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States complicate GST rollout with registration
requirement
When the GST registration window opens on June 1,
Molu Ram, a Mother Dairy milk vend operator, may be
among those who seek registration. Like the
ex-serviceman, there will be a few thousand other Safal
and Mother Dairy booth operators who need to register.
"Most of our products such as fruits, vegetables and
milk will be exempted from GST but all our booths will
have to be fully compliant since some products like ice
cream and edible oil will be in the net," said Mother
Dairy CFO Meghnad Mitra.
Clearly, most booth operators, a large part being
ex-servicemen, are not in a position to comply with the
electronic registration and filing requirements that
will come with GST. So, Mother Dairy is creating a panel
of 5-6 consultants to help them. But GST compliance will
come at a cost - between Rs 1,500 and Rs 2,000 each -
with the company yet to decide who will foot the bill.
Luckily for Mother Dairy, a bulk of the registration
requirement will be limited to Delhi, Haryana and Uttar
Pradesh since its booths operate in the National Capital
Region. For the railways, the registration requirement
will be in every state since its stations sell tickets
to passengers and transport goods. |
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Individual railway zones will also have to register
in each state through which their trains pass. If
Northern Railways runs a train from, say, Delhi to
Mumbai, it will need registration in Ma harashtra,
Gujarat, Rajasthan, Madhya Pradesh, Haryana, Uttar
Pradesh as well as Delhi since it will sell tickets
in each state, explained tax lawyer RS Sharma.
The same will apply to a bus that runs from Delhi to
Jammu, boarding passengers in Delhi, Karnal and
Chandigarh, and also from Jammu on the return
journey. "If there is centralised ticketing there is
no need for separate registration in each state,"
explained an officer.
For the bus operator there is the additional
complication of getting a tax credit from the Jammu
& Kashmir government, which is yet to enact a GST
law.
For goods transporters with a national permit, even
if they pick up goods from multiple states so long
as the billing is from a centralised location the
registration requirement will not extend to more
than one state.
But banks, insurance companies and other service
providers with multiple points of sale and billing
centres will have to register separately in every
state. Although the Centre was keen on centralised
registration to ensure the promised ease of doing
business under the GST regime, states have insisted
on diluting the norms and making registration
mandatory with them.
Banks, telecom companies and other financial services
companies had petitioned the GST Council to allow
for centralised registration but states had their
way.
With the registration requirement comes the
compliance burden too. "If there is a dispute with a
state government, you will need to have people there
to deal with the case," said a company executive.
Consultants said they are facing practical problems.
For instance, currently there is no provision to
change the name of the authorised signatory of the
company. "What if the employee who is the authorised
signatory leaves between the time you register and
GST kicks in?" said a tax consultant.
Source::: Times of India,
dated 19/05/2017
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