Article on Transition Process of Registrations under VAT / Service Tax Laws to GST Law

[Anuj Bansal]

As we are all aware that constitutional amendment for implementing GST Law has got nod in Rajya Sabha. Now we are looking forward to welcome GST Law to have brighter India with one law subsuming number of indirect tax laws like Entry Tax, Octroi, etc. The whole India is cherished and welcoming the GST Law by making different - different interpretations.  But at the back of the mind, industry is worried about the applicability of law, transition process and compliances under GST Law. In this note I am discussing the first step to enter into the GST Law i.e. the registration process. The scope of the note is limited to transition provision of registration for the dealers who are presently registered in various states under VAT, Excise or Service Tax laws.

The Govt. has ensured that they will migrate the existing registrations, whether under the State Laws or Central Laws, to GST Law. But the challenges which are there in the present registration forms under various laws, the fields in the application for registration vary from 50 – 107 (vary from state to state). But under GST Law, in the application form there are 120 fields, therefore, further details would be required to be captured by the department while migrating registration from existing laws to GST Law. Moreover, in most of the states scanned copy of documents are not uploaded with application which would be required under GST Law. In such circumstances, it has been recommended by the Joint Committee of Business Processes in its report of July 2015 that data may be collected afresh from the existing tax payers. Though while collecting the fresh data, most of the fields would be automatically filled like PAN data, name of the business, constitution, etc. The details of the same would be picked from the PAN details of the dealers with Income-tax Department.

However, in order to avoid business discontinuity  or in other words, for smooth   sailing of business  present VAT registration  would be converted  to GSTIN (Registration Number under GST) and the circumstances where the VAT registration is not there with the tax payer, the existing  Service Tax  Number would be converted to GSTIN. However, initially a provisional registration will be issued and remaining information would be required to be filed within 6 months.

VAT Registrations will be converted to GSTIN

Process for migrating the VAT TIN numbers to GSTIN will be as follows:

• The dealers who are presently registered under VAT law and having TIN numbers, GSTIN will be generated after validating PAN from Income-tax Department.
• Such GSTIN will be sent by GSTN (GSTN is a company providing IT infrastructure) to respective state authorities. 
• The state authorities will communicate GSTIN and password to the tax payers.
• Instructions will also be issued to the dealers to fill the remaining details as may be required.
• The above process will not in any way stop the operations of the business and throughout the process dealer would be using GSTIN and may provide the details / data in the specified time i.e. 6 months.
• The data would be provided / filled by the dealer on the portal of GSTN and GSTN will provide such data to the state for verification.

In the cases where the PAN is validated  but email and mobile number are not validated, the dealer may visit the portal of GSTN and open his account  by using the VAT TIN number, PAN and date of birth (date of incorporation) and validate email and mobile number.

But in the case where the PAN is also not validated it would be the responsibility of the state to collect the PAN from the tax payers.

Where the dealers are not registered under VAT laws but registered under Service Tax laws, Service Tax Registration no. will be converted to GSTIN

In the circumstances, where the dealer is registered under Service Tax law but not under VAT laws, process for migrating the Service Tax Registration No. (STC) to GSTIN will be as follows:

• The department would be having email of the dealer. Department will advise the tax payers on email to intimate about the states where the assessee wants to get GSTIN.
• Once the details are received from the dealer about the states where dealer want to have GSTIN. Thereafter, the Service Tax portal will check with GSTN whether GSTIN is already generated or not generated by the dealer, in the states mentioned by the tax payers.
• In case GSTIN is not generated, GSTN will generate GSTIN for each of the state for that tax payer and will communicate to the tax payer and Service Tax Department.
• The tax payer will also be required to fill other data within six months and if the date is not filled in the specified time period, the GSTIN will be cancelled.

It is stated that the government is trying to make a smooth conversion from VAT regime to GST Regime. The take of the note for the industry is that all VAT registration numbers should have updated PAN, Email and Mobile Nos. Once, the system finds your PAN number, it will automatically convert your TIN to GSTIN. Otherwise, getting into the GST system and updating the PAN and validating the same, will be at the mercy of the department.

Hope to have a wonderful GST ahead and may the same creates a win-win situation for everyone.

Discussions to this article

[Ganeshan Kalyani]

Nice article.

The challenge is for assesses having Centralised service tax registration. As of now single compliance is done by the assessee. Now in GST the job will be split into state wise and more conplaince is to be done. Many foreign company providing service in India who in the current tax regime has single service tax number may face issue in compliance. Thanks.