In a recent development by the Goods and Services Tax Network (GSTN), a significant advisory was issued on October 12, 2023. This advisory pertains to unregistered suppliers and their need to obtain an enrolment number on the GST Portal, validated through their Permanent Account Number (PAN), before conducting any supply through an E-commerce Operator (ECO).
The advisory comes as a result of recent amendments to the Central Goods and Services Tax (CGST) Act, along with a notification dated July 31, 2023, which introduced exemptions from mandatory GST registration for individuals supplying goods through ECOs under specific conditions.
Let's delve deeper into these conditions and the step-by-step procedure for unregistered suppliers to obtain this enrolment number.
Exemption Conditions
- Operational Limitation: The first condition states that the supplier must operate within a single State or Union Territory. This implies that their business activities must be limited to a specific geographical region.
- No Inter-State Supply: The supplier must refrain from engaging in inter-state supply. In other words, they should only conduct business transactions within the boundaries of their chosen State or Union Territory.
- Possession of PAN: Suppliers must possess a valid Permanent Account Number (PAN) under the Income Tax Act, 1961. PAN is a unique identification number crucial for taxation purposes.
- Declaration of PAN: Before initiating any supplies, the supplier must declare their PAN, along with essential details like the business address and the name of the State/Union Territory where their business operates. This declaration should be made on the GST Portal.
- Enrolment Number: The most significant requirement is that the supplier must obtain an enrolment number on the GST Portal, which will be validated through their PAN, before conducting any supply through an ECO.
These conditions ensure that the exemption from mandatory GST registration is granted only to genuine, locally operating suppliers who are well-documented and in compliance with taxation regulations.
Procedure for Enrolment
The GSTN has streamlined the process for unregistered suppliers to enroll on the GST Portal. Here are the steps to follow:
1. Visit the GST Portal: To initiate the enrollment process, unregistered suppliers should visit the GST Portal at https://www.gst.gov.in.
2. Generate User ID: Under the "User Services" tab on the portal, select "Generate User ID for Unregistered Applicant."
3. Confirm Intent: Upon making this selection, a warning window will appear. Confirm your intent by clicking "Yes."
4. Choose E-commerce Supplier: Check the box that indicates your desire to apply as a supplier to E-commerce Operators.
5. Complete the Form: Proceed to complete the form displayed on your screen. This form will likely include essential details such as your business address and PAN.
6. Enrolment Number Generation: Once you've successfully filled out the form and your PAN has been validated, the portal will generate an enrolment number for you. This enrolment number is your gateway to legally supplying goods through ECOs in your chosen State or Union Territory.
This simple and user-friendly procedure makes it convenient for unregistered suppliers to comply with the exemption conditions and continue their business activities with ECOs within their localized area.
In conclusion, the advisory issued by the GSTN and the subsequent exemption conditions for unregistered suppliers represents a positive step towards simplifying tax compliance for small and locally operating businesses. By facilitating this exemption and providing a clear, step-by-step procedure, the GSTN is reducing the administrative burden on such suppliers, promoting ease of doing business, and fostering the growth of e-commerce within specific regions. It is a welcome development that aligns with the government's ongoing efforts to promote a more tax-friendly and business-friendly environment.
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