One PAN, One GST Audit? CBIC Examines Centralised Mechanism for Multi-State Firms, Likely to Enforce in 6 Months

The Central Board of Indirect Taxes and Customs (CBIC) is examining the proposal to develop a centralised GST audit and investigation mechanism or scheme aimed at facilitating ease of doing business, which is likely to be introduced in the next six months. A consolidated GST authority is anticipated to manage the multi-state businesses running under a single Permanent Account Number (PAN).

A group or committee has also been constituted to examine this mechanism/scheme. The group working on this scheme will probably submit its report this month. As per the sources, the scheme will permit multi-state businesses to use a single PAN-based registration for GST auditing and probes.

The proposed mechanism is highly expected to curb duplication in audits and investigations, improve consistency in tax administration, and ease compliance for multi-state businesses.

Manoj Mishra, Partner and Tax Controversy Management Leader, Grant Thornton Bharat, has said that "This fragmented approach leads to duplication of proceedings, inconsistent positions by tax authorities, repetitive data submissions and avoidable compliance costs."

The Central Goods and Services Tax (CGST) Act has made it obligatory for all businesses to register in every state in which they operate to ensure proper state-by-state allocation of revenue.

According to the sources, "a centralised review could mean one set of submissions, one examination of the facts and a more consistent position. This would help businesses align their tax treatment and take strategic decisions with greater certainty."

If the mechanism is successfully implemented, it will be a major milestone towards greater uniformity in GST administration for businesses whose operations are spread across multiple states.