Registration of any business entity under Model GST Law (have been referred here as law or Act) implies obtaining a unique number from the concerned tax authorities so that all the operations of and data relating to the business can be processed and agglomerated in seamless manner with a view to allow smooth flow of Input Tax Credit and also ultimately flow of fund in inter sate transactions. Without registration, a person can neither collect tax from his customers nor claim any input tax credit of tax paid by him. In any tax system this is the most fundamental requirement for identification of tax payers ensuring tax compliance in the economy. Registration will confer following advantages to a taxpayer:
• He is legally recognized as supplier of goods or services.
• He is legally authorized to collect tax from his customers and pass on the credit of the taxes paid on the goods or services supplied to the purchasers/ recipients.
• He can claim input tax credit of taxes paid and can utilize the same for payment of taxes due on supply of goods or services.
• Seamless flow of fund from Centre / Exporting States to IGST Fund and then to importing States.
• Seamless flow of Input Tax Credit from suppliers to recipients at the national level.
Liability for Registration:
2. Liability for obtaining registration is explained in Schedule III of draft Model GST law. There will be State-wise registration i.e. GSTIN for CGST, SGST and IGST.
No Centralized Registration in GST:
The Constitutional Amendment Bill empowers both the Centre and the State to levy GST on supply of goods and services. In case taxpayer has business establishments in more than one States and if he supplies goods / services from such business establishments, he shall be liable to pay GST and shall be required to be registered in each State where he has his business establishments. Therefore, there can’t be Centralized registration in GST.
3. Liability for Registration Based on Aggregate Turnover:
3.1 Every supplier shall be liable to be registered under this Law in the State from where he makes a taxable supply of goods and/or services if his aggregate turnover in a financial year exceeds threshold:
• Threshold for registration is [Rs. 20 Lakh]
• Threshold in north eastern States including Sikkim is [Rs. 10 Lakh]
Note: however certain categories of persons will be liable to get registered irrespective of threshold. [See para 5 of Schedule III]
Note: Excluding cases where threshold is not applicable, the liability to pay tax , however, will start only when the registered person reaches a threshold limit of turnover [Rs.10 lakhs] and [Rs. 5 lakhs] respectively. [See section 9 (1)]
What is the meaning of aggregate turnover?
As per section 2 (6) of the Law, aggregate turnover includes the aggregate value of
• all taxable and non-taxable supplies,
• exempt supplies, and
• exports ofgoods and/or service
of a person having the same PAN, to be computed on all India basis and excludes taxes charged under the CGST Act, SGST Act and the IGST Act:
Aggregate turnover does not include:
• value of supplies on which tax is levied on reverse charge basis, and
• value of inward supplies.
3.2 The taxable threshold shall include all supplies made by the taxable person, whether on his own account or made on behalf of all his principals (by an agent).
3.3 The supply of goods, after completion of job-work, by a registered job-worker shall be treated as the supply of goods by the “principal” and the value of such goods shall not be included in the aggregate turnover of the registered job worker.
3.4 Exemption from Registration:
3.4.1 Supplier shall not be liable to registration if his aggregate turnover consists of only goods and/or services which are not liable to tax under this Act.
Examples:
• Taxpayers are engaged in supply of exempted goods.
• Taxpayers are engaged only in supply of goods which are outside purview of GST like liquor, petrol, diesel, crude oil, etc.
• An individual importing service for personal consumption will not be liable to pay GST under reverse charge and therefore not liable to register under GST.
3.4.2 As per section 19 (12) of the Law, the Central or a State Government may, on the recommendation of the Council, by notification, specify the category of persons who may be exempted from obtaining registration under this Act.
