as a Compounding dealer. Later on when he goes out of the Compounding scheme due to his turnover crossing the Compounding ceiling (change will be triggered by the tax return values) or he opts out of the scheme (through an amendment application annexed as Annexure-VI), the said flag will be removed and he would continue operating with the same registration number, without undertaking any fresh registration.

9.0 Amendments in the Registration Form

9.1 Capturing registration information is not a one-time activity and any change in critical information should be entered at the common portal within a stipulated time period. Except the fields mentioned in Para 7.2 (7) above, changes to other registration data can be done on self-service basis. The changes to fields mentioned in Para 7.2 (7) above and a change to Compounding scheme will require submission of reasons and prescribed relevant documents, and will be subject to approval by the concerned tax authorities. All amendments in the details in registration application form will be retained in the database of the GSTN and will be made visible to the tax authorities.

10.0 Cancellation/Surrender of registration

10.1 In the following cases, the registration can be either surrendered by the registrant or cancelled by the tax authorities:

(1) Closure of business of tax payer;

(2) Gross Annual Turnover including exports and exempted supplies (to be calculated on all-India basis) falling below threshold for registration;

(3) Transfer of business for any reason including due to death of the proprietor of a proprietorship firm;

(4) Amalgamation of taxable person with other legal entities or de-merger;

(5) Non commencement of business by the tax payer within the stipulated time period prescribed under the GST laws (Suitable provision to be made in the GST law).

10.2 In case of surrender, the system will send an acknowledgment by SMS and e-Mail to the applicant regarding his surrender of registration and he will be deemed to be unregistered from the date of such acknowledgement. There will be a provision in the system to prompt such surrendered registrants to update their address and mobile number at a prescribed periodicity till all dues are cleared/refunds made. Application form for Surrender / Cancellation of registration is annexed as Annexure-IV.

10.3 GST Law drafting committee would make appropriate provision for recovery of arrears, other dues and compliance verification pertaining to past periods.

10.4 The cancellation of registration may be done by tax authorities in the following situations:

(1) In case signed copy of the summary extract of submitted application form is not received even after a reminder;

(2) In case a tax payer contravenes specified provision of the GST law;

(3) In case a taxpayer has not filed any return at all during a predetermined period (say six months). In case a taxpayer has filed a nil return continuously for this period, then the provisions of cancellation will not be applicable.(GST Law drafting committee should provide for the time period for which if there is a continuous failure by a taxpayer to file returns, the registration shall be cancelled)

(4) The cancellation of registration may be preceded by system generated notice giving 7 days‟ time for furnishing reply by the taxpayer. Principle of natural justice to be followed before cancellation, i.e., giving an opportunity to taxpayer to be heard and passing of order.

10.5 If the taxpayer approaches the tax authority for revocation of surrendered or cancelled registration, the surrendered / cancelled registration can be revoked. The action for revocation would be initiated by that Authority which has cancelled the registration or had earlier accepted the surrender of registration.

10.6 The GST Law would contain appropriate provisions relating to revocation / surrender / cancellation of registration.

10.7 The action for revocation / cancellation of registration would have to be initiated by both Centre and State tax authorities. Once the registration is cancelled by one authority it would be deemed to be cancelled by other authority also.

10.8 The cancellation or surrender of registration would always have prospective effect.

11.0 Explanation of the Entries in the Form (should be attached to the Form)

11.1 The critical information / documents required from the applicant while making the application has been outlined in para 6.3 above. Here the manner of organization of the said information in the registration form (Annexure-III) has been explained.

11.2 The form has fields from 1- 21 requiring various details from the applicant. These fields have been organized so that applicant can introduce himself and the nature of his business to the tax authorities in simple interactive manner. To maintain uniformity in the manner of submission of the form, the fields are provided in the standard conventional manner. These can be adopted from the forms notified by the Information Technology department of the Central and State Governments. For example, the legal name can be either a single field or it could be split into first name, middle name and last name. In case there is no standard practice for any of the fields, the same should be developed by the GST common portal. The form is self-explanatory and has online validation facility before the submission of the form. Wherever possible, drop down menu will be provided so that the form is user friendly and there is no dispute about the information submitted.

