Unique IDs for companies soon
What's the story
The Union government is planning a single unique identification for the companies to enable them to carry out all the transactions using that ID.
The Ministry of Corporate (MCA) and the Central Board of Direct Taxes (CBDT) are integrating their back-end operations to provide a single identity to the companies.
This will facilitate ease of doing business and make processes simpler.
Introduction
Ease of doing business in India
Complex procedures, duplication, a multiplicity of laws, etc. creates difficulty for investors in India.
As a result, India was ranked 130 out of 189 countries in the Ease of Doing Business 2016 report released by the World Bank.
Now the government wants to improve India's ranking to top 100 within a year and to top 50 within 3 years so as to attract investment.
Information
Currently: Multiple IDs for different purposes
Currently, companies have to use multiple identity numbers such as corporate ID, employer ID, tax identification, etc. which complicates legal procedures due to multiple filings by companies under various government departments.
5 Jan 2016
PAN as unique ID for companies
The government is working towards making PAN, which is issued by Income Tax Department, as the unique ID for business entities.
PAN as the unique business identity will be recognised by all government departments and would help in registering companies in a single day.
It will help reduce the industry's interactions with government agencies and make investments less risky and more attractive.
Benefits
Single ID will have large number of benefits
Unique ID will help improve transparency and reduce complexities associated with multiple filings.
It will help do away the need to do separate registration with multiple authorities such as direct and indirect tax departments, labour department, and for export and import.
Thus, it will help cut down the registration time for companies and ultimately help India climb up the ease of doing business ladder.
Personal
A move not without challenges
Since the exercise involves multiple government departments such as labour, foreign trade, income tax, etc., reaching a consensus would not only be difficult but also time-consuming.