3.5 Threshold shall not be applicable to the following categories of persons i.e. they are required to be registered irrespective of the threshold:
i. persons making any inter-State taxable supply, irrespective of the threshold specified under paragraph 1;
ii. casual taxable persons, irrespective of the threshold specified under paragraph 1;
iii. persons who are required to pay tax under reverse charge, irrespective of the threshold specified under paragraph 1;
iv. non-resident taxable persons, irrespective of the threshold specified under paragraph 1;
v. persons who are required to deduct tax under section 37;
vi. persons who supply goods and/or services on behalf of other registered taxable persons whether as an agent or otherwise, irrespective of the threshold specified under paragraph 1;
vii. input service distributor;
viii. persons who supply goods and/or services, other than branded services, through electronic commerce operator, irrespective of the threshold specified in paragraph 1;
ix. every electronic commerce operator, irrespective of the threshold specified in
paragraph 1;
x. an aggregator who supplies services under his brand name or his trade name, irrespective of the threshold specified in paragraph 1; and
xi. such other person or class of persons as may be notified by the Central Government or a State Government on the recommendations of the Council.
3.6 A person may be liable for registration but may not be liable for payment of tax: Threshold for registration is given in paragraph 1 of Schedule III of the Act which is either [Rs. 19 Lakh] or [Rs. 9 Lakh] for north eastern States including Sikkim. However as per proviso to section 9 (1) of the Act, such person may not be considered as taxable person for payment of tax until his aggregate turnover in a financial year exceeds [Rs 20 lakh] or [Rs 10 lakh] for north eastern States including Sikkim. Thus a person may be registered under the Act but may not be liable for payment of tax.
4. Liability to be registered by existing registered person under the earlier law:
Every person who is registered under an earlier law on the day immediately preceding the date of implementation of GST shall be liable to be registered with effect from the day the GST gets implemented.
5. Liability on transfer of business:
5.1 Where a business carried on by a taxable person is transferred, whether on account of succession or any other reason, to another person as a going concern, the transferee, or the successor, shall be liable to be registered with effect from the date of such transfer or succession.
5.2 Where the business is transferred pursuant to sanction of a scheme or an arrangement for amalgamation or, as the case may be, de-merger of two or more companies by an order of a High Court, the transferee shall be liable to be registered with effect from the date on which the Registrar of Companies issues a certificate of incorporation giving effect to such order of the High Court.
Application for Registration:
6. Application for compulsory registration:
6.1 Application for single registration: As per section 19 (1) of the Act, every person who is liable to be registered under Schedule III of this Act is required to apply for registration in every such State in which he is so liable within thirty days from the date on which he becomes liable for registration. The manner to make an application and conditions will be prescribed in the Rules.
6.1.1 As per the proviso to section 19 (1), the persons who are registered under the earlier law shall not be required to apply for fresh registration. Separate procedure for migration will be prescribed in the Rules. However the Input Service Distributors who are registered under an earlier law shall be required to apply for fresh registration.
What is the meaning of Input Service Distributors?
As per section 2 (56) of the Act, ” Input Service Distributor” means an office of the supplier of goods and / or services which receives tax invoices issued under section 23 towards receipt of input services and issues tax invoice or such other document as prescribed for the purposes of distributing the credit of CGST or (SGST in State Acts) and / or IGST paid on the said services to a supplier of taxable goods and / or services having same PAN as that of the office referred to above;
Explanation.- For the purposes of distributing the credit of CGST (SGST in State Acts) and / or IGST, Input Service Distributor shall be deemed to be a supplier of services. As per the decisions taken by the GST law Committee:
1. There shall be separate registration for ISD (i.e. a taxable person shall not have a single registration for ISD & for his normal business activity).
2. A taxable person can have multiple ISDs across the country.
6.2 Application for multiple registrations: As per section 19 (2) of the draft law, a person having multiple business verticals in a State may be allowed to obtain a separate registration for each business vertical. Conditions for having multiple registrations will be prescribed in the Rules.
7. Application for voluntary registration: As per section 19 (3) of the Act, a person who is not liable to be registered under Schedule III, may apply for voluntary registration. The person who gets himself registered voluntarily shall be liable for payment of tax.
8. Failure to apply for registration: As per section 19 (5) of the Act, a person, who is liable to be registered under this Act, fails to apply for registration, the tax authority will proceed to register such person. The manner to grant registration will be prescribed in the Rules.
