Quick Read
- The need for a GST authorisation letter depends on a particular GST process and the responsibility given to a person.
- A business organisation needs to define the powers granted to an authorised person when giving them authority to avoid miscommunication during a tax procedure.
- An authorised signatory and an authorised representative are two different entities. A business cannot consider them the same.
- Maintaining updated information about an authorised person’s designation, name, and other guidelines is essential when there is any change in these terms.
With growth in the size of the company, GST compliance may become complicated, and one person will not be able to deal with everything involved in GST compliance. Inconsistencies in documentation, lack of clarity in duties, and delayed filing can make things difficult when it comes to GST compliance, especially if there are several people dealing with it. This is where authorisations come into play.
What is a Letter of Authorisation For GST?
A letter of authorisation for GST is a document certifying that a particular individual shall undertake particular responsibilities relative to the management of a given business’s Goods and Services Tax (GST). This person may represent a company during filings, communications, or other activities pertaining to the obligations of GST undertakings.
For the purpose of GST registration, a Primary Authorised Signatory must be identified and selected on the GST Portal before submitting a GST registration application. Businesses may also nominate additional signatories depending on the demands of the situation.
Why is a GST Authorisation Letter Important?
A GST authorisation letter helps a business organisation maintain its compliance responsibilities properly documented. It can be used to:
- Define who is responsible for particular GST activities
- Maintain the record of authorisations clearly and systematically
- Provide proof of appointment where required
- Clarify responsibilities in case of multiple people involved in GST clearance
When is a Letter of Authorisation Required In GST?
A letter of authorisation may be required by a business when a person’s authority is needed for a particular GST process. It depends on the application or compliance process that a business has to undergo and is not the same for all GST processes.
Who Can Issue a GST Letter of Authorisation?
A GST letter of authorisation should be issued or signed by a person authorised to act on behalf of the business, such as:
- Proprietor
- Partner
- Director
- Other person authorised under applicable GST rules
What Details Should a GST Authorisation Letter Include and What is its Format?
A GST authorisation letter should clearly mention the business details, the authorised person’s information, their assigned responsibilities, and the validity of the authorisation. It may include:
- Business or legal entity name and address
- GSTIN, where applicable
- Name and designation of the authorised person
- Specific GST-related responsibilities
- Date and validity, if applicable
- Name, designation and signature of the issuing person
The scope of authority should be specific rather than broadly covering ‘all GST matters’. Businesses can use the following GST authorisation letter format as a general reference:
Date: [DD/MM/YYYY]
To,
The Concerned GST Authority
Subject: Letter of Authorisation for GST
This is to authorise [Name of Authorised Person], [Designation], to act on behalf of [Business/Entity Name], GSTIN [GSTIN], for the following GST-related activities:
- Filing and managing GST-related documents
- Handling GST-related correspondence
- Responding to GST-related notices or queries
- Other GST activities specifically assigned by the business
This authorisation shall remain valid from [Date] to [Date], subject to any modifications communicated by the business.
For [Business/Entity Name]
Name: [Name]
Designation: [Designation]
Signature: [Signature]
Date: [Date]
Place: [Place]
*Disclaimer: This is a general reference format. The actual documentation may vary depending on the business structure and GST process involved.*
How Do You Submit a Letter of Authorisation on the GST Portal?
The process to submit your application varies depending on the type of GST application or activity you wish to perform. In general:
- Add the main or additional authorised signatory in the application portal under the relevant heading. You may have to provide evidence of appointment if applicable.
- Attach the documents as specified for the relevant GST process.
What Mistakes Should You Avoid in a GST Authorisation Letter?
Before using the letter, ensure that:
- The business name and GSTIN are correct
- The name and designation of an authorised person are correct
- The scope of the authority is clear
- The required dates and signatures are present
- The letter meets all the requirements of a relevant GST process
- The letter is updated if the person who is authorised changes
Conclusion
In the case of an expanding MSME, proper delegation of GST obligations will go a long way in reducing any confusion that might be experienced and in giving the owner sufficient time to manage his/her business. Preparing a well-drafted letter of authorisation for GST would further assist in ensuring that the obligations are maintained in writing.
At Lendingkart, we understand that compliance is just one aspect of doing business. In the event that cash flow becomes constrained because of the need for inventory, operating costs, and growth, we can come to the rescue of those eligible businesses by providing unsecured business loans to cater to their needs.
Frequently Asked Questions (FAQs)
1. What is a Letter of Authorisation for GST?
A letter of authorisation for GST is a formal document used by a business to authorise a person to handle specified GST-related responsibilities on its behalf.
2. Is a Letter of Authorisation mandatory for GST registration?
A letter of authorisation can be used as proof of appointment of an authorised signatory during GST registration. The exact documents required depend on the application and business structure.
3. Who can issue a GST authorisation letter?
It should be issued by a person who has the authority to represent or make decisions for the business or entity.
4. What information must be included in the GST authorisation letter?
The business name, GSTIN, name and details of the authorised person, extent of power to act, date, period of validity, and signature are among those that can be found in the GST authorisation letter.
5. Are the authorised signatory and authorised representative the same?
No. An authorised signatory can handle GST-related activities or sign documents on behalf of the taxpayer where permitted, while an authorised representative represents the taxpayer before GST authorities