11.3 The fields marked with asterisk are the critical fields and need to be filled before the form can be submitted to the portal. In case of non-availability of the information such as PAN Number with the applicant, the common portal will direct the applicant to the website of the income tax department where he can submit the application for obtaining the PAN and after obtaining PAN, can apply for registration under GST.

11.4 Fields 1-5 are the basic introductory fields and need no explanation.

11.5 Field 6 is relevant for taxable persons opting for Compounding scheme.

11.6 Field 7 asks for date of commencement of business in the State in which the taxable person is applying for registration. As has been discussed earlier, the taxable person in the GST regime will be required to take State specific single registration for CGST, IGST and SGST purposes (multiple registrations in a state for business verticals are permitted) .

11.7 Field 8 asks for the date on which liability to pay tax has arisen. Field 9 asks for the details of time period for which registration is required by the casual dealers. Field „From‟ – „To‟ – will be mandatory for casual /non-resident dealers in the registration application. For others field „From‟ only would be mandatory. Field 10 captures the reason for such liability. This field would not be enabled in case of registration application by casual/non-resident dealer.

11.8 Field 11 is for the existing registrants. They have to indicate the details of their existing registrations, so that information already available in the respective data bases can be culled out and made use by the tax authorities for granting new registration to the applicant under GST.

11.9 Field 12 asks for the details of the principal place of business of the applicant. Principal place of Business in the State is the place declared by the taxable person, where-

(1) He will make available all the records to the tax authorities when called for.

(2) The tax authorities will serve all the communications, notices, orders etc. and service of the communications, notices and orders at this place will be treated as legal service of such communications, etc.

11.10 Field 13 seeks the details of the Bank Accounts of the applicant. The taxable person is required to disclose the details of all the bank accounts maintained by him for conducting his business.

11.11 Field 14 and 15 ask for the details of top 5 goods or services (in terms of turnover or any other parameter to be specified by the GST Law drafting Committee) which taxable person is supplying or likely to supply.

11.12 Field 16 captures details of the additional places of business. In this field the applicant has to give the details of all the places from where he conducts the business.

11.13 Field 17 asks for the details of Proprietor, partners, Karta, Directors, Member of Managing Committee of Association, Managing trustee etc. of the business depending on the constitution of the business.

11.14 Field 18 asks for the details of the authorized signatory.

11.15 Field 19 asks for the details of authorized representative (TRP / CA/ Advocate, etc.) of the taxpayer.

11.16 Field 20 is kept to capture any State specific information, if so provided in the GST law.

11.17 Field 21 is required to capture the scanned documents (as mentioned in para 6.3. above) required to be uploaded along with the application

11.18 Field 22 is the field for verification and declaration made by the applicant about correctness of the information submitted by him in the registration application.

(Satish Chandra)

Member Secretary

Empowered Committee

of State Finance Ministers

(Rashmi Verma)

Additional Secretary

Department of Revenue

Government of India

 

ANNEXURE-I

CONSTITUTION ORDER OF JOINT COMMITTEE ON BUSINESS PROCESSES FOR GST

EMPOWERED COMMITTEE OF STATE FINANCE MINISTERS

DELHI SECRETARIAT, IP ESTATE, NEW DELHI – 110002

Tel. No. 2339 2431, Fax: 2339 2432 e-mail: vatcouncil@yahoo.com

No.15/45/EC/GST/2014/32

Date: 7th April, 2014

JOINT COMMITTEE ON BUSINESS PROCESSES FOR GST

During the last Empowered Committee meeting held on 10th March, 2014, it was decided that a Joint Committee under the co-convenership of the Additional Secretary (Revenue), Government of India and the Member Secretary, Empowered Committee should be constituted to look into the Report of the Sub-Group-I on Business Processes for GST and make suitable recommendations for Registration and Return to the Empowered Committee. It was also decided that the Joint Committee should also keep in view the Registration and Return requirements necessary for IGST Model. Accordingly, a Joint Committee, in consultation with the Government of India, is constituted with the following members:

Government of India

(1) Smt. Rashmi Verma, Additional Secretary (Revenue) —   Co-convener

(2) Shri P.K. Mohanty, Joint Secretary (TRU-I)

(3) Shri M. Vinod Kumar, Joint Secretary (TRU-II)

(4) Shri J.M. Kennedy, Director (TRU-II)

(5) Director/Deputy Secretary holding the charge of State Taxes Section

States Government

(1) Dr. J.B. Ekka, Commissioner of Taxes, Assam

(2) Shri Prashant Goyal, Commissioner, Trade & Taxes, Delhi

(3) Shri H.V. Patel, Commissioner, Commercial Tax, Gujarat

(4) ShriSudhirRajpal, Commissioner, Excise & Taxation, Haryana

(5) ShriKifayatHussainRizvi, Commissioner, Commercial Tax, J&K

(6) Shri Ajay Seth, Commissioner, Commercial Tax, Karnataka

(7) ShriShyamJagannathan, Commissioner, Commercial Tax, Kerala

(8) ShriAmitRathore, Commissioner, Commercial Tax, Madhya Pradesh

(9) Dr. Nitin Kareer, Commissioner, Sales Tax, Maharashtra

(10) ShriAbhishekBhagotia, Commissioner, Commercial Tax, Meghalaya

(11) Shri Manoj Ahuja, Commissioner, Commercial Tax, Odisha

(12) Shri Sanjay Malhotra, Commissioner, Commercial Tax, Rajasthan

(13) Shri K. Rajaraman, Commissioner, Commercial Tax, Tamil Nadu

(14) Shri M.K. Narayan, Commissioner, Commercial Tax, Uttar Pradesh

(15) ShriDilipJawalkar, Commissioner, Commercial Tax, Uttarakhand

(16) ShriBinod Kumar, Commissioner, Commercial Tax, West Bengal

Empowered Committee of State Finance Ministers

(1) Shri Satish Chandra, Member Secretary          —             Co-convener

2. The Committee will submit its report to the Empowered Committee in two months time.

Sd/-

(Satish Chandra)

Member Secretary

Empowered Committee of State Finance Ministers

Copy to: All the Members of the Joint Committee

Copy also to:

(1) PS to Chairman, Empowered Committee of State Finance Ministers

(2) Adviser to Chairman, Empowered Committee of State Finance Ministers

(3) Sr.A.O./OSD/F.O./A.O., Empowered Committee of State Finance Ministers

 