Procedure for obtaining Registration:
This procedure is based on the report of Business Process for GST on GST Registration, which has been approved by the Empowered Committee. the rules are yet to be finalised. For obtaining registration, all the taxable persons shall interact with tax authorities through a common portal called GST Common Portal 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 the States.
New applicant can apply for registration:
1. at the GST Common Portal directly; or
2. at the GST Common Portal through the Facilitation Center (FC)
The process highlighted in the paragraphs below is applicable for new applicants for registration, both mandatory and voluntary.
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.
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.
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).
Following scanned documents are required to be filed along with the application Registration:
Document required to be uploaded
Constitution of Business
- No documents are required in case of proprietors and companies (Verification through PAN/Company Identification Number through MCA 21).
- Partnership Deed in case of partnership firm and Registration Certificates in case of society, trust etc. as details are not captured in PAN.
Principal Place of business
- 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.
- Rented or Leased premises: Consent Letter, duly notarized, obtained from the Lessee of the premises, where the main lease allows sub-lease.
- In the absence of consent letter, rent receipt in respect of the relevant premises may be accepted with ownership proof of the property.
- Where ownership proof is not available, proof of possession by certain prescribed documents (such as Certificate issued under Shop and Establishment Act, electricity bill, telephone bill, bank account showing address proof, etc.) would suffice.
- An affidavit in a prescribed format may be taken along with any of the other documents mentioned above where ownership proof or lease agreement is not available.
Details of Bank Account (s)
- Any documents that contain the details like the Account No., Name of the Account Holder, MICR and IFS Codes and Branch details. This can include documents like (a) self-certified copy of the online banking details; (b) bank statement / cancelled cheque; (c)Also certificate issued by concerned Bank.
- Required for all the bank accounts through which the taxpayer would be conducting business.
Details of Authorised Signatory
- Letter of Authorisation and copy of Resolution of the Managing Committee or Board of Directors to that effect.
- 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.
Photographs only in .jpg and .png format
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.
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 21 and other numbers issued by other Departments through inter-portal connectivity before submission of the application form. Taxpayer 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).
All applications are required to be uploaded online with DSC/E-signature/ EVC. Applicant is not required to send a signed copy of the summary extract of submitted application form. Centralized Processing Unit is not required for collection of a signed copy of the summary extract of submitted application form. In case of EVC (Electronic verification code), post /pre site verification of the business premises would be done.
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.
The 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 ‑
> Uploaded scanned documents;
> State specific data and documents;
> Details if the business entity is already having registration in other States. This should also include GST compliance rating
> Details of the PAN(s) of individuals mentioned in the application which are part of the other GST registrations;
> Acknowledgment number stated in para 6.7 above;
> Details of any record of black-listing or earlier rejection of application for common PAN(s).
> 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 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.
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.
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.
5. The tax authorities in the Centre and State would have a period of 7 common working days to respond to the application, either conveying approval or raising a query. In case any of the authority neither rejects the application nor raises 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.
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.
In case registration is granted, applicant can download the Registration Certificate from the GST common portal. Provisions in GST rules shall be made such that GST Registration certificate is required to be displayed at the principal place of business of the taxpayer.
Prerequisite for registration:
9. As per section 19 (4) of the Act, a Permanent Account Number (PAN) issued under the Income Tax Act, 1961 (43 of 1961) is necessary and required to be provided (in application form) to obtain registration. As per section 19 (4A) of the Act, documents other than PAN will be prescribed for non-resident taxable persons to obtain registration.
As per the report of Business Process for GST on GST Registration, which has been approved by the Empowered Committee:
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.
As per the decisions taken by the GST law Committee:
When PAN gets cancelled, GSTIN should not get cancelled automatically. GSTN may get this information periodically and convey the information to tax authorities for appropriate action.
