Letter of Authorization for GST: Format, Sample, and Requirements

Large companies that operate across geographies usually have multiple decision-makers. In this scenario, it is also important to share the authority. The letter of authorisation for GST is a tool to share the power for GST-related business operations with another person or entity. This blog discusses the letter of authorization in GST, its uses, format, etc.

What is a Letter of Authorization (LOA) in GST?

A Letter of Authorization (LOA) for GST is a legal document that empowers a different person or entity to deal with matters related to GST compliance on behalf of the business. In other words, the LOA gives the authority to represent the business as a taxpayer for GST purposes legally.

Suppose a business operates in different regions of India. It is certainly not possible for just one person to represent the business regularly in other geographical locations. So, what’s the solution? Providing a letter of authorisation for GST to local individuals or entities. It can reduce the burden on operations and make them smooth.

Now, what is the letter of authorization in GST used for? Here are the uses of LOA:

• GST Registration
• Filing GST Returns
• Communicating with the GST Authorities
• Providing submissions and explanations to the GST Authorities
• Legally represent the taxpayer

Purpose of Letter of Authorization in GST

GST rules are elaborate and complex. Companies prefer to delegate this work to professionals to avoid legal and compliance issues. The letter of authorization for GST allows the business to appoint professionals and employees who can handle the intricacies of GST locally.

Once an individual gets the letter of authorisation, s/he can manage critical GST tasks on behalf of the taxpayer. Here’s what an LOA provides:

• Legal Authority: It gives the individual or entity legal authority to act on behalf of the taxpayer for GST-related purposes.
• Ease of Compliance: Time and accuracy are two fundamentals regarding taxation compliance. When a trusted person is assigned the task, it ensures:
  • Accuracy in data
  • Timely filing of returns
  • Timely payment of GST
  • Lesser penalties
• Effective Communication: With the letter of authorisation for GST, representatives can directly communicate with GST authorities. It helps in:
  • Proper communication
  • Quick response to queries
  • Reduced delays in compliance
  • Avoiding miscommunications

Importance of Letter of Authorization in GST

By now, you have understood the letter of authorization in GST, but why is it so crucial for businesses to issue LOAs? Here’s why:

• Ease of Registration: Businesses can register for GST without hassle using professional help. A letter of Authorisation for GST registration for HUFs and companies allows the procedure to be carried out easily. For example, a company can authorise its employee to handle the GST-related work without overburdening the CFO.
• Ensures Legal Compliance: The authorised individual is a professional or an entity that hires professionals to ensure that legitimate information is provided and timely compliances are done without errors. It helps businesses deal with the complex regulatory framework of GST.
• Minimises Risks: The professionals appointed using the LOA can handle GST compliances. They can also communicate better with the GST authorities, reducing the risk of errors and omissions.
• Authorises Critical Actions: Professionals holding the letter of authorisation for GST can authorise critical GST actions like:
  • Filing GST Returns
  • Responding to GST notices
  • Representing the business during GST Audits
• Streamlines Business Transactions: Large organisations with operations spanning various states can easily manage their compliances. The LOA delegates legal control and accountability to professionals.

When and Why is a Letter of Authorization Needed?

How can a business gain the most out of the letter of authorization for GST? What are the purposes for which LOA can be used? Here are some scenarios:

• GST Registration: Businesses can easily register themselves using the letter of authorisation for GST registration. The authorised person or entity follows the application process to ensure the business is essential.
• Filing GST Returns: As the business grows, the taxpayer can only keep track of some of the filing processes and deadlines. An authorised professional can file GST returns with accurate information within the deadline.
• Responding to GST Notices: The authorised person can communicate with the GST officials and respond to any notice or demand raised by the department.
• GST Audits: Getting your books audited can be a challenge without professional help. A letter of authorisation for GST allows you to appoint professionals who can handle auditors' queries and make the process smoother. 
• Processing the Refunds: Filing returns and getting a refund requires expertise in paperwork and following the processes. An authorised person can easily take care of it.

Key Elements of a Letter of Authorization in GST

Let’s discuss the key components that need to be a part of the letter of authorization for GST:

Format of Letter of Authorization in GST

Here’s a format for the letter of authorisation for GST:

[Company’s Letterhead]

Date: [DD/MM/YYYY]

To,

The GST Department

[Address]

Subject: Authorisation to Act on Behalf of [Company Name] for GST Matters

Dear Sir/Madam,

I, [Your Name], the [Your Designation] of [Company Name], holding GSTIN [Your GSTIN], hereby authorise [Authorised Person’s Name] to act on behalf of our company for all matters related to GST compliance. This authorisation includes, but is not limited to, filing GST returns, responding to GST notices, and communicating with GST officers.

Details of Authorised Person:

• Name: [Authorised Person’s Name]
• Designation: [Authorised Person’s Designation]
• Contact Details: [Authorised Person’s Contact Information]

This authorisation is valid from [Start Date] until [End Date] or until further notice.

Yours sincerely,

Signature    Signature   

[Name of Authoriser] [Name of Authorised Signatory]

[Designation] [Designation]

[Company Name] [Company Name]

Place:

Date:

How to Submit a Letter of Authorization in GST?

You can follow these steps to submit the letter of authorization for GST:

• Prepare the letter
• Upload it on the GST Portal
• Submit the Required Documents
• Maintain a copy in your records

The letter of authorisation for GST is a pivotal document for businesses. Using this letter, they can appoint their legal representatives for GST purposes. As a result, it can become easier to regularise GST activities and navigate the complexity of tax compliances.