GST Migration – Voluntary or Mandatory?

At present, tax payers are separately registered with State and/ or with Central tax administrations or with both based on their business activity. In the GST regime, a taxpayer will have to obtain State wise registration. Even within a State, the taxpayer may either opt for a single registration or multiple registrations for different business verticals.

Currently GST migration is going on full swing through As per the Government’s plan, the GST Network shall migrate all Service Tax, VAT and Excise assessees to the GSTN network and issue GSTIN number and password. They will be asked to submit all requisite documents and information required for registration in a prescribed period of time. The service tax assessees having centralized registration will have to apply afresh in the respective states wherever they have their businesses. PAN is mandatory for migration, thus it has to be obtained and updated with registration details in the ACES portal. 

According to the GST Model Law issued in 2016, every person registered under any of the earlier laws and having a valid PAN shall be issued a certificate of registration on a provisional basis, in such form and manner as may be prescribed. The certificate of registration to be issued shall be valid for a period of six months from the date of its issue. That implies that once GST comes into effect the assessees will be granted a minimum of six months to get migrated and obtain the GST Certificate. Appointed day means such date on which Goods and Services Tax Act, 2016 comes into effect, by notification in the Official Gazette.

The Act specifies no such compulsion for the existing assessees, to get migrated with the GST Portal or GSTN before the Act comes into effect. Now the question arise as to why the States and the Centre are spreading the information to the assessees to get migrated to GST at this tentative stage, when even the draft of the law is not approved or has taken a form of the Act. It is a million dollar question as to whether migration is voluntary or mandatory.

As per the Report on GST Registration issued in 2015, the process of migration of data must be started sufficiently in advance so that the business of existing registrants does not suffer and transition from the present system to GST is smooth. With regard to the migration of data of the existing registrants, the system is expected to be designed to migrate verified data from the existing database to the GST Common Portal, generating a GSTIN. In connection with the same, Act specifies no compulsion on part of the assessees to get migrated before implementation of the Act, rather the GST Portal is expected to be sound enough to migrate them, within a transition period of six months, as expressed in the draft model law issued in November, 2016. At the end, it appears like a number game of State v/s State v/s Centre. One trying to prove that their State has more GST migrations than the other, ultimately leading to unnecessary anxiety and sense of fear, due to lack of knowledge amongst the stakeholders.

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