Unique Identity Number for certain categories of person:
10. As per section 19 (6) of the Act, following categories of persons will be required to obtain a Unique Identity Number (UIN):
> any specialized agency of the United Nations Organization or any Multilateral Financial Institution and Organization notified under the United Nations (Privileges and Immunities) Act, 1947 (46 of 1947),
> Consulate or Embassy of foreign countries and
> any other person or class of persons as may be notified by the Board / Commissioner,
Manner to obtain registration will be prescribed in the Rules. The purpose of granting UIN is to provide refund of taxes on the notified supplies of goods and/or services following international conventions and treaties. Granting UIN to certain class of persons also helps to ascertain that due amount of credit of IGST comes to the importing States through IGST mechanism.
Other legal aspects to grant registration:
11. As per section 19 (7) of the Act, granting or rejection of registration or UIN shall be carried out after due verification. Period and procedure for verification will be prescribed in the Rules. As per section 19 (9) of the Act, if no deficiency has been communicated to the applicant by tax authority within that period, a registration or UIN shall be deemed to have been granted.
As per the report of Business Process for GST on GST Registration, which has been approved by the Empowered Committee:
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.
12. As per section 19 (8) of the Act, before rejecting an application for registration or UIN, a person shall be given a show cause notice (SCN) and a reasonable opportunity of being heard.
13. As per section 19 (8A) of the Act, a certificate of registration shall be issued in the prescribed form, with effective date. Effective date of registration under different circumstances will be prescribed in the Rules.
As per the report of Business Process for GST on GST Registration, which has been approved by the Empowered Committee:
Each taxpayer will be allotted a State wise PAN-based 15-digit Goods and Services Taxpayer Identification Number (GSTIN). 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 |
State Code: 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.
13th digit: 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.
14th digit: 14th digit of GSTIN would be kept BLANK for future use.
Effective date of registration:
With respect to effective date of registration, the following decisions have been taken by the GST law Committee:
1. Effective date of registration shall be date of liability, if the application for registration is filed within 30 days from the date on which the taxpayer becomes liable to pay tax (in case of circumstances given in paragraph 5 in the Schedule III).
2. Effective date of registration shall be the date on which the registration is granted by the tax authority if taxpayer doesn’t apply for registration within time. The liability of taxpayer to pay tax will be from the date of liability but he will be eligible for ITC from the date of registration only. The recipient of supplies (from such supplier) made during the period will not be entitled for ITC, as such a supplier would not be eligible to issue revised tax invoice.
3. The ITC on inputs held in stock will be permitted only if the taxpayer has applied for registration within 30 days from the date he became liable for registration (Section 16 (2))
4. As per section 27A, a person is required to file the first return for a period starting from date of liability till last date of the tax period in which the registration has been granted.
5. As per proviso to section 23, new registrant would be permitted to issue the revised tax invoices in lieu of the invoices already issued during the intervening period i.e. the period from date of liability till the date of grant of registration.
6. The new registrant would be allowed to avail the ITC without matching of invoices on a manual basis provided he satisfies the conditions laid down in Section 18.
14. As per section 19 (10) of the Act, any rejection of application under any of the Act shall be deemed to be a rejection of application under both the Acts. As per section 19 (11) of the Act, registration or UIN shall be deemed to be granted under both the Acts.
Special provisions relating to casual taxable person and non-resident taxable person
15. As per section 19A (1) of the Act, the certificate of registration issued to a casual taxable person or a non-resident taxable person shall be valid for a period of 90 days. On request of such person, this period may be extended by a further period not exceeding 90 days.
What does it mean by a casual taxable person?
As per section 2 (21) of the Act, a casual taxable person means a person who occasionally undertakes transactions involving supply of goods and/or services in the course or furtherance of business whether as principal, agent or in any other capacity, in a taxable territory where he has no fixed place of business;
What does it mean by a casual taxable person?
As per section 2 (69) of the Act, a non-resident taxable person means a taxable person who occasionally undertakes transactions involving supply of goods and/or services whether as principal or agent or in any other capacity but who has no fixed place of business in India;
16. As per section 19A (2) of the Act, a casual taxable person or a non-resident taxable person shall, at the time of submission of application for registration, be required to make an advance deposit of tax in an amount equivalent to the estimated tax liability for the period for which the registration is sought. In case any extension of time is sought, he shall be required to deposit an additional amount of tax equivalent to the estimated tax liability for the period for which the extension is sought.
