Goods and Services Tax (GST) is an indirect tax levied on the supply of goods and services. Many indirect taxes have been replaced by it, including VAT, service tax, CST, and excise duty. The government introduced the CGST Act on 1st July 2017 to establish GST as a comprehensive indirect tax.
Individuals and businesses must register for GST in all states and union territories where they are liable to do so, as outlined in Section 25 (1) of the CGST Act. The process of registering under this act is called GST registration, and it can be completed online on the GST portal.
Importance of PAN Card
In accordance with the Income Tax Act of 1961, all individuals, companies, partnerships, and non-profits must have a PAN card. The PAN card is used by the IT department to keep track of all financial transactions in the country.
When filing IT returns, a PAN card helps a company receive several remittances and invoices. If you do not possess a PAN card, you will be liable to pay taxes at the highest rate applicable since you will not be able to take advantage of the tax benefits and schemes offered by the government. Apply for your PAN card online if you don’t already have one.
GST Registration and PAN Card
GST comes with the motto “One nation, one tax”. They wanted direct and indirect taxes under one roof. GST is an indirect tax by nature and is linked to PAN, which is a direct tax.
When a business is restricted to just one state or UT, a person only needs one GST registration. But if he operates in more than one state or UT, he has to register for GST in each one. If he’s in the trading business and he trades in both Delhi and Mumbai, he needs to get GST registration in both places.
In our previous example, the same person got two GST numbers, in two different states. Both will be linked to his PAN card. One PAN card can be used for two GST registrations. That’s when you have to register for more than one GST. You can now link GST numbers with PAN cards online.
A single PAN card can also be used for two GST registrations, but it depends on personal preference. Many business verticals are operated in the same state or territory by the same person. Accordingly, he may opt to have separate GST registrations for each of these verticals, subject to fulfilling conditions in section 25 (2) of the CGST Act.