Sec 139 – Migration of existing taxpayers

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Sec 139 – Migration of existing taxpayers 2017-04-14T02:52:59+00:00

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  • Miloni ShahMiloni Shah
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    (1) On and from the appointed day, every person registered under any of the existing laws and having a valid Permanent Account Number shall be issued a certificate of registration on provisional basis, subject to such conditions and in such form and manner as may be prescribed, which unless replaced by a final certificate of registration under sub-section (2), shall be liable to be cancelled if the conditions so prescribed are not complied with.
    (2) The final certificate of registration shall be granted in such form and manner and subject to such conditions as may be prescribed.
    (3) The certificate of registration issued to a person under sub-section (1) shall be deemed to have not been issued if the said registration is cancelled in pursuance of an application filed by such person that he was not liable to registration under section 22 or section 24.

    Priya MadrechaPriya Madrecha
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    139.1    Introduction
    This transitory provision deals with migration of existing registrants into the GST regime. All existing registrants having a valid Permanent Account Number will be issued provisional registration certificate. After furnishing required information final certificate of registration will be granted. If the information is not furnished, the registration is liable to be cancelled.
    139.2    Analysis
    As part of implementation of GST, the existing tax payers / registrants having a valid PAN would be granted provisional registration certificates under the GST law. The details are as follows:
    (i)    The existing tax payer other than a person deducting tax or a ISD shall declare his Permanent Account Number (PAN), mobile number, e-mail address, State or Union territory shall enrol himself for getting the provisional registration certificate.
    (ii)    On successful verification of the PAN, mobile number and e-mail address, a temporary reference number shall be generated and communicated to the applicant on the said mobile number and e-mail address.
    (iii)    Upon enrolment the said person will be granted a provisional registration certificate in Form REG-25 incorporating the GSTIN which will be available on the common portal.
    (iv)    A person having a single PAN in a State or UT shall be granted only one provisional registration certificate although he may hold multiple registrations under the existing central and State laws
    (v)    A person who holds a provisional certificate of registration is required to furnish certain information in Form REG-24, within a period of 3 months;
    (vi)    If the information furnished is correct and complete, a certificate of registration in Form GSTREG 06 will be issued.
    (vii)    If the particulars and/or information has not been furnished or not found to be correct or complete, the proper officer shall cancel the provisional registration and issue an order in Form GST REG-26 cancelling the registration after serving a show cause notice in Form GST REG-27 and affording the person concerned a reasonable opportunity of being heard.
    (viii)    Every existing taxpayer / registrant, who is not liable to be registered under the Act can file electronically an application in Form GST REG-28 at the Common Portal for cancellation of the registration granted provisionally to him and the proper officer shall, after conducting such enquiry as deemed fit, cancel the said provisional registration.
    (ix)    A person to whom provisional certificate is issued and who is eligible to pay tax under composition, may opt to do so by filing electronically an intimation, within thirty days after the appointed day, or such further period as may be extended by the Commissioner in this behalf. However, where the said person does not opt to pay tax under composition within the time prescribed in this behalf, he shall be liable to pay tax under section 9.
    (x)    A Special Economic Zone Unit or a Special Economic Zone Developer shall make a separate application for registration as a business vertical distinct from its other units located outside the SEZ.
    139.3    Comparative review
    This provision is broadly comparable to the provisions relating to migration of registrations from the erstwhile Sales Tax to the Value Added Tax at the time of introduction of VAT law, in 2004/2005.
    139.4    Related provisions
    Section     Description         Remarks
    Section 22      Registration          Persons liable for registration
    Section 23     Registration         Persons not liable for registration
    Section 24     Registration          Compulsory registration in certain cases; irrespective of the threshold limit specified under section 22.
    Section 28      Amendment
    registration     of     Every registered taxable person shall inform the proper officer of any changes in the information furnished at the time of registration, or furnished subsequently, in the manner and within such period as may be prescribed.
    Section         Description         Remarks
    The proper officer may, on the basis of information furnished under sub-section (1) or as ascertained by him, approve or reject amendments in the registration particulars in the manner and within such period as may be prescribed:
    Provided that approval of the proper officer shall not be required in respect of amendment of such particulars as may be prescribed.
    Section 29         Cancellation
    Registration      of     The proper officer may, either on his own motion or on an application filed by the registered person or by his legal heirs, in case of death of such person, cancel the registration, in such manner and within such period as may be prescribed.
    Section 30          Revocation cancellation registration      of of     The registered person whose registration is cancelled by the proper officer, may apply to such officer for revocation of cancellation of the registration in the prescribed manner within thirty days from the date of service of the cancellation order.
    Rule     16
    Registration
    Rules     of     Migration of persons under the existing law.     Every person registered under the erstwhile indirect tax laws shall be Provided with a provisional certificate of registration.
    Pictorially, an analysis of this transition provision can be presented as follows:
    PRE GST
    Existing taxpayer – i.e. registered under any of earlier laws

    POST GST
    •     Existing tax payer, if liable to be registered under section 22 of the Act – then compulsorily to be registered
    •     If not liable to be registered under Section 22 of the Act – can apply for registration voluntarily
    •     In case of multiple business verticals in a State – Option to obtain separate registration for each business vertical

