Letter of Authorisation for GST Explained

Large business organisations that operate in different geographies usually have different decision-makers. In such situations, the decision-makers in different regions share a sense of authority, which empowers them to make certain decisions for the collective benefit of the organisation. That is where a letter of authorisation for GST (Goods and Services Tax) is so important.

 

GST authorisation letter is an important tool that allows power sharing among the management personnel in an organisation for GST-related business operations. If you are not sure what this letter of authorisation for GST is and its significance, then this guide is just for you. Read on!

 

What is a letter of authorisation for GST?

 

A letter of authorisation (LOA) for GST is a legal document that empowers different people or entities to handle all matters relating to GST compliance on behalf of the business organisation. In other words, the LOA gives the person holding the letter the authority to legally represent the business for GST purposes.

 

Let us assume that a business organisation named XYZ has operations in more than 20 states across India. It is certainly not possible for one person to manage the business alone across all locations and physically be present in different regions for GST purposes.

 

So, what is the solution? Well, the business organisation can provide a letter of authorisation for GST to a local individual, allowing them to handle GST-related issues in the state. Thus, LOA for GST helps the business reduce the operational burden and become more efficient.

 

What are the uses of LOA for GST?

 

Now that you know the GST authorisation letter, let us look at its different uses. It is applicable for the below objectives:

 

• GST registration of the business entity
• Filing GST returns and ensuring that the business is tax-compliant
• Communicating with the GST official about any GST-related complaints you may have raised or compliance issues
• Legally represent the business (that is responsible for paying the taxes)
• Providing explanations to the GST officials

 

Also read: GST on MRP - Meaning, Rules & Calculation

 

Purpose of Letter of Authorisation for GST

 

The rules and regulations relating to GST are quite elaborate, and they may seem complex to handle by one individual. Therefore, most large organisations delegate this task to professionals to ensure GST compliance and avoid any legal or compliance issues.

The LOA for GST enables the company to choose a qualified worker who can manage all GST-related duties on a local level. Once the business issues the LOA, it provides the following things to the holder of the letter:

 

• Legal authority

  The person with the letter of authorisation for GST has the legal authority to act and make decisions on behalf of the business regarding GST-related issues.

   

• Ease of compliance

  While dealing with critical matters like GST, time and accuracy are paramount to being tax compliant. When the business offers LOA to a trusted member, it ensures timely GST payments, avoids penalty charges, facilitates timely filing of the GST returns, and ensures that all the data is accurate.

   

• Effective communication

  With a letter of authorisation for GST, the business representative can directly and effectively communicate with the local GST officials. This helps in proper and clear communication between the GST officials and the company, drafting responses faster to the GST officials and avoiding the risk of compliance issues and miscommunication.

   

How do you draft a letter of authorisation for GST registration?

 

While drafting the LOA for GST, you must be careful about the process and pay close attention to details. Here is a complete guide on what to include in the letter.

 

• Header - The letter must clearly mention the business name and GSTIN pin right at the top of the paper.
• Date - The LOA must clearly mention the date of issuance.
• Details of the recipient - The LOA must be addressed properly by the concerned tax official or department.
• Salutation - The letter must have a formal greeting, such as ‘Dear Sir/Madam.’
• Body of the Letter—The letter must clearly state its purpose, mention the names and designations of the authorised person, and provide details of the specific issue.
• Closing - The letter must express gratitude towards the GST official and also include contact details for that the GST official can reach out to the right person in case of any queries or clarification needed.
• Signature - The letter will be deemed valid only if it is signed by the authoriser and star their designation.

 

Letter of authorisation for format

 

While drafting an LOA for GST, it is advisable to adhere to the standard GST authorisation letter format, which is as follows:

 

[Name of the business organisation]

[Business address as on the registration papers]

[GSTIN]

 

Date: It must be mentioned in [DD/MM/YYYY] format

 

To,

[Name of the tax authority/department]

[Tax office address]

 

Dear Madam/Sir,

 

Subject - Letter of Authorisation for GST Registration

 

I, [Name of the authoriser], [designation], from [Name of business organisation], hereby authorise [Name of the authorised person], [their designation], to act on behalf of [business organisation's Name] with regards to all matter relating to GST registration and compliance.

 

This authorisation letter is effective from [start date] to [end date] unless it is revoked earlier in writing.

 

Thank you for your cooperation and kind support.

 

Sincerely,

[authoriser’s signature]

[Name of the authoriser]

[designation]

[contact information]

 

Mistakes to avoid while drafting a letter of authorisation for GST

 

While crafting a letter of authorisation for GST, a lot of people commit many common mistakes, which in turn lead to legal complications. Avoid the following errors:

 

• Incomplete information

  While drafting the LOA for GST, make sure that you include all the essential details, like the GSTIN number, Name of your business organisation, designation of the authoriser, etc, in the letter.

   

• Incorrect date

  Make sure you double-check the validity period in the letter to avoid any discrepancies later on.

   

• No clarity

  Your letter of authorisation for GST must clearly define the scope of authority so that there is complete transparency and clarity between you and the GST officials.

   

• Unsigned letters

  The LOA of authority you draft must be duly signed. An unsigned LOA is considered invalid.

 

Conclusion

 

A well-drafted letter of authorisation for GST is critical to ensuring that the business organisation complies with tax laws and that smooth operations are maintained.

 

For assistance with GST registration, compliance issues, or tax filing and trademark registration, you can rely on Udyog Plus's top-notch business solutions, a part of Aditya Birla Finance Limited.