Letter of Authorization for GST: Format, Sample & Rules

Key Takeaways

• A Letter of Authorization for GST can document the authority given to a person to handle specified GST-related activities on behalf of a business.
• A GST Practitioner is authorized through FORM GST PCT-05 under Section 48 read with Rule 83(6) of the CGST Rules. A general authorization letter does not replace PCT-05 for GST Practitioner authorization.
• A GST Practitioner is identified by an Enrolment Number, while the taxpayer is identified by its GSTIN.
• FORM GST PCT-05 specifies the activities the taxpayer authorizes the GST Practitioner to perform and includes the practitioner's consent.
• For GST registration, a Letter of Authorization can serve as proof of appointment of an Authorized Signatory. In applicable cases, a board or managing committee resolution with an acceptance letter may also be used.

When Do You Need a GST Authorization Letter?

A GST authorization letter helps a business document who is authorized to handle specified GST-related activities on its behalf. The need for an authorization and the form it takes depend on the GST procedure and the person's role. The main purposes include:

1. Appoint an Authorized Signatory: A business can use a Letter of Authorization as proof of appointment of an Authorized Signatory during GST registration, where applicable.
2. Define the Scope of Authority: The authorization can specify the GST-related activities the person is permitted to handle on behalf of the business.
3. Maintain Authorization Records: A written document provides a record of the person authorized to act for the business and the scope of that authority.
4. Authorize a GST Practitioner: A GST Practitioner is separately authorized through FORM GST PCT-05, which specifies the activities the taxpayer permits the practitioner to perform.
5. Update or Withdraw Authorization: Where the authorized person or GST Practitioner changes, the relevant authorization or GST registration details should be updated as required. FORM GST PCT-05 also provides for withdrawal of a GST Practitioner's authorization.

Who Can Sign the GST Authorization Letter?

The GST Authorization Letter should be signed by a person who is authorized to act for the business. The person signing and the person being appointed as the Authorized Signatory may be different.

• Proprietorship: The proprietor or a person authorized by the proprietor
• Partnership Firm: A partner or another person authorized by the partners
• LLP: A designated partner or another authorized person
• Company: A director or another person authorized by the company
• Trust or Society: A trustee or another authorized office-bearer

Steps to Draft a General GST Authorization Letter

A general GST authorization letter should clearly identify the business, the authorized person, and the permitted activities. The exact requirements depend on the purpose of the authorization and the person's role.

Step 1: Add the Heading and Date

Use a clear heading such as “Letter of Authorization” and mention the date of issuance.

Step 2: Identify the Business and Authorizing Person

State the legal name of the business and the name and designation of the person granting the authorization. Include the GSTIN if the business is already registered under GST.

Step 3: Provide the Authorized Person's Details

Mention the authorized person's full name, designation or role, and contact details. Include the GST Practitioner Enrolment Number only if the person is an enrolled GST Practitioner.

Step 4: Define the Scope of Authorization

It is advisable to clearly mention the GST-related activities the person is authorized to handle. Depending on the purpose, these may include:

• Handling specified GST registration-related activities
• Preparing or submitting specified GST documents or applications
• Communicating with the GST Department on specified matters
• Handling refund-related applications, where authorized
• Performing other specifically authorized GST-related activities

It is better to keep the authorization limited to the specific responsibilities being assigned rather than granting broader authority than required.

Step 5: Add the Validity and Signature

State the effective date of the authorization and, where appropriate, its validity or conditions for withdrawal. Include the name, designation, signature, date, and place of the person granting the authorization.

For companies and other entities, the GST procedure may require a Board or Managing Committee resolution, acceptance letter, or other supporting authorization. The GST registration checklist specifically recognizes a Letter of Authorization as proof of appointment of an Authorized Signatory.

Validity of the GST Authorization Letter: A general GST authorization letter does not have a fixed validity period prescribed under GST law. Its validity can be based on the period or conditions stated in the letter. It may also end when the authorization is withdrawn or the authorized person's role changes. 

Sample Format of a GST Authorization Letter

The following is a general format that can be adapted based on the purpose of the authorization and the type of business. It is not a government-prescribed universal format.

