Cos will Have Unique ID No. to Carry Out Biz

Cor­po­rate en­ti­ties will no longer need mul­ti­ple iden­ti­ties for busi­ness ac­tiv­i­ties which will trans­late into sim­pler pro­cesses

The Economic Times - - Economy: Macro, Micro & More -

Ruchika Chi­tra­van­shi & Ra­jat Arora

New Delhi: 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. While the MCA is try­ing to ex­pe­dite the ex­er­cise, var­i­ous govt depts in­volved in the process are try­ing to reach a con­sen­sus on the most ac­cept­able iden­ti­fi­ca­tion num­ber

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