OCTOBER 09, 2015

By Pritam Mahure, CA

THE Government on 06.10.2015 has put in public domain the reports on three key Business Processes i.e. registration & returns, payment and refunds in GST regime.

This article attempts to understand and analyse the salient features of the said reports.

1. Report on GST Registration

The report provides that the taxable person in the GST regime will be required to take State specific single registration for Central GST (CGST), Integrated GST (IGST) and State GST (SGST) purposes (multiple registrations in a State for business verticals would also be permitted). In GST regime the registration number would be a PAN based 15 digit alpha numeric registration number.

Registration would be granted through common GST portal. Applicant will be required to apply online and within three working days the State and Centre should raise a query or reject the application. However, 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.

It appears from the report that there will be specific provisions for migration of existing registrations to GST regime. This migration process is expected to start sufficiently in advance to ensure smooth transition.

As regards effective date for registration, the report states that the date of registration will be the date of application in case the registration is obtained within time limit prescribed by GST law. In case there is a delay in applying for registration, the same could result in denying of GST credit son procurements prior to registration.

Report also suggests that voluntary registration is permissible and casual dealers (for conducting a business for a limited period in a State) will have to obtain registration and pay taxes. Further, irrespective of turnover, a person engaged in inter-State supplies or a person liable to GST under reverse charge would be required to compulsorily obtain registration.

The current concept of Input Service Distributor is also expected to continue for distributing the credit of GST paid on 'services' proposed to be used at multiple locations which are separately registered. The report recommends the GST law drafting committee to consider similar provisions for distributing credits on 'inputs'.

The report also provides copy of GST registration application form which contains 21 fields requiring various details from the applicant. Interestingly, the form has listed out 15 business premises /activities wherein registration could be obtained such as manufacturing, wholesale, retail, leasing, Works contract, Special Economic Zone (SEZ) etc.

2. Report on GST Payments

The report provides that the taxable person will be required to make payment of CGST, SGST, IGST and Additional Tax through internet banking. Over the counter (OTC) payment could be permissible only for payments up to Rs. 10,000/- per challan.

For making e-payment of GST, taxpayer will be required to access Goods and Services Tax Network (GSTN) for generation of the Challan where basic details (such as name, address, email, mobile number and GST registration number) of the tax payer will be auto populated in the challan. Once the taxpayer chooses a particular bank for payment of taxes, GSTN will direct him to the website of the selected bank wherein taxpayer will make the payment using the USER ID and Password provided by the bank to enter into the secured e- banking area of his bank.

In the challan the taxpayer will have to use separate accounting codes for making payment of CGST, SGST, IGST or Additional Tax. Further, accounting codes will also be provided for interest, penalty, fees or others payments.

Notably, it is specifically provided that the payment of GST could be made by taxpayer himself or by his Authorised representative on his behalf.

3. Report on GST refunds

This report provides that in ten situations such as exports, excess payment by mistake, refund of pre-deposit, refund to international tourists etc the taxpayer can claim refund of GST paid.

For export of goods, the report suggests that the exporter should procure the goods on payment of appropriate GST and then claim refund of the same from respective Governments. It is also recommended that the option to procure duty free inputs for exported goods should not be available in the GST regime. As regards, deemed exports, the report suggests that deemed exports should be treated at par with exports.

The report also discusses that as a thumb rule, up to 90% of the refund claimed by the taxpayer may be sanctioned automatically by the system and balance amount of refund may be granted after completion of verification.

The report also suggests that refund form should be electronic format and refunds should be granted in a time bound manner and delay in processing of refund should enable assessee to claim interest for such delay.

Way forward

The aforesaid reports also suggest continuation of reverse charge mechanism (including partial reverse charge), pre-deposit, proportionate credit in case of mixed supplies (taxable and exempt) etc. Thus, the taxpayer can savour some nostalgic feelings and goose bumps if they stumble upon a few reproduced excise and service tax provisions in GST regime as well!.

However, this step of the Government to invite comments from the public at large is commendable and shows the Governments conscious efforts for introducing GST.

So, in the days to come, India can hope for a Good and Simple Tax regime!.