LETTER OF AUTHORIZATION FOR GST

Date: [DD/MM/YYYY]

To Whom It May Concern

Subject: Authorization of [Authorized Person's Name] for Specified GST Matters

I/We, [Name of Proprietor/Partner/Director/Authorized Person], acting as [Designation/Status] of [Legal Name of Business/Entity], having its principal place of business at [Business Address] and GSTIN [GSTIN, if applicable], hereby authorize [Authorized Person's Full Name], [Designation/Role], to act on behalf of the business for the following GST-related activities:

• Handling specified GST registration-related activities
• Preparing or submitting specified GST documents and applications
• Communicating with the GST Department on matters covered by this authorization
• Handling specified refund-related applications, where applicable
• [Add any other specific GST activity being authorized]

This authorization is limited to the activities stated above and does not confer authority beyond the scope permitted under applicable law.

This authorization will remain valid from [Effective Date] until [End Date, if applicable] or until withdrawn in writing by the business.

Authorized by:

Name: [Name]
Designation/Status: [Designation]
Business/Entity Name: [Legal Name]
Signature: [Signature]
Date: [Date]
Place: [City, State]
Contact Details: [Phone/Email]

FORM GST PCT-05: The Official Mechanism for Appointing a GST Practitioner

When a taxpayer appoints a GST Practitioner, FORM GST PCT-05 is used to authorize the practitioner. It also allows the taxpayer to withdraw the authorization under Section 48 read with Rule 83(6) of the CGST Rules.

• Legal Basis: FORM GST PCT-05 is prescribed under Rule 83(6) for authorizing or withdrawing a GST Practitioner's authorization.
• Part A: The taxpayer's authorized signatory authorizes or withdraws the practitioner using the practitioner's Enrolment Number. The number is issued after enrolment through FORM GST PCT-01 and approval in FORM GST PCT-02.
• Part B: The GST Practitioner provides consent to act for the taxpayer for the activities selected in PCT-05.
• Nine Authorized Activities: PCT-05 allows the taxpayer to select the following activities:
  • Furnish details of outward supplies.
  • Furnish monthly, quarterly, annual, or final returns.
  • Make deposits into the electronic cash ledger.
  • File refund claims.
  • Apply for amendment or cancellation of GST registration.
  • Furnish information for e-way bill generation.
  • Furnish details of challan in FORM GST ITC-04.
  • Apply for amendment or cancellation of enrolment under Rule 58.
  • File an intimation to pay tax under the composition scheme or withdraw from it.
• GST Practitioner vs authorized Representative: The nine PCT-05 activities are different from the authorized representative categories under Section 116. These include a relative or regular employee, advocate, practising CA, CMA or CS, eligible retired tax officer, or GST Practitioner.
• Taxpayer's Responsibility: The taxpayer remains responsible for the correctness of information furnished in returns or other documents under the proviso to Section 48(3) of the CGST Act.
• Withdrawal: The taxpayer can use FORM GST PCT-05 to withdraw the GST Practitioner's authorization.

Common Mistakes to Avoid in GST Authorization Letters

Businesses can face confusion when an authorization letter contains incorrect details, unclear authority, or does not follow the applicable GST procedure. Avoid these common mistakes:

1. Confusing GSTIN with GST Practitioner Enrolment Number: A GST Practitioner is identified by an Enrolment Number, while the taxpayer is identified by a GSTIN.
2. Using a General Letter to Appoint a GST Practitioner: FORM GST PCT-05 is the prescribed mechanism for authorizing or withdrawing the authorization of a GST Practitioner. A general authorization letter does not replace it.
3. Confusing an Authorized Signatory with a GST Practitioner: An Authorized Signatory is the person authorized to sign or authenticate GST filings for the taxpayer. A GST Practitioner is a separately enrolled professional who can perform activities authorized by the taxpayer.
4. Using a Vague Scope of Authorization: Clearly state the GST-related activities the authorized person can handle. Avoid granting broader authority than intended.
5. Providing Incorrect or Inconsistent Details: Check the business's legal name, GSTIN where applicable, authorized person's name, designation, and other relevant details before submitting the document.
6. Missing Required Signatures or Dates: Include the signatures, names, designations, and dates required for the relevant authorization.
7. Using the Wrong Authorization Process: Check whether the particular GST procedure requires a general authorization letter, proof of appointment of an Authorized Signatory, or a prescribed form such as FORM GST PCT-05.
8. Failing to Update GST Records After a Change: When an authorized signatory or other registration details change, the taxpayer should update the GST registration through a non-core field amendment, which is generally auto-approved after verification. Changes to core fields, such as the principal place of business or the addition or removal of partners or directors, require tax-officer approval.

Need help with a GST Authorization Letter? Get assistance with requirements, authorized signatory details, PCT-05 authorization, and GST registration documents.