Difference Between TIN, GSTIN, TAN, VAT, PAN, DSC, DIN

Priyanshi Shah August 29, 2020January 16, 2023 0 Comments

If the entrepreneur wants to start his/her own business then he/she should have the knowledge regarding the legal document which also includes to know the basic difference between these 6 terms i.e. TIN, GSTIN, TAN, VAT, PAN, DSC, DIN.

Here, are some points which help you to understand these 6 terms easily and clearly.

1. Taxpayer Identification Number (TIN)

The full form of TIN is the Taxpayer identification number. TIN or VAT/CST is required for selling the VAT eligible products. It is an 11-digit number and each state government handles this department of their respective states and only they can issue TIN number.

Objective- basically the burden of tax on traders/retailers etc shifts to the end customers and after recovering it from them they pay to the state government and to recover that tax we have to issue a tax invoice for which TIN number is necessary.

How does TIN or VAT number work?

Input tax: Input tax is paid by the seller to the wholesaler for the purchase of goods.

Output tax: Output tax is received by the seller from the end customers to sell their goods.

Documents required for the TIN or VAT number

Personal id and address: Pan card, Adhar card, or voter id.

Firm address proof: Gas bill copy, electric bill copy, rent agreement, sale deed, etc.

Security deposit or surety of person: in some states, there is security and surety concept where you have to provide a Fixed deposit or bank guarantee.

2. Goods and Services Tax Identification Number (GSTIN)

Any dealer registered under state VAT law has a unique TIN number issued by the respective state tax authorities. Where a service provider is assigned a service tax registration number. Going forward all these taxpayers will get consolidated into one single platform for compliance and administration purposes and will be assigned registration under a single authority. All of these businesses will be assigned a unique Goods and services tax identification number. Now let’s understand GSTIN briefly.

Every taxpayer will be assigned A STATE-wise PAN-based GSTIN which will be 15 digits.

First 2 digits will represent the State code as per the census held in 2011.

Example census state code for Maharashtra-27, Bihar-10 so if a business has its operation in Maharashtra then the first 2 digits of GSTIN for business in Maharashtra is 27

The next 10 digits will be the PAN of the taxpayer. The 13^th digit indicates the number of registrations an entity has within the state with the same PAN. It will be an Alpha-numeric number and will be assigned on the basis of the number of registrations a legal entity has within one state.

The 14^th recently has no use and therefore will be “Z” by default and the last digit will be the cheque code.

Also Read: How to Calculate Company Valuation [Full Guide]

3. Tax Deduction or Collection Account Number (TAN)

Tax deduction account number is the 10-digit alpha-numeric number required to be obtained by all the persons who are responsible for deducting or collecting tax at source. It is compulsory to quote TAN for: TDS/TCS returns, TDS/TCS payment challan.

First 3 digits are alphabetic series, which stands for the Name of States.

The fourth digit represents the first alphabet of the Name of the Company.

Next five digits are the sequential number.

The last digit is the Alphabetic check number.

An application for the allotment of TAN number shall be made within one month or from the end of the month in which tax was first deducted or collected.

4. Permanent Account Number (PAN)

PAN card is the 10-digit alpha-numeric number. It is unique, national, and permanent. It is unaffected by the change of the address. PAN card is issued by the income tax department. It is issued for the purpose of identification and to track all the monetary information of that entity. It is illegal to own more than one PAN. It acts as an important photo Id proof. PAN card helps in the transaction, opening a bank account, buying or selling assets, etc. PAN card is used for accounting purposes on receivable taxable salary. Aids in the filing of income tax returns. And also used as documentary proof for opening DEMAT account for share trading.

The first 5-digits are alphabetical the next 4-digits are numerals and the last digit is an alphabet.

First 3-digit are a sequence of alphabets

The 4-digit informs about the type of the holder of the card. The 5-digit is the first letter of the surname or the last name in case of personal PAN card and first alphabet in the case of an organization, entity, or trust, and the last digit is the alphabetic check digit.

5. Digital Signature Certificate (DSC)

Digital signature certificate is the electronic format of physical or paper certificates for e.g. driving license, passport, etc. Certificates work as an identity proof of an individual for certain purposes for e.g. passport identifies the person as the citizen of the particular country. Similarly, Digital signature certificates can be presented electronically to prove someone’s identity, to access information or services on the internet, or to sign certain documents digitally. Various departments such as the IT department, foreign trade department, etc use DSCs as authorization. There are three types of class in DSC as following:

Class 1: Issued to individual/private subscribers and are used to confirm usernames and email contact details lie within the database of the certifying authority.

Class 2: Issued to the director/signatory authorities of the companies for the purpose of e-filing with the registrar of the companies. Certificates are mandatory for individuals who have to sign manual documents.

Class 3: Required for e-tendering, which is a procurement process that is conducted online.

6. Director Identification Number (DIN)

The Director Identification Number was introduced with the insertion of Sections 266A to 266G of Companies act 2006.

Every individual intending to be appointed as the director of the company shall make an application for the allotment of the Director identification number to the Central government in the prescribed form along with fees. The Central government shall allot a director identification number

It is an 8-digit unique number and one person will be allotted only one DIN and it can be used for lifetime. It is a prerequisite to be a director in the Indian Company.

The applicant must have DSC before applying for DIN.

Also Read: Types of Company [Explained With Example]