The Central Board of Indirect Taxes and Customs (CBIC) is developing a new scheme that will allow multi-state businesses to use a single Permanent Account Number (PAN)-based registration for Goods and Services Tax (GST) audits and investigations.
This initiative, aimed at enhancing the ease of doing business, is expected to be rolled out within the next 6 months, according to government sources.
Under this new system, multi-state businesses operating with a single PAN will be overseen by a unified central GST authority.
“The CBIC has constituted a working group to examine this scheme. For businesses, the real benefit will be on the investigation or audit side…not routine return filing. Each state registration will remain legally separate, and therefore state-wise filings will continue,” a source said.
The report is expected to be submitted by the working group this month.
Currently, these companies are required to maintain numerous state-level registrations, which subject them to a wide range of audits, investigations, legal summons, assessments, and adjudication processes.
To facilitate accurate revenue distribution across states, the CGST Act requires companies to obtain registration in each state where they conduct business.
The source stated that when a company maintains the same tax position across 10 states, multiple officials might request identical information yet reach conflicting conclusions.
“A centralised review could mean one set of submissions, one examination of the facts and a more consistent position. This would help businesses align their tax treatment and take strategic decisions with greater certainty,” the source cited.
As per tax experts, the proposed structure can lessen the administrative burden and therefore result in lower compliance costs for taxpayers, as they would be needed to interact with one set of GST authorities.
However, we cannot assess the full extent of potential cost savings at this stage, as it will depend on the final scope and methods of centralised administration. This includes how audits, investigations, and other departmental proceedings are integrated into the centralised framework.
This has been a significant pain point for many companies and a long-standing demand from businesses. If implemented, it would significantly reduce the compliance burden.
It will form a standard and steady system for businesses. There is no worry about revenue sharing. On a state-by-state basis, data can be tracked.
Source: https://a2ztaxcorp.net/unified-gst-audit-authority-for-multi-state-companies-likely-in-6-months/
