Experts fear e-commerce companies mat end up with multiple registrations because of some provisions

The businesses within India may get online registration within three days of submission of application under the proposed Goods and Services Tax (GST) regime, according to draft rules floated for registration, invoice and payments for the new indirect tax regime by the indirect tax department.

The non-residents, who will come under the purview of GST, will be required to electronically submit the application for registration at least five days prior to the commencement of business and deposit full tax liability in advance, according to these rules.

Experts fear that e-commerce companies mat end up with multiple registrations because of some provisions.

The draft rules were a swift move by the Central Board of Excise and Customs (CBEC) with an eye on the April 1, 2017, roll-out of the new indirect tax regime. The rules, on which comments are sought by Wednesday, are likely to be finalised by the GST Council on Friday.

"We intend to have these rules approved by the GST Council in its meeting on September 30 so that business systems can be modified by all," Revenue Secretary Hasmukh Adhia tweeted.

The draft rules also provide that if a tax official fails to take action on the registration application within a stipulated time frame, the application for grant of registration shall be deemed to have been approved.

The rules also provide for suo motu registration of persons who are liable but have failed to apply for registration.

The draft rules came just three days after end of the first meeting of the GST Council.

According to the draft norms, the applicant seeking registration will have to submit PAN, mobile number and email address on the common portal or through a facilitation centre.

The tax authorities will use the PAN, one-time password and Aadhaar number to verify the details of the applicant.

In case all documents are in order, the tax official will approve GST registration in three working days from the date of submission of the application.

If there are defects in the GST registration application, the applicant has to be intimated within three working days and after receiving clarification, s/he will be granted registration within seven days from the date of receiving the reply.

There will also be a provision to grant separate registrations for business verticals of the same organisation.

The rules also provide for physical verification of business premises after the grant of registration.

Nangia & Co Director Rajat Mohan said, "The government is working enthusiastically and is moving with lightning speed in hitting the bullseye for April 2017."

In all, the CBEC has come out with 17 rules and 26 forms for registration, five rules and one form for invoice and four rules and seven forms for payment.

Invoice rules prima facie prescribed that the number of details should be mentioned in an invoice e.g. description of goods, HSN code of each good supplied, quantity of goods, rate (per item), discount offered, freight, amount of tax (under reverse charge), electronic reference number etc.

These rules also prescribe the transporter need not carry any invoice if the supplier provides invoice reference number to the transporter.

Divyesh Lapsiwala, tax partner, EY India, said some of the provisions such as electronic authentication for registrations, special application for non-resident dealers, and self-updation of non-core details without needing an approval are positive changes.

"Further, it appears that e-commerce companies may end up with multiple registrations due to TCS (tax collected at source) provisions," he said.

THE RULES

• Online registration by residents should be done within 3 days of submission of the application
• Non-residents will be required to electronically submit applications for registration 5 days prior to the commencement of business and deposit full tax liability in advance
• If a tax official fails to take action on registration application within a stipulated time frame, the application shall be deemed to have been approved
• The applicant will have to submit PAN, mobile number, email address on the common portal or through a facilitation centre