Exclude Input Service Distributors from Rule 1 of GST Registration Rules : ICAI – GST Rules Issue 30

By | May 11, 2017
(Last Updated On: May 11, 2017)

Exclusion of Input Service Distributors (ISD) & OIDAR

Rule 1(1) of draft GST Registration Rules provides that every person (other than a non-resident taxable person, a person supplying online information and data base access or retrieval services from a place outside India to a non-taxable online recipient referred to in Section 14 of the Integrated Goods and Services Tax Act, a person required to deduct tax at source under Section 51 and a person required to collect tax at source under Section 52 ) who is liable to be registered under sub-section (1) of Section 25 and every person seeking registration under sub- section (3) of Section 25 (hereinafter referred to in this Chapter as “the applicant”) shall, before applying for registration, declare his Permanent Account Number (PAN), mobile number, e-mail address, State or Union territory in Part A of FORM GST REG-01 on the Common Portal either directly or through a Facilitation Centre notified by the Commissioner.

Issue

• ISD does not avail credit nor charge tax. Hence registration process of ISD must be distinct from that applicable to taxable persons.

• Rule 1(1) excludes “a person supplying online information and data base access or retrieval services from a place outside India to a non-taxable online recipient referred to in Section 14 of the Integrated Goods and Services Tax Act” from the list of applicant.

Section 14 of the IGST Act contains the phrase “supply of online information and database access or retrieval services by any person located in a non-taxable territory and received by a non-taxable online recipient”.

Suggestions

• It is suggested that ISD be also included in the excluded list and separate registration provisions be provided for ISDs.
• It is suggested that the words “place outside India” in Rule 1(1) be replaced by “non-taxable territory” to make both the provisions aligned with each other.

Source ICAI Suggestions on GST Rules Submitted to Govt of India

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