ANNEXURE-II

LIST OF PARTICIPANTS OF THE MEETING HELD ON 22ND AND 23RD JULY, 2015

Government of India

1. Smt. Rashmi Verma, Additional Secretary (Revenue), Government of India

2. Shri Rajeev Yadav, Director (Service Tax), CBEC, Government of India

3. Shri B.B. Agrawal, Principal Commissioner, CBEC, Government of India

4. Shri Upender Gupta, Commissioner, GST, CBEC, Government of India

5. Shri M.K. Sinha, Commissioner (LTU), Audit, CBEC, Government of India

6. Shri G.D. Lohani, Commissioner, CBEC, Government of India

7. Shri Ravneet Singh Khurana, Deputy Commissioner, CBEC, Government of India

8. Shri Sachin Jain, Additional Commissioner, CBEC, Government of India

9. Shri P.K. Manderna, Superintendent (GST Cell), Government of India

States

1. Shri Gautam Das Gupta, Deputy Commissioner of Taxes, Assam

2. Shri T. Ramesh Babu, Additional Commissioner, Commercial Tax, Andhra Pradesh

3. Shri Arun Kumar Mishra, Joint Secretary, Finance, Bihar

4. Shri Santosh Kumar Sinha, Additional Commissioner, Commercial Tax, Bihar

5. Shri Deepak Kanan, Additional Commissioner, Commercial Tax (GST), Bihar

6. Shri R.K. Trivedi, Additional Commissioner, Commercial Tax, Chhattisgarh

7. Shri Kishor Bhalla, Deputy Commissioner (VAT), Daman & Diu and Dadra & Nagar Haveli

8. Shri Vijay Kumar, Commissioner (VAT), Trade and Taxes, Delhi

9. Shri Jagmal Singh, Deputy Director, Trade and Taxes, Delhi

10. Shri Dipak M. Bandekar, Additional Commissioner, Commercial Tax, Goa

11. Dr. P.D. Vaghela, Commissioner, Commercial Tax, Gujarat

12. Ms. Aarti Kanwar, Special Commissioner, Commercial Tax, Gujarat

13. Shri Shyamal Misra, Commissioner, Excise & Taxation, Haryana

14. Shri Hanuman Singh, Additional Commissioner, Excise & Taxation, Haryana

15. Shri J.C. Chauhan, Commissioner, Excise & Taxation, Himachal Pradesh

16. Shri P.K. Bhat, Additional Commissioner, Commercial Tax, Jammu & Kashmir

17. Smt. Nidhi Khare, Secretary-cum-Commissioner, Commercial Tax, Jharkhand

18. Dr. M.P.Ravi Prasad, Joint Commissioner, Commercial Tax, Karnataka

19. Dr. Rajan Khobragade, Commissioner, Commercial Tax, Kerala

20. Shri M.I. Mansur, Assistant Commissioner, Commercial Tax, Kerala

21. Shri Sudip Gupta, Deputy Commissioner, Commercial Tax, Madhya Pradesh

22. Shri P. Velrasu, Special Commissioner, Sales Tax, Maharashtra

23. Shri B.V. Borhade, Joint Commissioner, Sales Tax, Maharashtra

24. Shri P.M. Kulkarni, Deputy Commissioner, Sales Tax, Maharashtra

25. Shri K. Sanglawma, Commissioner of Taxes, Mizoram

26. Shri H. Rangthanmawia, Superintendent of Taxes (GST Cell), Mizoram

27. Shri Niten Chandra, Commissioner, Commercial Tax, Odisha

28. Shri Sahadev Sahoo, Joint Commissioner, Commercial Tax, Odisha

29. Shri K. Sridhar, Deputy Commissioner, Commercial Tax, Puducherry

30. Dr. Karthik, Additional Secretary, Punjab

31. Shri Pawag Garg, Additional Commissioner, Excise & Taxation, Punjab

32. Shri Vaibhav Galriya, Commissioner, Commercial Tax, Rajasthan

33. Shri Manoj Rai, Joint Commissioner, Commercial Tax, Sikkim

34. Shri D. Soundraraja Pandian, Joint Commissioner (Taxation), Commercial Taxes, Tamil Nadu

35. Shri K. Chandrasekhar Reddy, Additional Commissioner, Commercial Tax, Telangana

36. Shri Vikas Singh, Commissioner of Taxes and Excise, Mizoram

37. Shri Vivek Kumar, Additional Commissioner, Commercial Tax, Uttar Pradesh

38. Shri Abhijit Gupta, Commercial Tax Officer (IT), Uttar Pradesh

39. Shri N.C. Sharma, Additional Commissioner, Commercial Tax, Uttarakhand

40. Smt. Ujjaini Datta, Joint Secretary, Finance, West Bengal

Goods and Services Tax Network (GSTN)

1. Shri Navin Kumar, Chairman, Goods and Services Tax Network

2. Shri Prakash Kumar, Chief Executive Officer, Goods and Services Tax Network

Empowered Committee of State Finance Ministers

1. Shri Satish Chandra, Member Secretary, Empowered Committee

2. Shri Bashir Ahmed, Adviser, Empowered Committee

1 Please refer Para 7 of the Report of the Committee on the Problem of Dual Control, Threshold and Exemptions in GST Regime (Annexure-VIII) 5

2 Refinement to the process for States opting for two-way API based integration and flexibility (decision dated 18.4.2012 of EC) will be formulated separately(Annexure-IX).

3 Refinement to the process for states opting for two-way API based integration and flexibility (decision dated 18.4.2012 of EC) will be formulated separately(Annexure-IX).

4 Please refer para 23 IX. of the report of the Committee on IGST and GST on imports (Annexure-X).

Official Link for Full Report in PDF Format http://dor.gov.in/sites/upload_files/revenue/files/Report_on_GST_Registration_0.pdf

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