Profession Tax is a state-level tax that applies to salaried employees and professionals, including chartered accountants, lawyers and doctors. The following states impose this tax: Karnataka, West Bengal, Andhra Pradesh, Maharashtra, Tamil Nadu, Gujarat, Assam, Chhattisgarh, Kerala, Meghalaya, Orissa, Tripura and Madhya Pradesh. Registration is mandatory within 30 days of employing staff in a business or, in the case of professionals, 30 days from the start of the practice. This tax needs to be deducted from the salary or wages paid; the amount varies by state but is capped at Rs. 2500 per annum. If you have employees in more than one state, you would need to get a Profession Tax Registration in each state. Even the rate at which it must be paid will vary. This makes it cumbersome for many small businesses to comply with. Do note, however, that many north Indian states do not levy Profession Tax at all. The frequency of return filing depends on the state you’re in. For example, in Maharashtra, returns can be filed annually if the liability is under Rs. 5000, quarterly if the liability is under Rs. 20,000 and monthly if it is above Rs. 20,000. However, in West Bengal, returns need only be filed once every year. This is the approach, in fact, many states are moving toward now. A penalty of 10% of the amount owed can be imposed in Maharashtra in case of delayed payment of Profession Tax. A delay in obtaining the Enrollment Certificate will be charged at Rs. 2 per day.
Here is the procedure for registration in the State of Maharashtra:
- At present, the applications for registration and enrolment under Maharashtra State Tax on Professions, Trades, callings and Employments Tax, 1975 (Profession Tax Act) are being made manually to the Registration Authority. On the receipt of the application, it is verified by the Registration Authority along with the documents submitted.
- Revised Procedure: As a step towards e-governance, the above procedure of manually submitting applications for registration and enrolment is being changed. From 1st April 2012 onwards, the application for registration (PTRC) and enrolment (PTEC) under Profession Tax Act should be electronically uploaded in ‘Form I’ or ‘Form II’ respectively, as provided on the web-site of the Sales Tax Department, Government of Maharashtra i.e. www.mahavat.gov.in. The remaining processes of obtaining registration/enrolment such as verification of documents etc. will remain the same.
Manually filled forms will not be accepted on or after 1st April 2012 except for non-resident employer/person and Government departments. Non-resident employer/person/s and Government Department/s may continue to apply manually.
- Steps to make on line application:a) The applicant needs to log on to the web-site of the Sales Tax Department, Govt. of Maharashtra at www.mahavat.gov.in b.) On the home-page of mahavat.gov.in, the applicant may go through the ‘Instruction Sheets for e-Services -> e-PT Registrations (PTRC and PTEC) for guidance. c.) Thereafter on the home page under ‘e-Services’ the applicant needs click ‘PT e- Registration’ link. d.) Next, “e-Registration Information – information (for PTRC or PTEC Registration…)” page will open. Employer/person should enter/select details such as Name of Applicant, PAN, TAN, status of applicant and Location. Applicants from Greater Mumbai should select location as Mazgaon. e.) For obtaining Registration Certificate (PTRC), for Principal place of business within the State of Maharashtra mentioning of TAN is optional. However, If an employer is applying for Registration certificate for places other than his principal place of business in the State of Maharashtra, then he should also enter TAN number of that other location for which he is making an application. f.) Next, an employer applying for Registration Certificate (PTRC) should select ‘Act’ as ‘PTRC Registration’ whereas person applying for Enrolment Certificate {PTEC) should select ‘PTEC enrolment’ as Act. Then the applicant needs to click ‘next’. g.) The appropriate e-application for Registration in form I or for enrolment in form II under Profession Tax Act, depending upon earlier selection will open. Information in the form should be completely filled in either by entering in the relevant fields or selecting from drop down lists. After filling in complete information applicant should click “submit” button. h.) In case the data in any of the fields is not entered, then the applicant would get error message and would be prompted to enter the said data. i.) After completely filled application form is submitted (uploaded), acknowledgment, containing date and time for attending before Registration Authority along with code/designation and address of the Registration Authority, will be generated. This acknowledgment can be saved on the computer and needs to be printed for producing before the registration authority. The employer/person should also save the filled in application form of registration or enrolment as the case may be and should take printout of it. j.) The proprietor, partner, karta or director, as the case may be, are required to sign at relevant place/places on the print of the application so taken, and submit it to the concerned Profession Tax Registration Authority at the time of verification on given date and time along with relevant documents.
- Grant of Profession Tax Registration/Enrolment Certificate:If the application is found correct and complete in all respects, after verification along with relevant documents, then Registration Authority will generate TIN (Registration/Enrolment Certificate Number under the Profession Tax Act) after verification.Registration/enrolment certificates shall be printed and issued to the employer/person on the appointed day. In case it is found that the applicant is eligible for granting registration/enrolment with liability from any earlier date, then such date will be entered by the Registration officer. In case the application is eligible for granting registration, then the date of uploading the application shall be considered as the date of application for the purpose of determining the effective date of Registration Certificate. Registration certificates will be sent via email and post. The applicants need not visit MSTD offices for procurement of Registration Certificates as the same would be made available on the portal in downloadable format with digital signature of appropriate certifying authority.
- Defective Application:If the application is found defective, then defect memo will be issued and e-mail to applicant. The applicant needs to rectify the defects within 30 days.
- In case the applicant rectifies the defects within 30 days, the Officer will verify and if found satisfactory then TIN would be generated. In this case the date of first application would be taken for the purpose of determining the effective date of RC.
- If the applicant does not rectify the defects shown in defect memo within 30 days, then the application shall be rejected and the temporary profile will be de-activated after 90 days.
6) Rejection of application: If the employer/person is not able to appear on appointed date and time then employer/person should obtain date and time from concerned Registration Authority within ten days. The details of Registration Authorities along with the designation and their telephone numbers are available on home page under e-Services under Instruction Sheets for e-Services-> e-PT Registrations (PTRC and PTEC). The employer/person should contact the Registration Authority whose designation appears on the acknowledgement. It may be noted that only one request for change of date shall be entertained. If the employer/person does not attend before Registration Authority on appointed date and time along with acknowledgment and copy of relevant filled in & signed application form or does not obtain appointment within next ten days, then the application shall be rejected.
- In Mumbai, previously work of Registration/Enrolment under the Profession Tax Act was carried out at Sub Urban VikrikarBhavanBandra and VikrikarBhavanMazgaon. However from 1st April 2012 onwards it will be carried out at VikrikarBhavan, Mazgaon only.
- Abundant care is being taken not to give appointments on public/local holidays. However, in case a public holiday/local holiday gets declared on the given date of appointment then employer/person should attend on ‘first working Friday* subsequent to the said date of public holiday/local holiday.
- Applicants covered under Entry No. 13 of Schedule I of the Profession Tax Act i.e. holders of permit for transport vehicle granted under the Motor Vehicles Act 1988, should directly approach the concerned RTO for enrollment certificate. Such application will not be processed by the Sales Tax Department.
