Whether all the Registered GSTPs need to clear the Examination?

Relax………. With the latest Press Release dated 17^th September, 2018, the Date of Examination meant for “Confirmation of Enrollment of GSTPs” and Online Registration procedure for the Examination, Online Examination Pattern & Syllabus for Examination are notified. Category (b) GSTPs anxiety is likely to come to a shore.

What about the curiosity of those GSTPs who fall under the Categories of (a) and (c)? Do they also require clearing similar Examination?

Whereas the 2^nd Proviso to Sub-rule (3) of Rule 83 of the CGST Rules is clearly conveyed “that no person to whom the provision of clause (b) of sub-section (1) apply shall be eligible to remain enrolled unless he passes the said examination within a period of one year from the appointed date”, the 1^st Proviso to Sub-rule (3) of Rule 83 of the CGST Rules is, some-what, causing confusion among all those Registered/Enrolled GSTPs as to whether all are required compulsorily to pass the Examination to be conducted by nominated academy?

Such confusion has generated a chronic doubt “as to whether even all those professionals (like Lawyers, CAs and ITPs) who have actually commenced their respective lead Practice with proper enrolment/registration (as applicable to them under those respective Acts & Rules), even before the rollout of GST are required to clear the Examination to be conducted?” among all those Professionals, like-

(1) Practicing Lawyers/Advocates (including Senior-Most among them),

(2) Practicing CAs/CMAs/CSs (including Senior-Most among them), and

[In fact, Practicing Registered Income Tax Practitioners* ought to have included as Item No. (3) above. *Of course, the words “Practicing Registered Income Tax Practitioners” have not been included under the CGST Rules, even-though ITPs & GSTPs extends services to, or regulated by one and the same Ministry of Finance, Government of India].

To arrive at an opinion, we now need to peruse the Rules pertaining to the Goods and Services Tax Practitioners.

The Sub-rule (1) of Rule 83 of the CGST Rules allows following three categories of Registrations, for acting as Goods and Services Tax Practitioners:

(a) Retired Officers of related/relevant Departments,

(b) Sales Tax Practitioners or Tax Return Prepares acted under earlier Law/s for not less than 5 years, and

(c) Graduates, Postgraduates, Practicing CAs/CMAs/CSs and Practicing Lawyers/Advocates.

If we carefully study the eligibility criteria of all the three categories of Enrolments/Registrations meant for Goods and Services Tax Practitioners (GSTPs), we could easily & categorically classify them into just 2 types –

(1) First type is consisting of having some experience in the field (even without having prescribed educational qualification), such as –

a) Those eligible “Retired Officers of relative/relevant Departments”,

b) Those “Sales Tax Practitioners” or “Tax Return Prepares” who acted under earlier Law/s for not less than 5 years,

(2) Second type is consisting of educationally qualified as per the prescribed educational qualifications, such as –

(a) Graduates like B.Com., B.B.A., B.B.M., LL.B., B.L., etc., or recognized as equivalent thereto,

(b) Post-Graduates like M.Com., MBA, MBM, LL.M., M.L., etc., or recognized as equivalent thereto,

(c) Any Graduate or Post-Graduate together with CAs/CMAs/CSs qualification

(d) Practicing CAs/CMAs/CSs

(e) Practicing Lawyers/Advocates

(f) *Practicing “Registered Income Tax Practitioners” (which has not yet been included under the CGST Rules).

Whereas the Certificate of Registration as Goods and Services Tax Practitioner issued under Sub-rule (2) of Rule 83 of the CGST Rules shall be valid until it is cancelled, the Sub-rules (4) and (5) of Rule 83 of the CGST Rules are clearly stating the actual grounds for disqualification of GSTPs and reasons for cancellation, procedure for cancellation & appeal by the aggrieved against such cancellation, etc.

If such is the case, the 2 Provisos given under Sub-rule (3) of Rule 83 of the CGST Rules, may not be applicable to the GSTPs Enrolled/Registered under Second Category i.e., educationally qualified as per the prescribed educational qualifications [vide Clause (c) of Sub-rule (1) of Rule 83 of the CGST Rules].

Further, it is an open view that such examination is mainly meant only for those who are to substitute the actually lacking of their educational qualification prescribed under Clause (c) of Sub-rule (1) of the Rule 83 of the CGST Rules.

Let us understand it clearly. There are just 2 Explanations/2 Provisos given under Sub-rule (3) of Rule 83 of the CGST Rules (which are commonly conveying that unless one passes the examination to be conducted by nominated examining body/board, such person shall not be eligible to remain enrolled as a Goods and Services Tax Practitioner for any long). If we consider the 2 types of enrolments as (1) on experience basis, and (2) on educationally qualified basis, we can presume that (1) having those 2 kinds of enrollments on experience basis are required to substantiate their lacking educational qualification, through the examinations to be conducted, so as to stand on par with those who qualified as per the prescribed educational qualifications [Vide Notification No. 24/2018-Central Tax dated 28.05.2018, the Central Government notified the National Academy of Customs, Indirect Taxes and Narcotics, Department of Revenue, Ministry of Finance, Government of India, as the authority to conduct the examination]. Presently, it has quite clearly mentioned that the GSTPs covered under Rule 83(1)(b) read with second proviso to rule 83 (3) of said rules, are required to pass the said examination].

Further, if we peruse the 2^nd Explanation under, or 2^nd Proviso to Sub-rule (3) of Rule 83 of the CGST Rules, it straightaway conveys “that no person to whom the provision of Clause (b) of Sub-rule (1) of Rule 83 apply shall be eligible to remain enrolled, unless he passes the said examination within a period of *one year from the appointed date”(* later on the words “one year” has been substituted with the words “one and a half year”).

What it concludes to understand that “those who enrolled on experience basis, having acquired such experience on working as Sales Tax Practitioner or Tax Return Preparer during last 5 years are required to substantiate the lacking educational qualification, through the examinations to be conducted by the nominated body, to withstand at par with those who enrolled as per the prescribed educational qualifications”.

If 2^nd Proviso to Sub-rule (3) of Rule 83 of the CGST Rules is applicable to persons to whom the provision of Clause (b) of Sub-rule (1) of Rule 83 only, the 1^st Proviso to Sub-rule (3) of Rule 83 of the CGST Rules ought to be applicable to persons to whom the provision of Clause (a) of Sub-rule (1) of Rule 83 only, because the persons to whom the provision of Clause (a) of Sub-rule (1) of Rule 83 applicable might not be possessing the educational qualification prescribed under Clause (c) of Sub-rule (1) of Rule 83 of the CGST Rules.

If the two Provisos to Sub-rule (3) of Rule 83 of the CGST Rules had numbered/marked as (a) and (b) OR at-least the 1^st Proviso was clearly contained as “applicable to persons to whom the provision of Clause (a) of Sub-rule (1) of Rule 83 only”, there may not be so much confusion. All this confusion lead to opine that there is a glitch in the 1^st Proviso, because it might be outrageous to insist the Senior Most Income Tax Practitioners/Chartered Accountants/Lawyers, etc., to pass the examination, if any, to be conducted in future by the nominated Academy.

In this regard, one can guess or imagine or opine anything according to one’s own views, but what will be binding finally shall be that of the decision to be taken, in this aspect, by the GST Council or the Ministry of Finance, Government of India. Let us wait and see.

– – – – – Syed Mahaboob Peer