In the era of Digital India, the country’s new Goods and Services Tax (GST), taking effect 1 July, modernises how registered assessees sign and file their returns – online rather than by hand.
Digital signing already prevails with income tax returns and the Ministry of Corporate Affairs, and now the government is introducing digital signing and online filing for GST returns (GSTR) as well. It’s good news for registered dealers who, under GST, have to file as many as 108 returns a month if having business in all 29 states and 7 union territories. Manual signing and filing would simply be one more complication in what’s already shaping up to be a convoluted GST compliance process.
So how can companies take advantage of digital signing and online filing? It will all happen within the online GST Common Portal or GSTN, for which all taxpayers need to register. Registration is free, and companies only need to register once for both state and central filing.
The GST Common Portal will allow businesses to designate employees as authorised signatories, which enables them to sign and file returns on behalf of the business, as well as to make payments – all online. Any person registered on the Authorized Person tab of the GST Common Portal for an enterprise can sign and file GSTR on behalf of that enterprise, using either e-sign or digital signature certificates (DSC).
E-sign (electronic signature) is linked to the Aadhar card of the signatory. It’s designed for small entrepreneurs, such as proprietors, who do not have digital signature certificates (DSC).
When filing a return within the GST Common Portal, authorised signatories to click on “E-Sign” and receive a prompt to enter their Aadhar number. This sends a request to the UIDAI system to generate a one-time password (OTP), which is then sent to the email address and mobile number associated with that Aadhar number. The user then inputs the OTP into the portal. If the OTP matches, the filing – or other action – is complete.
Signing GSTR with e-sign is a quick and easy process compared to using DSC.
A DSC replaces a hand-written signature in establishing the identity of someone online. Using DSCs to sign and file returns in the GST Common Portal is mandatory for companies and limited liability partnerships (LLPs), and optional for other taxpayers.
A DSC is linked to the Permanent Account Number (PAN) of the signatory, whose PAN is encrypted in a DSC token. To obtain a DSC, signatories must provide a copy of their PAN and Aadhaar cards (or other proof of address) to a Certifying Authority along with an application form and a nominal fee. The Certifying Authority then issues the DSC with software that allows the DSC to be installed on the user’s computer or on the business’ system.
After installing the token, the DSC needs to be registered within the GST Common Portal. This happens on the Register Digital Signature Certificate page.
During registration, the portal prompts the user to select the PAN of the person whose DSC is being registered from the list of authorised persons. The system then validates the PAN against the DSC. If it matches, the registration is complete, and the DSC can be used to sign and file online GSTR.
A DSC is typically valid for one to two years. Upon renewing a DSC, taxpayers will also need to update it within the GST Common Portal to ensure there are no interruptions in signing and filing returns digitally, as well as submitting payments on time.
Digital signing and filing of GSTR will all occur within the GST Common Portal, making it easy for taxpayers to take their compliance into the modern age.