The success of GST would depend to a large extent on a robust GST Network as it will be the medium of sharing information between the tax department and tax payers and one of the important aspects of GSTN would be the registration process.
The assessees covered under the present Indirect Taxes regime require multiple registrations and interaction with multiple departments due to multiplicity of taxes. While everyone expected that these problems would be overcome in the GST regime, the Joint Committee on Business Processes for GST has submitted its report on registration processes in the month of July 2015. The report has been placed in the public domain recently soliciting views from the trade, industry and public. The report has discussed about multiple categories of registrations and the process of obtaining, amending and surrendering registrations has been dealt with in an elaborate manner.
This article seeks to analyse the key features of the report and also suggest changes that would be required to facilitate the process of registration and to make it tax-payer friendly.
B. Salient features of the report are as under:
1. There would be separate categories of registrations for different taxable persons viz., normal taxpayer, taxpayer under compounding scheme, casual dealers, non-resident supplier, input service distributor and unique ID for UN bodies/ governmental authorities and PSUs.
2. Registration would be PAN based.
3. An entity having a single PAN but effecting supplies from multiple States would be required to take registration in each of the States from where the supply is being made.
4. Separate registrations may be taken for different business verticals within the same State. This would be optional and not mandatory.
5. Registration would be provided online without any interaction between the assessee and department except in exceptional circumstances.
6. Registration process has been made time bound.
7. The facility of taking registration through Tax Return Preparer (TRP) and Facilitation Centre (FC) has been introduced.
8. Existing registered assessees can migrate to the new system on submitting additional documentary evidence.
 C. Paper writer’s suggestions/recommendations:
1. It has been provided that separate registration needs to be taken in each of the States by the supplier of goods and services. This will increase compliance burden significantly for the taxpayer especially small dealers. It goes without saying that multiple registration would mean multiple returns and other multiple procedural formalities. This would significantly increase the cost of compliance. Further there are three returns to be filed over a span of few days, which consumes considerable time. The small tax payers, whose numbers are expected to be large in the GST regime would be over burdened due to such increased compliance requirements. Instead, could be a mechanism of granting centralised registration like LTU registration concept presently being followed in central indirect taxes. To facilitate small tax payers, the Government should set up Small Tax Payers Cell/Unit (STPU) for ease of compliance and administration.
2. Obtaining multiple registrations for different verticals within the same State would not be required. Such options lead to confusion and lack of uniformity and should be avoided. Instead, one place should be made principal place while all other places should be added as additional place of business within the same registration certificate.
3. It has been provided in the report that exempted turnover and export turnover shall also be included in calculating threshold limit. This is against the law laid down by the Courts and Tribunal in the present regime. It is suggested that only taxable supply should be taken for computing the threshold limit.
4. Similarly, a dealer would be required to take registration in case he is engaged in inter-State supply and will not be entitled for threshold exemption or compounding scheme benefit. This could create problem for small scale assessees. Instead, it should be provided that in case of a dealer below threshold limits making inter-State B2B supply, liability should be on reverse charge basis on the recipient of goods/service. In case of B2C supply, there should not be any tax. This would waive the requirement for a small dealer to take registration and comply with attendant procedures.
5. In the case of exporters, some alternative mechanism of registration should be permitted with lesser compliance burden like non-assessee registrations presently permitted under the service tax law.
6. Restrictions on credit where a tax payer does not make an application within thirty days of becoming liable to take registration should be removed. Pre-registration purchases should also be allowed for taking credit. It is settled legal position that procedures are handmaid of justice and not the mistress of law.
7. Credit distribution registration should not be limited to services only but should be allowed for goods also as it would assist in cases where centralised procurements are made. GST is supposed to eliminate the cascading effect of taxes and unless credit distribution mechanism is allowed for goods, such an avowed objective would remain unfulfilled.
8. In case of casual dealers, it has been provided that he is required to deposit an estimated tax liability with the department. Such a requirement does not exist in the present central taxes. In fact such a prescription of deposit provides room for corrupt practices and harassment and should be avoided in the GST regime.
9. Time line has been provided in the report for issuance of registration certificate. Though there exist timelines for issuance of registration certificates under current law also these are seldom followed. It is suggested that such time lines indicated should not be merely recommendatory but must be strictly enforced and followed.
10. The process of surrendering registration under current laws is not only tedious but also time consuming. There may be instances where the time taken in completion of such a process would take more than a year. Like timelines for registration time lines should be drawn even for surrender of registration and strictly enforced.
11. As per the report, the registration certificate would provide for submitting details of five HSN Code in case of goods and 5 SAC in case of services. There should be an option of submitting more categories beyond these five so that it would be easier to match the invoice details with the return.
12. In case where a query is raised in the application, the total time period as envisaged in the process would become 17 days (3+7+7). In the intervening period, the assessee may have to raise a tax invoice and charge tax. Hence there should be a provision for granting temporary registration so that a tax invoice can be issued based on such registration number.
13. Post registration verification should be resorted to only in exceptional circumstances with prior approval of a designated senior level officer.
14. No timeline has been stipulated in case of migration of existing registration. This should be clearly provided so that there is no unnecessary delay in granting registration by the tax authorities. In fact, the registration process can start well in advance for such tax payers as they are already registered with various tax departments. This can also be taken up a pilot project before implementing GST.
The registration procedure suggested in the report is likely to result in little human interaction between the assessees/tax payers and the department, which is a welcome step. It is also expected that the registration procedure would be quick and expeditious unlike under the present law where time taken especially for granting centralised registration is long. A major challenge would be for asseesses having multi-State operations where they would be required to take separate registrations resulting in increased compliance burden. The above suggestions/recommendations, we hope, would be considered by the policy makers to simplify the tax compliance procedures in line with the Government’s objective of “ease of doing business” in India.
For doubts mail to: firstname.lastname@example.org or ksnkadv@yahoo,com (The paper writers acknowledge with thanks the valuable inputs received from CA Ashish Chaudhary, while preparing this article)
 Constituted by the Empowered Committee of State Finance Ministers.
 For further information the readers may refer to the book titled ‘Goods and Service Tax – A Primer by Madhukar Hiregange &K.S.Naveen Kumar, published by Wolters Kluwer CCH.
 To cite one instance, see Repro India Limited Vs UOI, 2009 (235) ELT 614 (Bom.).
 CST Vs Auriaya Chamber of Commerce, 1986 (25) ELT 867 (SC). Also see Mportal India Wireless Solutions P.Ltd Vs CST, 2012 (27) STR 134 (Kar.), wherein it was held that registration with the department is not a pre-requisite for claiming credit.
By CA Madhukar N Hiregange & Adv.K.S.Naveen Kumar