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Understanding Taxpayer Identification Number

Taxpayer Identification Number or TIN is a unique identification number allocated by the Income Tax Department to businesses for keeping track of any business transactions. Any business firm registered under VAT for a trade of goods and services should be able to produce a TIN when required.

The primary motive behind issuing of TIN to businesses is integrating every tax-related information on one platform and for enabling the Income Tax Department to monitor any transactions carried out by the registered businesses. An 11-character TIN is assigned to all business dealers who want to have their business registered under VAT or the Central Sales Tax (CST).

Applying for Taxpayer Identification Number

A TIN is required for every business owner who is a regular tax payer. If a business owner is seeking to apply for a secured loan for funding or expanding his/her business, the Taxpayer Identification Number of the business should be produced as a part of the documentation.

Firms like Bajaj Finserv offers Ecommerce Seller Finance loans to sellers registered under e-tailer (retailers who sell goods via electronic transactions online) for business expansion purposes. To be an eligible applicant for Ecommerce Seller Finance Loan at Bajaj Finserv, the seller must have their products live, online at their partnered marketplaces or they must qualify certain parameters for the loan to be granted.

Businesses applying for the loan must meet one of the following Criteria:

  • Public Limited or Private Limited Company.
  • Partnership Firm.
  • Proprietorship Firm.
  • HUF Firm.
  • Business with a TIN VAT Number.

If a business has a valid TIN, then it can apply for loans, amounting from Rupees 1 lac to Rupees 1 crore.

With the extensive initiatives of Empowered Committee of State Finance Ministers and the commencement of the Tax Information Exchange System (TINXSYS), now business owners in India can utilize Taxpayer Identification Number to obtain verifications about their trading partners within any part of the country.

Through TIN, anyone can check and find out the details attached to the VAT TIN or CST Number of its trading partner to validify the authenticity of the partners.

Applying for Taxpayer Identification Number

To make the process more accessible and easier for applicants, the government has provided the options where one can apply for TIN either online or offline. The Department of Commercial Tax of any Indian state is the authority that grants Taxpayer Identification Number to all the enterprises that wish to register for it.

For every business, it is necessary to produce TIN during submission of VAT, which is why the Taxpayer Identification Number gets automatically furnished the moment you register for it. TIN registration process differs depending on the state one registers at. The process is directed under the Central Sales Tax Act or CST.

To apply online for TIN in India one can visit the government’s official website at and follow the steps directed on the website. Offline applicants will have to download the form and submit it to the closest centre.

The basic way to apply for TIN in any state of India follows a common procedure:

  • The first part of the procedure is to find the respective State Government’s VAT Department Website.
  • In many states, the initial procedure involves creating a unique login on the VAT Portal.
  • Upon creation of login ID, the applicant must fill up the application with all the necessary details and upload the documents that are required.
  • After the application has been filed, it is verified and a provisional certification along with the TIN are issued.
  • An officer from the concerned department of government will then visit the premise for verification of the location and a final certification is issued.

Documents Required to Apply for Taxpayer Identification Number:

  • ID Proof or PAN card of the proprietor.
  • 4 to 6 passport size photographs.
  • Proof of address of the business establishment.
  • An invoice of the first business sale, the first purchase Invoice or payment proof along with the bank statement.
  • A collateral of the registering business.

The guidance and advice of a professional Chartered Accountant are highly recommended for start-up businesses, to avoid any form of glitches in the process.

What are the types of Taxpayer Identification Number?

Depending on factors like the type of business and the state where TIN is registered, the Taxpayer Identification Number differs.

A brief example can be made of businesses involved in the trading industry or product manufacturing industry; both types of businesses require a Value Added Tax or VAT Registration which is always applicable with TIN registration.

When a trading or manufacturing company registers for VAT, a unique Identification consisting of 11 numbers serves as the TIN number. Companies in these industries with a turnover of more than Rupees 5 lacs or 10 lacs in some states should mandatorily register for VAT.

Differences in Security Deposits for Taxpayer Identification Number Registration, depending on the State where it is applied

TIN registration differs from one state to another and the security deposited while registering also differs. In many states, a fixed amount of security is deposited in terms of bank grantee or fixed deposit. The security amount is refundable at the time of cancelation of registration.

  • There is no security deposit concept in Delhi and businesses can apply for TIN without any charges.
  • In the state of Maharashtra, Rupees 25,000 is the security deposit amount.
  • In the state of Rajasthan, Rupees 20,000 is the security deposit amount.
  • In states like UP and Haryana, the security deposits are as high as Rupees 1, 00,000.

In Maharashtra, instead of the security deposit amount, business owners can also produce a minimum of 2 registered guarantors that are registered under the same State’s VAT Law.

Frequently Asked Questions

Q. Can a business apply for Taxpayer Identification Number if the location of the business establishment shows a residential address?
This is allowed in some states of India but in other states, the application gets cancelled while the VAT Inspector visits during verification.
Q. Can a business apply for TIN even without registering their company?
No, the applicant must provide proof of the business authenticity to be verified for a TIN.
Q. Are the Security Deposits refundable when a business cancels its registration?
Yes, the Security Deposits are refundable following the cancelation of the registration.
Q. Are there any ways to avoid depositing of the security amount?
For avoiding the security deposit amount one must provide a minimum of 2 registered guarantors that are registered under the same State’s VAT Law, verifying the authenticity of your business. The other way is to show your yearly turnover if it is more than Rupees 10 lacs.

In the News

  • All India ITR launches Income tax e-filing Mobile App for Android and IOS

    Daily Excelsior News: File your income tax returns, process rent receipts, calculate taxable income and HRA exemptions at the touch of your smartphone screen with All India ITR’s new mobile app. Meeting tax compliance has never been easier.

    13th June 2017

    Daily Excelsior News

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