17. As per section 19A (3) of the Act, such deposit shall be credited to his electronic cash ledger and shall be utilized in the manner provided under section 35.
Penal provision for not applying for registration:
18. As per clause (x) in section 66 (1) of the Act, where a taxable person who is liable to be registered under this Act but fails to obtain registration, he shall be liable to a penalty of:
1. Rs. 10,000/- or an amount equivalent to the tax evaded or the tax not deducted or short deducted or deducted but not paid to the Government or
2. input tax credit availed of or passed on or distributed irregularly, or 3. the refund claimed fraudulently,
whichever is higher.
Amendment of registration
19. As per section 20 (1) of the Act, registered taxable person shall be required to inform the tax authority of any changes in the information furnished at the time of registration, or that furnished subsequently. The manner and time period to inform the tax authority for such amendment will be prescribed in the Rules.
20. As per section 20 (2) of the Act, tax authority may either approve or reject amendments. The manner and time period for approval or rejection of amendment will be prescribed in the Rules. However for certain changes in the particulars or information, approval from tax authority shall not be required. Such particulars will be prescribed in the Rules.
Proposed registration form is annexed as Annexure that is given in the report of Business Process for GST on GST Registration. Fields marked by asterisk in the form are mandatory fields and must be filled by the applicant
Total 6 mandatory fields (with * asterisk sign)
3 (Three) fields i.e.
> PAN
> Name of Business,
> Constitution of Business:
can be filled from validated PAN data
4th field i.e. Name of State:
5th& 6th field i.e.
> Principle place of business
> Details of promoters
Based on the principal place of business, the applicant has facility to select his State as well as Central Jurisdiction and based on that information the application would be pushed to the concerned authority. In case of the wrong selection, the concerned authority can forward the same to correct authority through his login.
All remaining fields are non-mandatory items.
For changes in the non-mandatory items, approval from tax authority shall not be required.
21. As per section 20 (3) of the Act, before rejecting an application for amendment, such person shall be given a show cause notice (SCN) and a reasonable opportunity of being heard.
22. As per section 20 (4) of the Act, any rejection or approval of amendments under any of the Act shall be deemed to be a rejection or approval of amendments under both the Acts.
Cancellation of registration
23. As per section 21 (1) of the Act, Registration may be cancelled either (i) by the tax authority or (ii) by the registered taxable person or (iii) by his legal heirs, in case of death of such person in the following circumstances:
> the business has been discontinued, transferred fully for any reason including death of the proprietor, amalgamated with other legal entity, demerged or otherwise disposed of; or
> change in the constitution of the business; or
> the taxable person (other than the person who applied for registration voluntarily under sub-section (3) of section 19) is no longer liable to be registered under Schedule III.
The manner for such cancellation having regard to the above circumstances will be prescribed in the Rules.
As per the report of Business Process for GST on GST Registration approved by the EC:
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.
24. As per section 21 (2) of the Act, registration of the taxable person may be cancelled by the tax authority from the date, including any anterior date in the following cases:
> registered taxable person has contravened the provisions of the Act /the rules; or
> a taxable person paying tax under section 8 has not furnished returns for three consecutive tax periods; or
> any taxable person, other than paying tax under section 8, has not furnished returns for a continuous period of six months; or
> any person who has taken voluntary registration under sub-section (3) of section 19 has not commenced business within six months from the date of registration.
25. As per section 21 (3) of the Act, registration of the taxable person may be cancelled by the tax authority with retrospective effect in case where any registration has been obtained by means of fraud, willful misstatement or suppression of facts.
26. As per section 21 (4) of the Act, before cancelling the registration, such person shall be given a show cause notice (SCN) and a reasonable opportunity of being heard.
27. As per section 21 (6) of the Act, the cancellation of registration under any of the Act shall be deemed to be a cancellation of registration under both the Acts. As per section 21 (5) of the Act, the cancellation of registration shall not affect the liability of the taxable person to pay tax and other dues under the Act.
