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The Department of Revenue
in the Ministry of Finance had recently sent a proposal
to state governments for making the 10-digit permanent
account number (PAN) the starting point for registering
GST payees.
A senior official told Business Standard, the proposal
had been sent recently to state governments in order to
have uniformity, against the current practice of having
multiple numbers for central excise, value-added tax,
central sales tax and importer-exporter codes.
“Some of the state governments had earlier proposed that
the tax information network (TIN) number issued by them
for payment of VAT should be used for GST registration,
since it was more reliable than PAN. The Centre,
however, argued that the number of digits in TIN number
varied across states from 12 to 14. It was necessary to
have the same of digits for uniformity,” an official
said.
The new business identification number was likely to be
the 10-digit alphanumeric PAN, in addition to two digits
for state code and one or two check numbers for
disallowing fake numbers. The total number of digits in
the new number was likely to be 13-14. The GST
discussion paper presented by the empowered committee of
state finance ministers had earlier said the format of
the registration number would be worked out in
consultation with the Income-Tax Department.
Explaining the advantage of having a PAN-linked number,
officials said PAN had an all-India presence. “Barring
the North-East where residents have income tax
exemption, PAN has a presence across the country. It has
the single largest base of 40 million assessees as
against 6-7 million that were expected to be covered
under GST,” said the official.
By cross-checking payments of income tax with that of
GST through the number, evasion could be prevented.
“This (the number) would bring the GST PAN-linked system
in line with the prevailing PAN-based system for I-T
facilitating data exchange and tax-payer compliance,”
the GST discussion paper said. States like Maharashtra,
Gujarat and Andhra Pradesh use PAN for preventing
evasion through a database linked to it.
Atul Gupta, senior director at consultancy firm
Deloitte, said: “A PAN-linked system would provide a
correlation between payment of direct and indirect taxes
and the authorities administering them. PAN is uniform
throughout the country and other registration numbers,
like those in the company laws, are also linked to PAN.”
The revenue department had earlier examined a proposal
to use the Unique Identification Number for the purpose,
but it was dropped since UID would be issued only to
citizens while the business identification number would
be for all legal entities, including individuals,
companies and partnership firms.
Source :
The
Business Standard,
India,
dated
25/11/2009
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