What is Tax Identification Number (TIN)
With the #MakeInIndia wave taking over, India is the new land of opportunity when it comes to start ups and anyone who wants to start a new business needs to first and foremost have a Tax Identification Number (TIN). A Tax Identification Number (TIN) is an initiative made by Income Tax Department of India to modernize the collection, processing, monitoring and accounting of direct taxes using information technology. It is a unique registered eleven digit number that is used for identification of dealers registered under VAT. Further, this number is identifiable at any given point to cross check the legitimacy of your business wherein your Tax Identification number verification can be done through a repository of tax related information from across the country.
A business in India is required to have a TIN number so let us see how can one acquire this tax identification number and what are the advantages of having this mandatory number:
How to Get a Tax ID Number?
Yes, in this digital age, you can apply online for a TIN number for your business enterprise. You can apply by logging on to the website of the sales tax department of your respective state. Here are the documents you will require:
- ID Proof / Address proof / PAN card of proprietor with six photographs
- Address proof of Business premises
- 1st Sale / Purchase Invoice/ Copy of LR/GR & payment/ Collection proof with bank statement
This may differ slightly from state to state. After these documents are checked and scrutinized, a unique TIN number is provided to the applicant. For applicants who have Central Sales Tax Number, this can be changed to a TIN number by making a simple request to the tax department.
There are various types of Tax ID numbers depending on the nature of the business and the state it is registered in. For example, those businesses in trading or within the manufacturing goods industry absolutely require a Value Added Tax (VAT) Registration which is synonymous with the TIN registration. All traders generating a turnover of more than Rs. 5 lac per year (or Rs. 10 lac in select states) are required to have this registration. When registered for VAT, the manufacturer or trader is allotted a unique ID which consists of 11 numbers and serves as a TIN number for that particular business.
Why You Need a TAX ID Number (TIN)?
A TIN is mandatory if you are a business owner and are required to pay taxes. Additionally, in a scenario where the business owner is seeking to apply for a loan to fund their business, a TIN number is part of the documentation one will need to provide in order to secure a loan. For example , Bajaj Finserv provides loans such as Ecommerce Seller Finance, a loan offered to sellers registered with e-tailers to expand their business. For a Seller Finance Loan eligibility with Bajaj Finserv, you must be selling on their partner e-tailer’s marketplace and should qualify for the below parameters:
1. The applying business should be amongst any one of the following:
- Public Limited/Private Limited Company
- Partnership Firm
- Proprietorship Firm
- HUF Firm
- TIN VAT Number
2. The applying business should have a valid TIN/VAT number. Sellers listed to the e-tailer from Bajaj Finserv can avail a loan amount ranging from 1 to 100 lacs. As business is growing and your investment in stock is increasing in multiples, this option reduces your financial burden. You can invest in stocking up of inventory or raw materials in one single go and your amount also gets adjusted in a phased manner with a bearable interest cost.
Why Do You Need to Find a Tax Identification Number? And where can you find one?
A cautious and wise business owner can use the TIN number to verify who you are trading with as you can now look into details of a trader in any part of the country. The good news is that now anyone can verify, check or find tax identification number of any dealer of any state in India. And this information is available because of the foresight and extensive initiative of the Empowered Committee of State Finance Ministers and the commencement of the Tax Information Exchange System (TINXSYS). With the aid of this centralized system any business owner or individual can check his or other dealers details attached to the VAT TIN or CST Number.
For example, a local business can verify the details such as VAT TIN Number, Address CST Number (Sales Tax Number) of another business using the TIN Number of the dealer before doing any transaction with that dealer or vendor. This is important to protect your own business interests before conducting any sale purchase or transaction with another party. You can log on to http://india.gov.in/ and can check details such as:
- CST Number
- Dealer Name
- Dealer Address
- State Name
- PAN Number of Dealer
- Date of Registration under CST Act
- Dealer Registration Status under CST Act
- This record is valid as on (date)
For more tax identification number related information, you can contact http://india.gov.in.