GST rules to force crores of traders to re-register

Hyderabad: The draft rules relating to registration, invoice and payments under the new GST regime makes it mandatory for existing traders and manufacturers — who are registered under the existing laws —  to reapply fresh registration, potentially opening up a huge opportunity for corrupt officials to make money.

“Every person registered under an earlier law and having a PAN issued under the Income Tax Act shall be granted registration on a provisional basis.... (However) every person who has been granted a provisional registration... shall submit an application electronically in Form GST REG-20, duly signed, along with the information and documents specified in the said application, on the Common Portal. If the information is found, by the proper officer, to be correct and complete, a certificate of registration shall be made available to the registered taxable person electronically,” the draft GST rules said.

The draft goes on add: “Where the particulars and/or information specified in sub-rule (2) have either not been furnished or not found to be correct or complete, the officer shall cancel the provisional registration.”

Unlike the issuance of PAN for income-tax, traders, who refuse to be quoted, claim that it is mandatory for traders to bribe officials for the registration, despite many states having online registration options.

Since GST rules involve official involvement even for the existing business, bribe may become indispensible. The amount of bribe required to be paid to ground staff depends on the size of the business. “The cost for the registration — including bribes and documentation —ranges from Rs 7,000 to Rs 30,000. Even if we take the least of two — Rs 7,000, the total amount of registration cost for all dealers and manufacturers — assuming they are one crore in number — have to shell out for registration would be Rs 7,000 crore,” a trader said.

Though GST drafts propose deemed registration if the officer does not find any discrepancies, many states which currently offer online registration were not able to end corruption in registration process. The reasons, whi-ch make people approach brokers, are difficulty in filling up forms or a slower website. Instead of making re-registration a must, traders feel the government should allot final GST number to existing dealers or manufacturers by default.