Saturday, 31 December 2016

GST registration: Food For Thought

The goods-and-services tax, or GST, will go a long way towards fulfilling Prime Minister Narendra Modi’s pledge to make it easier to do business in the world’s seventh-largest economy. The single tax will help combat evasion, boosting revenue for the government, which is grappling with Asia’s widest budget deficit. It should also help fund investment in public infrastructure, including schools and roads, which could shore up India’s competitiveness longer term


The central government has worked hard to build consensus with the states. This was evident when the government addressed the need to have dispute resolution in the law. The Center also dropped the 1 percent inter-state tax which could have caused distortions and have a cascading effect. Both were issues raised by the Opposition. 





Politics has already delayed this reform for many years. The costs of this delay is real and significant. The annual opportunity cost, due to delay in implementing GST is $20 billion or more. These would be the most conservative estimates, and factor the potential 1-2 percent growth bump that GST is supposed to provide.
GST is a vital and important part of the Transforming India agenda. India’s politics must not come in the way. Mr Rajeev chandrashekhar MP 
The registration process of VAT under GST started on December 15 to December 31 2016. The same shall be followed by Service tax and Excise.

Before visiting the GST system portal, you must have the provisional ID and password given to you by your concerned state authorities.
After the same ID and password is generated along with prefilled form with certain details. However following documents need to be uploaded along with that

  • Proof of constitution of business:
  • In case of partnership deed – partnership deed (PDF or JPEG in maximum file size of 1 MB).
  • In case of others: registration certification of the business entity (PDF and JPEG format in maximum file size of 1 MB)
  • Photograph of promoters/partners/Karta of HUF (JPEG format in maximum file size of 100 KB).
  • Proof of appointment of authorized signatory (PDF and JPEG format in maximum size of 1 MB).
  • Photograph of authorized signatory (JPEG format in maximum file size of 100 KB).
  • Opening page of passbook/statement containing the following information:
  • Bank account number
  • Address of branch
  • Address of account holder
  • Few transaction details

Although the process is paperless but it is duplication of work. When a person who applied for VAT say a year back submitted following documents to VAT department.

- Form No.101 is a format for application and available on web-site. - Dealer is required to fill in the form no.101. - List of supporting documents mandatory for submission. 

1) In case of Proprietorship.

 a) Proof of Ownership of Place of business.

 b) Copy of Passport of Owner. 

c) Copy of election card of Owner. 

d) Copy of Registration certificate issued by Custom and central excise authority.

 e) Copy of driving license of owner.

 f) Copy of last electricity bill of place of business. 

g) Copy of last bill of Property tax of place of business.
 OR
 h) Copy of last telephone bill of place of business. 


2) In case of Private limited or Public limited Company.

 a) Copy of registration certificate issued by Registrar of company.

 b) Copy of Passport of a director.

 c) Copy of election card of a director.

 d) Copy of Registration certificate issued by Custom and central excise authority.

 e) Copy of driving license of a director.

 f) Copy of last electricity bill of place of business.

 g) Copy of last bill of Property tax of place of business.

  h) Copy of last telephone bill of place of business. 

With all documents to be uploaded in 15 days time period was a tough task for professionals. However more than that what surprised everyone is the fact that when VAT department already has the documents and GST ID and password created with same, why documents were again required to be uploaded. 

More than that digital signatures had to be uploaded which could have easily be obtained with Income Tax department. What if a simple form containing all details was generated and the tax payer was asked to verify the details and confirm with digital signatures as uploaded with IT department?

I am writing this as a common professional and this is the voice of majority of them who are registering for GST. They are not complaining because of hard work but because they have immense respect for this government and expect minimum duplicate work as possible

The service tax enrollment shall start from February onwards. If MOF feels that there is some merit in above arguement I shall request them to make required changes.

I apologise if I am at error. However even if it is an error I request MOF to clarify to general public why this had to be followed. Trust me this is only to remove the negative sentiment built around and I shall not appreciate this to linger on

This is voice of a common professional on the street. Hope MOF shall look into it







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