Tax department issues draft rules on registration, invoice and payments
September, 27th 2016
To prepare the groundwork for a smooth rollout of the Goods and Services Tax (GST), the tax department on Monday released three sets of draft rules and their formats relating to registration, invoice and payments under the new indirect tax regime.
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The Central Board of Excise and Customs (CBEC) has invited comments on draft rules by Wednesday, which would be finalised by Friday.
The draft rules provide for online registration by residents within three days of submission of application. Non-residents coming under the purview of GST will be required to electronically submit the application for registration at least 5 days prior to the commencement of business and shall also deposit full tax liability in advance.
Registered taxable person shall display his certificate of registration and GST identification number in a prominent location at his principal place of business and at every additional place or places of business, the CBEC said.
The government plans to implement the new indirect tax regime GST from April 1, 2017, and to that effect the GST Council will hold its second meeting on September 30. The meeting would finalise rules for GST.
The first meeting of the GST Council agreed on issues regarding the exemption limit, dual control and base year for compensation to states. The GST Council, which is headed by Finance Minister Arun Jaitley, decided to fix the exemption limit for the indirect tax at Rs 10 lakh for northeastern states and smaller states and Rs 20 lakh for other states along with decision to subsume all cesses into GST.
The council also made a headway on the issue of dual control between states and Centre by allowing states to have administrative control over assessees with annual turnover of less than Rs 1.5 crore. For turnover of over Rs 1.5 crore, there will be jurisdictional assessment by either states or Centre but no dual control. For compensation to states in case of revenue loss after implementation of GST, 2015-16 was selected as the base year for compensation but a detailed compensation formula will be fixed in subsequent meetings.
The draft rules released on Monday also provide that if a tax official fails to take action on registration application within a stipulated time frame, the application for grant of registration shall be deemed to have been approved.
As per the draft norms, the applicant seeking registration will have to submit permanent account number (PAN), mobile number, email address on the common portal or through a facilitation centre. The tax authorities will use 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 registration in three working days from the date of submission of application.
In case there are defects, the applicant has to be intimated within three working days and after receiving clarification, he will be granted registration within 7 days from the date for receiving of reply. There will also be a provision for grant of separate registration for business verticals of the same organisation.
The rules also provide for suo motu registration of person who are liable but have failed to apply for registration. The rules also provide for physical verification of business premises after grant of registration. 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 number of details should be mentioned in an invoice, for example, description of goods, quantity of goods, rate (per item), discount offered, freight, amount of tax, electronic reference number etc. These rules also prescribe that transporter need not carry any invoice if supplier provides invoice reference number to transporter.