A letter of authorisation for GST is an essential document regarding taxation and business operations. It gives power to another person on your behalf to make decisions on GST and taxation matters. This usually happens in huge business entities where one person cannot handle all the operations, so an accountant or tax consultant is traditionally given this authority.

This letter plays a crucial role in reducing the burden on business entities and complying with the tax regulations at the same time. However, before we discuss what a letter of authorisation for GST is and how to write one, let’s quickly learn when it is required. Understanding the essential documents needed to obtain a GST number is a crucial first step.

Documents Required for Obtaining a GST Number

You must submit the following documents to obtain the GST number:

1. Documents of business registration. 
2. Proof of the constitution of business. 
3. Letter of authorisation with the acceptance letter. 
4. Photo of an authorised signatory.
5. Original proof of the location of the business. 
6. Photo of the partner, promoter, or business owner in case of a firm, company, or sole proprietorship, respectively.
7. Documents of the bank account of the business. 
8. Digital signature.

The letter of authorization for GST is a crucial document for any business wanting to share GST responsibilities with a trusted third party. This letter officially allows someone else to handle important tasks like getting the GSTIN number, filing returns, and keeping transaction records. Advisors suggest clearly stating what the third party can do and for how long. This clarity helps ensure everything runs smoothly and the business stays compliant, making life easier for everyone involved.

Components of a Letter for Authorisation

Below are the basic components of a letter of authorisation for GST:

1. Identity of the parties: The letter of authorisation for GST must include the parties involved in the approval, the authorised signatory, and the authorising entity/business. 
2. Level of authorisation: The letter of approval for GST should include the scope or level of authorisation to its limit. The authorised signatory has to undertake all the tasks given to him with accuracy and in detail. 
3. Tenure of authorisation: The letter of authorisation for GST should mention the period for which the authorisation has been given. This could be a one-time authorisation or a specific period. 
4. Signature and seal: Both the grantor and the authorised signatory should sign a letter of authorisation for GST, and the concerned authority should stamp and seal it according to the regulations. 
5. Details of the authorisation: Specific details about the business, the address, GSTIN (GST identification number), and other required information should be present. 
6. Purpose of the authorisation: The purpose of the letter of authorisation for GST is usually to file GST returns, claim input tax credits, etc. This purpose has to be mentioned, as this inclusion helps ensure clarity regarding the role of the authorised signatory. 

Responsibilities of an Authorised Signatory

We understand from the paragraphs above that an authorised person is responsible for making decisions related to GST on behalf of a firm. Now, in this segment, we will elaborate on the responsibilities of an authorised person, which are as follows:

• Registration of GST and its compliance: One of the authorised signatory’s most important responsibilities is to ensure that the GST registration process for a business entity is streamlined while following all the rules and regulations. This also includes submitting relevant documents to the department on time and updating registration details on time. 
• Filing GST returns: The main task for all GST systems is filing returns. The authorised signatory must ensure that the business entity’s GST has been filed in a timely manner and accurately on the due dates and avoid any penalties. 
• Communication: The authorised signatory acts as a joining link between the business entity and the taxation authorities. The signatory must ensure he communicates with the authorities properly to understand the nuances of taxation and comply with it. The signatory might have to provide some clarifications, respond to queries, and address the issues of both–the business entity and the GST authorities. 
• GST payments and refunds: The signatory is responsible for paying the GST amount accurately before the due date and claiming the credits or refunds promptly for the benefit of the business. 
• Keeping accurate records: The authorised signatory of the letter of authorisation for GST must ensure that he documents everything he does during his tenure in the record book. From submitting the relevant documents to getting the GSTIN number to filing the GST and claiming the refunds, everything has to be appropriately documented for clarity. 
• Compliance with GST laws: A signatory must be aware of all GST laws and comply with them accurately and in a timely manner.
• Representation in GST: The signatory has to represent the firm/business entity in GST issues during audits, investigations, and more.

How Do You Write a Letter of Authorisation for GST?

Follow the steps below to write a flawless letter of authorisation for GST:

1. Format and structure: Begin the letter with a formal salutation and date, and specify the subject clearly as ‘letter of authorisation for GST.’ Follow the format of identity documents, writing the scope, duration, and other details. 
2. Introduce the parties: The second step introduces the parties to the authorisation, the grantor, and the signatory. Provide them with their addresses and full names. 
3. Scope of the authorisation: Now clearly specify the scope of the authorisation, that is, the exact power that the authorised signatory receives after signing the letter. 
4. Duration: This segment of the letter of authorisation for GST is important as the tenure puts a deadline on the duties of the signatory. This can range from a one-time letter to the defined period and then renewal from time to time as per the parties’ convenience. 
5. Authorisation details and statement of purpose: All the relevant documents, such as the GSTIN number, address proof, proof of business constitution, etc., should be present. The purpose of the authorisation must be precise and signed by both parties.
6. Sign, seal, and review: Both parties must sign the letter of authorisation for GST, get it stamped and sealed by the relevant department, and review the document multiple times before finalising it.

Template of the Letter of Authorisation for GST

Below is the template of a comprehensive letter of authorisation for GST that you can follow while writing:

[Your Name]

[Your Address]

[City, State, Zip Code]

[Email Address]

[Phone Number]

[DateDate]

[Recipient Name] 

[Recipient Title]

[Company Name] 

[Company Address]

[City, State, Zip Code]

Here is an example of how a proper letter of authorisation for GST should look like:

Subject: Authorisation Letter for Goods and Services Tax (GST) Matters

Dear [Recipient Name],

I, [Your Name], at this moment, authorise [Authorised Representative’s Name] to act on behalf of [Your Company Name] in all matters related to Goods and Services Tax (GST) with immediate effect. [Authorised Representative’s Name] holds the position of [Position Title] in our organisation and is authorised to represent us in GST-related activities.

The scope of authority granted to [Authorised Representative’s Name] includes but is not limited to:

1. Filing GST returns on behalf of [Your Company Name].
2. Responding to GST notices and inquiries.
3. Claiming input tax credits and refunds.
4. Representing [Your Company Name] in GST audits, assessments, and investigations.
5. Communicating with tax authorities regarding GST matters.

This authorisation is valid until revoked in writing by [Your Name] or [Your Company Name].

I have attached a copy of [Authorised Representative’s Name] ‘s identity proof and a signed declaration of acceptance of this authorisation for your records and verification.

Please consider this letter as official authorisation from [Your Company Name] for [Authorised Representative’s Name] to act on our behalf in all GST-related matters.

Thank you for your attention to this matter. Should you require further information or clarification, please contact me at [Your Phone Number] or [Your Email Address].

Yours Sincerely,

[Your Signature (if sending a physical letter)]

[Your Name]

[Your Position]

[Your Company Name]

Conclusion

The letter of authorization for GST is a vital document for any business entity wishing to delegate responsibilities related to GST matters to a third party. This letter formally assigns the responsibility of managing GST-related tasks to an authorised signatory. These tasks include obtaining the GSTIN number by submitting the necessary documents, filing GST returns, and maintaining accurate records of all transactions. 

The authorised signatory assumes comprehensive control over these processes, ensuring compliance with GST regulations. Advisors recommend clearly defining the scope of authority granted to the third party in the letter, specifying the exact responsibilities and limitations of their role. Additionally, it is important to outline the duration of the authorization to ensure clarity and prevent any future disputes. 

Adhering to these guidelines helps ensure smooth and efficient business operations, as it aligns with legal requirements and provides a structured approach to managing GST responsibilities. This meticulous attention to detail fosters a transparent and accountable system, ultimately benefiting the business entity by reducing the risk of non-compliance and facilitating seamless GST management.