    Mandatory to have Permanent Account Number (PAN) (if Non – Resident taxable person then document as may be prescribed)

    •     “Provisional Certificate of Registration” granted irrespective of whether existing taxpayer liable to be registered under section 22 of the Act or not.
    •     Further allowable extended time period to submit requisite documents as may be prescribed


    Final registration to be granted by Central Government (CG)/State Government (SG) subject to the condition that the :
    Requisite information submitted within the time period allowed


    “Provisional Certificate of Registration” granted deemed to not have been issued if application filed for cancellation of registration by person not liable to be registered under Section 22 of the Act/If he does not furnish the prescribed information within prescribed time period.
    Documents:
    S.No.     Documents     File Size Format     Maximum
    Allowable Size
    1.     Proof of Constitution of Business
    •    In case of Partnership firm: Partnership Deed of Partnership Firm (PDF and JPEG format in maximum size of 1 MB)
    •    In case of Others: Registration Certificate of the Business Entity     PDF     or
    JPEG     1 MB
    2.     Photograph of Promoters/ Partners/ Karta of HUF     JPEG     100 KB
    3.     Proof of Appointment of Authorized Signatory     PDF     or
    JPEG     1 MB
    4.     Photograph of Authorized Signatory     JPEG     100 KB
    5.     Opening page of Bank Passbook/ Statement containing Bank Account Number of < Account Number>, Address of Branch, Address of Account
    holder and few transaction details     PDF
    FAQs
    Q1. What is the criteria for issuing provisional registration?
    Ans:  Every person registered under any of the earlier laws and having a valid PAN will be issued a certificate of registration, provisionally.
    Q2.  When is the final registration certificate issued replacing the provisional one ?
    Ans:  The holder of the provisional certificate will be required to furnish certain other information and documents as prescribed in the GST Rules. Upon furnishing the same, the final registration will be issued.
    Q3. What happens if the prescribed documents are not furnished within the Prescribed time?
    Ans:  If the person fails to furnish the prescribed information/documents within the specified time, the certificate of registration provisionally issued may be cancelled.
    Q4. Whether the GST Registration for existing registered dealer shall be taken by submission of required documents or will it be done automatically?
    Ans:  Yes, the data has to be submitted on GSTN portal and only then registration will be granted. A provisional registration will be granted which will be made final upon submission of additional information/documents after the appointed date.
    Q5. Can a person who is registered under the earlier law opt out of GST voluntarily?
    Ans.  Yes, by making an application in Form GST REG 28, a person can opt out of GST.
    Q6. What will happen to the provisional registration if the person claims to be not liable for registration under GST?
    Ans:  The provisional certificate shall be deemed to have not been issued if the said registration is cancelled in pursuance of an application filed by such person stating that he was not liable to registration.
    Q7. What will be the position of the provisional registration of a composite dealer? Will he remain as composite dealer even after the appointed day?
    Ans:  No. Even existing composite taxpayer has to specifically apply for composition tax within 30 days from the appointed date and the receipt of provisional certificate will not be considered as automatic transition to composite scheme.
    Q8. Can a VAT dealer opt for composition scheme after the time prescribed?
    Ans:  If a registered taxable person does not opt to pay tax under composition scheme within the specified time, he shall be liable to pay tax under regular scheme.
    Q9. What happens if the tax payer has distinct VAT registrations in the same State?
    Ans:  The transitional provisions will allot only one registration certificate in each state based on single PAN even though such person had multiple registrations in the state. He can have distinct registrations in the same State by way of an option only if the business units qualify as business verticals under the GST law.
    Q10. What happens to the distinct registrations obtained under the Central Excise and Service Tax laws for the different business premises and units in the same state?
    Ans:  All business units/premises registered either under the Central Excise or Service Tax law will be consolidated into a single CGST registration for that State, unless these units qualify as distinct business verticals under the GST law.
    MCQs
    Q1.    Should an existing tax payer surrender his registration certificate for obtaining the            GST registration?
    (a)    Yes, all registration certificates shall be surrendered;
    (b)    No. Provisional registration is automatic;
    (c)    Migrated to provisional registration only on verification of documents; (d)     No. Final registration is automatic.
    Ans:  (b) No. Provisional registration is automatic
    Q2.     Is PAN mandatory for migration to provisional GST registration?
    (a)    Yes
    (b)    No
    (c)    PAN application is sufficient
    (d)    Exempted may be given by the proper officer
    Ans:   (a) Yes
    Q3.    Should the composition dealer under the old law require to obtain final GST            registration?
    (a)    Yes, mandatory for all composition dealers
    (b)    Yes, subject to his turnover crossing the threshold under GST
    (c)    No, the old number will continue (d)     No, will be governed by old law.
    Ans: (b) Yes, subject to his turnover crossing the threshold under GST
    Q4.    Can a dealer having multiple registrations in a State obtain a consolidated GST            registration or should he get separate GST registrations?
    (a)    Rules will have to prescribed in this regard;
    (b)    Any number of registrations can be obtained in each state;
    (c)    Single registration for each state will be granted without any exception;
    (d)    Two or more registrations for each state will be granted in case of separate business verticals.
    Ans: Two or more registrations for each state will be granted in case of separate business verticals.

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