28. As per section 21 (7) of the Act, due to cancellation of registration, taxable person shall pay by way of debit in the electronic credit or cash ledger
(a) In case of inputs:
(1) an amount equivalent to the credit of input tax in respect of:
(i) inputs held in stock and
(ii) inputs contained in semi-finished or finished goods held in stock or
(2) the output tax payable on such goods
whichever is higher, calculated in the manner prescribed in the rules
(b) In case of capital goods:
(1) an amount equal to the input tax credit taken on the said capital goods reduced by the percentage points as may be prescribed in this behalf
or
(2) the tax on the transaction value of such capital goods under sub-section (1) of section 15,
whichever is higher.
Calculation shall be made in accordance with generally accepted accounting principles. The manner shall be prescribed in the Rules.
Revocation of cancellation of registration
29. As per section 21 (7) of the Act, the registered taxable person, whose registration is cancelled by the tax authority can apply for revocation of cancellation of the registration within thirty days from the date of service of the cancellation order. The manner shall be prescribed in the Rules.
30. As per section 22 (2) of the Act, the authority may either revoke cancellation of the registration or reject the application for revocation. The manner and time period for revocation or rejection of the application will be prescribed in the Rules.
31. As per section 22 (3) of the Act, before rejecting an application for revocation of cancellation of registration, such person shall be given a show cause notice (SCN) and a reasonable opportunity of being heard.
32. As per section 22 (4) of the Act, revocation of cancellation of registration under any of the Act shall be deemed to be a revocation of cancellation of registration under both the Acts.
Migration of existing taxpayers to GST
33. Issuance of registration on a provisional basis: As per section 142 (1) of the Act, every person registered under any of the earlier laws shall be issued a certificate of registration on a provisional basis. The manner of issuing the registration will be prescribed in the rules.
34. Validity of registration: As per section 142 (2) of the Act, such certificate shall be valid for a period of six months from the date of its issue. However the said validity period may be extended for such further period as the Central/State Government may, on the recommendation of the Council, notify.
35. Furnishing information: As per section 142 (3) of the Act, the person to whom a certificate of registration has been issued shall, within the period specified under section 142 (2), furnish the information as prescribed in the rules.
36. Issuance of registration on a final basis: As per section 142 (4) of the Act, on furnishing of such information, tax authority shall issue the certificate of registration on a final basis.
37. Cancellation of registration: As per section 142 (5) of the Act, if the person to whom the registration is issued on a provisional basis fails to furnish information in a specified time, his certificate of registration will may be cancelled.
38. As per section 142 (6) of the Act, the certificate of registration issued on a provisional basis shall be deemed to have not been issued if the said registration is cancelled in pursuance of an application filed by such person that he was not liable to registration under section 19.
As per the report of Business Process for GST on GST Registration, which has been approved by the Empowered Committee, separate procedure for migration of existing registrants is given:
For existing registrants who are either registered with States or with the Centre or with both, the system shall be designed to migrate the 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 numbers 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:
For Taxpayers Registered under State VAT/Excise
1. GSTIN will be generated by NSDL in case of all VAT TINs where PAN has been validated on provisional basis. Along with a password the GSTIN will be sent to respective State Tax Authorities.
2. 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.
3. The data so collected by GSTN/NSDL will be provided to States so that they can undertake the verification exercise as per their convenience 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.
4. 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:
a. VAT-TIN
b. PAN
c. Date of Birth/Date of Incorporation in DDMMYYYY format. (This data is available with PAN Database)
d. Date of birth of proprietor in case of Proprietorship firm.
e. Date of incorporation in case of all other types of dealers.
f. In those cases where PAN has not been validated, State VAT department will have to collect the taxpayers.
For Taxpayers Registered under Service Tax
For the taxpayers who are not registered under a State, a different approach will have to be adopted.
1. 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.
2. 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.
3. 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.
Any verification / updation of the information as outlined above would have to be done by the taxable person within a specified period.
If the verification/updation is not done within the stipulated period, the GSTIN will be suspended till the taxable person does the needful.
Any verification by State / Central authorities can be done after GSTIN is issued.
