Reetu | Jan 26, 2022 |
Tax Professionals Made Representation to FM for Standard Process for GST Registration
The All Gujarat Federation of Tax Consultants (AGFTC) and Income Tax Bar Association (ITBA) made representation to Finance Minister Nirmala Sitharaman for Standard Process for GST Registration.
The Representation is Given Below :
To
Smt. Nirmala Sitharaman
Minister of Finance and Corporate Affairs,
Government of India
Respected Sir(s) / Ma’am
Subject: Representation with respect to hardships being faced while obtaining new GST registration number & Request to issue suitable SOP and Trade Notice or Circular or Guidelines with respect to new GST registration.
Greetings from the All Gujarat Federation of Tax Consultants and Income Tax Bar Association, Ahmedabad.
All Gujarat Federation of Tax Consultants (AGFTC) established in the year 1992, is the first & only Apex Regional Body of Advocates, Chartered Accountants & Tax Practitioners of Gujarat, having membership strength of 1500 professionals and Institutional membership of 34 from all the Districts of Gujarat.
Income Tax Bar Association is one of the first professional associations established in the year 1947, and composed of tax professionals, Advocates & Chartered Accountants as members, with membership strength of approx. 950 from all over Gujarat.
The prime objective of both these Associations is not only to work for the cause of its professionals but also to educate the public at large and to act as a catalyst between Citizens & Government Authorities.
AGFTC regularly organizes seminars, lectures on tax advocacy and legal awareness in Mofussil regions across Gujarat.
GST, as we all know, is the backbone of all businesses. For any activity from Manufacturing, Trading to Service providers, obtaining GST number is necessary to carry out business and grow it. Furthermore, these GST-registered individuals contribute directly to the national exchequer’s revenue and GDP.
Following the implementation of GST in July 2017, all applications for new registration numbers must be submitted through the GST common portal (www.gst.gov.in), which is a centralised platform for the entire country. The form includes fields for various information needed for GST registration, as well as uploading documents in the form of a Registration Certificate, Photo of Responsible Person(s), Letter of Authority or Resolution (if applicable), and Address Proof of Principal Place of Business and Additional Place of Business, with file sizes ranging from 100 KB to 2 MB for various fields and depending on the document type selected.
Apart from that, it requires OTP-based confirmation of Primary e-mail ID and Mobile Number, as well as PAN verification from the CBDT database for each and every person. There is also the option of submitting the application through the UIDAI database with Aadhar Verification (e-KYC) of the Primary Authorized Person.
This application then goes through the workflow of an officer of the SGST or CGST with jurisdiction in the area specified in the application (based on the location of the principal place of business), who has the authority to grant registration based on the submitted application and attached documents, or to raise queries and request additional documents in relation to such registration, or to reject the application for registration.
In the case of Aadhar authentication, the time period for approval or seeking additional information, clarification, or documents relating to the application is 7 (seven) working days from the date of submission of the application, and 30 (thirty) working days in the case of non-Aadhar authentication.
1. Limitations on the Application Form: The application form has fixed fields for providing information and limits the quantity of documents that can be uploaded. It’s 100 KB for the majority of the fields. There is a limit of 100 KB for electricity bills and 2MB for rent agreements when uploading papers in support of the principal place of business.
As a result, a person can submit only a few data at the time of application, even if he or she is capable of providing more details, which are frequently requested by department officials.
2. Legal Documents and Scanning Limits: Scanning documents and resizing them in 100 KB or 2 MB is a difficult task for most tax professionals and individuals. It is not even technically possible to scan or reduce clear and legible copies of rent agreements, lease deeds, and other documents that can give details about property ownership, which due to legal provisions runs into multiple pages.
It necessitates a modest level of technical understanding as well as good and advanced gear in the form of scanners capable of producing compact, legible scanned copies under 2 MB. Everyone, especially those at the bottom of the pyramid, finds it too challenging.
3. No Definite List of KYC / Registration Documents: In the GST, there is no definitive list of KYC requirements for identification and address, as well as business registration documents. This creates a new issue in which officials request KYC paperwork based on their own preferences, even if the applicant has already supplied proper KYC / Registration documents.
As an interesting example, the Ministry of Corporate Affairs has combined registration under the GST Act, PF, and ESIC, as well as company establishment, under the category of ease of doing business (through form AGILEs). There have been numerous instances where SGST officers have raised questions or even refused to provide GST registration based on the identical documents on which the company was incorporated after MCA examination.
4. Officers requesting irrelevant information or documents: All tax professionals’ recent experiences are nearly identical: an application is filed, a notification is issued requesting clarification or additional information, or documents are issued with a few completely irrelevant data requested. In fact, rather than using their heads, each officer asks for details and paperwork based on whims.
Here are a few of the examples:
There is no end to the list, thus it is much longer. We have included a sample of such notices collected from association members for your reference and to emphasise the gravity of the situation in which we are moving in the exact opposite direction of ease of doing business, even before obtaining the most basic registration for carrying on business.
We wish to underline that all of the inquiries are irrelevant, as are the fields for such things in the GST registration scheme, which are not provided at all.
5. Problems with Spot Visits: Officers conducting spot visits ask for documentation in an unreasonable manner. In the lack of an uniform set of papers list, each officer has his own list. Members have reported situations where businesspeople are asked to have their photos taken with the business premises during a spot inspection. In certain circumstances, visits are made at unusual hours, and applications are refused while the premises are closed.
6. Residential Premises Registration Rejected: The officials are severe and deny applications for GST registration at residential premises. Service providers, in particular, who work from home and provide services, and who do not need to use commercial premises at all, encounter difficulties as a result of this. “NOC from the secretary of the residential society,” “permission from the municipal corporation to conduct commercial activity from residential premises,” and other similar requests are made in some instances.
Furthermore, this demand by GST officers is in contravention of Article 19(1)(g) of the Constitution (Right to practise any profession or to carry on any occupation, trade or business to all citizens). The applicant may be needed to obtain a Shop & Establishment or Professional Tax registration, or other similar registration as required by the local body, however requesting a Commercial Tax Bill or an Electricity Bill is completely outside the scope of GST authorities.
7. Extensive Delay in Granting Registration: GST registration is one of the most essential company requirements. It is also the officers’ fiduciary duty to support an environment in which commerce, company, or profession can thrive without impediment. However, in the vast majority of situations, businesspeople have a poor experience with the first step – GST registration. Almost always, the notice asking explanations is given by default, extending the time restrictions stipulated (7 working days) excessively and without the person’s fault.
When officials are asked about the issue at the local level, the most prevalent response is that this exercise is being done to prevent dummy registrations, which fuel the department’s Bogus Billing problem, which is a very severe problem.
This exercise, on the other hand, becomes a nightmare for trade and business in general. As a general rule in criminal law, it is preferable for 10 guilty people to go free than for one innocent person to suffer. When it comes to GST, however, there is a 99-day grace period so that anyone with a malicious motive can be caught.
Instead of making things complicated for everyone, proper verification and risk management systems can be put in place to avoid such incidents now that we are in the twenty-first century and the government is pushing Artificial Intelligence and Risk Management as inbuilt tools for tax compliance systems.
To find a balance between the plight of taxpayers and tax experts and the department’s problems.
In case of any Doubt regarding Membership you can mail us at [email protected]
Join Studycafe's WhatsApp Group or Telegram Channel for Latest Updates on Government Job, Sarkari Naukri, Private Jobs, Income Tax, GST, Companies Act, Judgements and CA, CS, ICWA, and MUCH MORE!"
