India has a well developed tax structure with a three-tier federal structure, comprising the Union Government, the State Governments and the Urban/Rural Local Bodies. In the course of business,we come across many terms such as TIN, TAN, VAT, PAN, DSC and DIN. Knowing the differences and meaning of these terms is important for any Entrepreneur. This article focuses on the meanings of terms CST, TIN, DSC, TAN,VAT, PAN and DIN and their differences.
Permanent Account Number (PAN)
Tax Deduction and Collection Account Number (TAN)
Tax Deduction and Collection Account Number (TAN) is a 10 digit alphanumeric number issued to persons who are required to deduct or collect tax on payments made by them under the Indian Income Tax Act, 1961.Failure to apply TAN when required can attract a penalty. Once TAN is obtained, TDS returns must be filed quarterly by the business.
Tax Payer Identification Number (TIN or VAT)
TIN-The Tax Payer’s Identification Number (TIN) is new unique registration number that is used for identification of dealers registered under VAT. It consists of 11 digit numerals and will be unique throughout the country. First two characters will represent the State Code as used by the Union Ministry of Home Affairs. The set-up of the next nine characters may, however, be different in different States.TIN number or VAT registration is a must for businesses selling goods or products like manufactures, exporters, shopkeepers, dealers, ecommerce sellers selling goods, etc.
TIN number is used to identify dealers who are registered under VAT and it is also used for interstate sales done between two or more states.
Central Sales Tax Number (CST)
CST is issued by the Commercial Taxes Department to an applicant under the CST Act. If you have CST number you can purchase & sale goods from one state to another at lower tax rate.
Digital Signature Certificate (DSC)
The digital equivalent of a handwritten signature or stamped seal, but offering far more inherent security, a digital signature is intended to solve the problem of tampering and impersonation in digital communications. DSC is mainly used by the Income Tax Department, MCA (ROC), Employee Provident Fund, E-Tenders, Directorate General of Foreign Trade and many more in India. Digital Signatures are categorized into three classes – Class 1, Class 2 and Class 3. Class 2 signature is commonly used during registration of a company or to file income tax returns etc. Whereas, Class 3 Digital Signatures are used while participating in E- Tenders. It price varies in between Rs. 1000-1500,depending on the class.
Director Identification Number (DIN)
Director identification number is a unique number require by the Director or prospective Director of the company.This number is one of the basic requirement for Company registration.DIN typically contains all the personal information of the person becoming a Director. DIN can only be obtained by persons. DIN can be obtained by both Indian and Foreign Citizens by submitting identity and address proof to the Certifying Authority. DIN cannot be obtained prior to the DSC (Digital signature Certificate) .
DPIN (Designated Partner Identification Number) is similar to DIN but used in case of registering a LLP in India. However, both can be used interchangeably.