The Union government has shown strong determination in implementing a Goods and Services Tax (GST) that will subsume a majority of the present indirect tax levies in India. This paradigm shift in indirect tax is currently underway and the final GST law is expected to be implemented starting 1 July 2017. As part of this change, every taxpayer or assessee registered under the present indirect tax levies and who meets the criteria laid down in the Model GST Law, is required to register under GST.
The registration process involves migration to the GST portal in a phased manner. The process of GST migration for state value added tax (VAT) assessees began in November 2016 and was extended to cover excise and service tax assessees starting January 2017.
Furthermore, the Central Board of Excise and Customs (CBEC) has recently, via a notice on its website, requested assessees to whom a provisional identification has been issued for migration to GST, to complete the migration process by 31 March 2017.
In this FAQ, business and tax consulting firm SKP has summarised some of the relevant aspects for assessees under the GST migration process.
Q) Who is required to register under the GST regime?
Persons required to register under GST can be broadly classified into 3 categories:
(a) Persons having a valid PAN (permanent account number issued for tax purposes) and existing registration under present Indirect tax laws (VAT, service tax or central excise).
(b) Persons crossing threshold limit of turnover of GST or desirous to obtain voluntary registration under GST.
(c) Registration for certain key compliance/specified assessees such as causal traders, persons liable to TDS (tax deducted at source), non-resident persons, etc.
Q) What is GST migration?
GST migration means enrolment of existing Indirect tax assessees (i.e. assessees holding registrations under VAT, service tax or central excise) using the GST portal, in order to transfer such assessee to the GST regime.
Q) What is enrolment?
Enrolment under GST means validating the data of existing taxpayers and filling up the remaining key information fields on the GST portal. In other words, the GST portal requires assessees holding existing registrations under the present indirect tax regime to validate their data as displayed on the GST portal and upload supporting information.
Q) What is last date for enrolment for existing assessees?
As per a notification on the CBEC website, existing assessees have been urged to enrol using the GST website on or before 31 March 2017.
Q) How are existing assesses enrolling on the GST portal?
Assessees have to obtain a provisional identification and password from the state VAT website or ACES website (as the case may be) and use them to access the GST portal. Having accessed or logged into the GST portal the assessee will be required to create a new user ID and password. The assessee can obtain a provisional GST registration number once the new user ID has been created. Subsequently, the assessee is required to upload prescribed information such as proof of constitution of business, director details, etc. on the portal to generate an Application Reference Number (ARN) to complete the application for migration.
Q) What is the provisional ID and provisional GST number?
The provisional ID is a temporary ID provided by current indirect tax authorities to enable existing assessees to access the GST portal for the first time. The provisional GST number is the GST number allotted to the assessee, which will be finalised once the application is processed by the department.
Q) How many provisional IDs shall be granted in case of multiple central excise/service tax registrations on the same PAN in a state?
According to guidance issued by the CBEC, only one provisional ID shall be issued by the central indirect tax authority to assessees holding a valid PAN and not having a provisional ID issued by any state VAT authority.
Q) How many provisional IDs shall be granted in case of centralised service tax registration on the same PAN in multiple states?
As per documents issued by CBEC in relation to GST registration, one provisional ID shall be issued per state (which will cover all premises in that particular state). However, various centralised service tax assessees are facing issues where only one provisional ID is being issued for all premises under the centralised service tax registration. In such a case, given that GST registration is statewise, assessees are contacting the jurisdictional service tax office for a provisional ID and password for premises in different states.
Q) Is it mandatory that the Digital Signature Certificate (DSC) of an authorised signatory should be PAN-based while authenticating the application?
In case the primary authorised signatory is a citizen of India, PAN is mandatory. However, if the primary authorised signatory is not a citizen of India, then PAN is not mandatory but a passport number is. Accordingly, the DSC of the authorised signatory may or may not be PAN-based.
Q) When will the provisional GST number be finalised?
The date of finalisation of a provisional GST number has not been prescribed by the tax authorities as of now. However, as per the Model GST law, the provisional GST number shall be valid for a period of six months from the date of issue, that is, implementation date of GST. Given this, it is likely that the finalisation of applications filed will be concluded within six months from the date of implementation of GST.
Q) Will the provisional GST number change after finalisation?
It is likely that the provisional GST number will not change after finalisation of application.
Q) What is CBEC Mitra?
CBEC Mitra is a new CBEC GST helpdesk which has been launched to provide assistance to assessees who face any difficulty or if they have any query relating to GST registration. This helpdesk is an Interactive Voice Response (IVR) based service and will be operational 24/7. The assessee can email their difficulties/queries to firstname.lastname@example.org or call the helpdesk numbers – CBEC: 1800-1200-232 and GSTN: 0124-4688999
Q) Has the GST registration process been prescribed for assessee who are not registered under the present indirect tax levies regime?
No, the procedure for registration of assessees who are not registered under the present IDT regime has not yet been prescribed.
Q) What do I do if the legal name of the entity as per PAN and service tax or VAT registration is different?
In case of such a mismatch, the GST portal will not be able to generate an ARN. The GST helpdesk suggests that the relevant authority should be contacted to correct such error in name on respective records as well as request the VAT or CBEC authorities for a new provisional ID and password for access to the GST portal. In case of proprietors, the GSTN portal will allow for the name, as per PAN, editable in the application form.
Q) What should I do if I do not want registration under GST?
Some state VAT authorities are accepting an undertaking from assessees who do not want to register under GST regime along with the reason for not migrating or registering. However, presently, no procedure has been prescribed for the same and most of the state VAT authorities as well as CBEC are mandating assessees to register and migrate to the GST portal and opt for cancellation of registration under the GST regime in case they do not want a GST registration.
The above FAQ has been prepared based on the Model GST law (issued in November 2016), Draft GST Registration Rules published in September 2016 combined with a reading of ‘the User Manual for Web portal’ and ‘FAQ on using GST portal’, and other information available on the Central Board of Excise and Customs (CBEC), state VAT and Goods and Services Tax Network (GSTN) web portal.
(Jigar Doshi is an indirect tax partner at consulting firm SKP Group. The article was originally published on BloombergQuint. The views expressed here are those of the author’s and do not necessarily represent the views of The Quint or its editorial team.)