Companies will soon have one unique identification number to carry out all business transactions.
The Central Board of Direct Taxes (CBDT) and the ministry of corporate affairs are integrating their back-end operations to provide one simple identity to companies, doing away with the multiplicity of numbers currently being used by them, a senior government official told.
“While this will be implemented at Centre’s level, states will have a unique number under the Goods and Service Tax,” the official said. Corporate entities will no longer require a battery of identity numbers including corporate, employer and tax payer identification numbers once this exercise is done. The move is meant to make processes simpler and facilitate ease of doing business.
“It will enhance transparency and reduce any complexities arising out of multiple filing, therefore adding to the ease of doing business in India,” said Ashish Gupta, Partner – Financial Reporting Advisory Services, Grant Thornton India LLP.
While the MCA is trying to expedite the exercise, various government departments involved in the process including directorate general foreign trade, labour department are trying to reach a consensus on the most acceptable identification number.
“Since it is a multi-ministry exercise it could take some more time,” another senior government official said. According to experts integrating company identification number, tax and labour IDs to form a unique identity will cut on a lot of compliance requirements and filings for companies. This will also save them cost and time.
“From regulator’s point of view also, a single number will provide them all the information about companies. The platform would be the single largest database of all sectors,” said Sai Venkateshwaran, Partner, KPMG.
Government is also trying to devise an e-signature for companies to do away with the corporate stamp. The Department of Electronics and Information Technology (DeitY) is using the Aadhaar number to link it with the e-signature of an individual for using it in activities like digital locker a 10MB free personal storage space, linked to each resident’s Aadhaar to securely store e-documents.
Government is trying to work out a mechanism where even the companies would be able to use this facility. In order to improve India’s ease of doing business rank, MCA is in the process of making the National Company Law Tribunal (NCLT) operational by the end of this year. NCLT will replace the Company Law Board and the Board for Industrial and Financial Reconstruction, and become an overarching body for resolving insolvencies. It will be the main component of the proposed bankruptcy code as well.
India was ranked 130 out of 189 economies in the Doing Business report for 2016, up from 142 in 2015. It has set a target of breaking into the top 100 next year and the top 50 within the next three years. J.R. Sweezy JerseyShare This