According to MPVD & Associates, a leading CA firm in Kolkata that provides comprehensive ITR filing services to new entrepreneurs across India, new entrepreneurs focus the majority of their attention on finding vendors, sales, and marketing but fail to recognize their obligations in pursuing a legal entity, particularly when the company reaches its break-even point.
If you want to start a business in India, you might understand GST registration well enough, but you will gradually come across a slew of entrepreneurship jargon and acronyms, like PAN, TAN, TIN, DIN, and so on. Even though it may seem intimidating at first, you will soon realize that each of them serves a specific purpose and pushes you towards a transparent and unique business identity, consistent tax benefits, and financial transactions with legal compliance.
In pursuit of establishing a successful business plan and strategy, entrepreneurs must have a 360-degree understanding of the secure unique identifiers required for completing many types of financial and legal activities in India. If you think that the unique Goods and Services Tax Identification Number (GSTIN) is your ticket to safe and legitimate business operations in India, here are all the other documentation and identification numbers that you need to obtain sooner or later.
The Goods and Services Tax Identification Number (GSTIN) proves that a company is registered under the Goods and Services Tax, as per the Central Goods and Services Tax Act, 2017.
The GST consolidated a host of indirect taxes in India, including TIN and VAT, with effect from July 1, 2017. Businesses or individuals that sell any sort of goods or services in India are entitled to register for GST. And registered entities must pay the tax once their revenue crosses the minimum threshold limit of Rs. 40 lakh. Businesses must also include the code as the GST invoice serial number on all invoices to protect the entity against complications with input tax credits and obtaining TDS return filing services.
The unique 15-digit provisional GSTIN is an alphanumeric code assigned to each business and is used for filing GST returns, making GST payments, and availing input tax credits. It is used to uniquely identify each taxpayer registered under the GST (Goods and Services Tax) regime in India.
No. A business that has obtained GST registration does not need to obtain TIN and VAT registration separately. Just your GSTIN is enough to comply with all legal parameters outlined under the TIN, including VAT returns and payments and availing of an input tax credit.
However, it is widely mentioned that the GST has effectively “replaced” the TIN and VAT, which is not fully true because the taxes are still there, and the GST has only consolidated them under one identification number and a single code of conduct.
However, depending on the type of business and its location, other registrations, such as professional tax, shop and establishment registration, and so on, may be required. It is critical to check with local authorities and obtain the necessary registrations to ensure compliance with applicable laws and regulations.
While both GSTIN and PAN are unique identifying codes, their purposes are vastly different. Fundamentally, the GSTIN has a business purpose, while the PAN number is essential for every individual or entity (including foreign citizens/entities) that is earning taxable income in India.
PANs are primarily used for personal income tax purposes, such as filing tax returns, making tax payments, and conducting various financial transactions. A PAN card is required for day-to-day transactions such as opening a bank account, applying for a credit card, starting a DEMAT account, or even obtaining a GSTIN. In fact, there are no age restrictions for obtaining a PAN card, so youngsters may be eligible for application when appropriate.
GSTINs are used for business sales with an annual turnover exceeding the prescribed threshold limit. GST-related transactions. The number is required for filing GST returns, making GST payments, and claiming the input tax credit. The PAN of the authorised signatories/applicant, who may be a company proprietor, partner, or managing director, is required for any kind of GST registration.
The Digital Signature Certificate (DSC) is the digital form of signature used for electronic document and transaction authentication and validation. A certifying authority issues a DSC, which is used to assure the validity, integrity, and non-repudiation of electronic documents. A DSC is necessary for the business context when filing different forms and returns with the government, such as income tax returns, GST returns, and company registration forms.
The Director Identification Number (DIN) is used to identify company directors in India. It is a mandatory requirement for all directors to obtain a DIN before they assume their position in a company.
Just like other unique identities, the purpose of the DIN is way different from the GSTIN. The GSTIN is used to identify the taxpayer and track their transactions for tax purposes, but the DIN identifies the company director’s profile and legal movements. By maintaining a database of all directors through their identification numbers, the government can prevent illegitimate business transactions within the country and identify if anyone is trying to commit any malicious activity by faking their identity.
The Income Tax Department issues TANs, which are 10-digit alphanumeric numbers, to firms or individuals who are required to deduct or collect tax at source (TDS) on certain types of transactions, such as salaries, interest, rent, or commission. The TAN requirements apply to the person who is responsible for withholding tax from money paid or collectable under the Income Tax Act. Individuals must provide their PAN when filing their income tax returns.
If you have not yet filed your income tax returns in India but are earning a stable income or are intending to start your own business, either as an eCommerce vendor or by giving your services as an independent professional, choose MPVD & Associates’ ITR filing services. If you are unsure about the type of unique identification number you must obtain, we will guide you and assist you in obtaining a genuine and compliant tax management portfolio.