Ahmedabad: Amid rising complaints about delays and rejections in GST registrations, the Central Board of Indirect Taxes and Customs (CBIC) issued a fresh directive to field officers across India, cautioning them against harassing genuine applicants with avoidable document demands and presumptive queries.
The new instruction, issued on April 17 by the GST policy wing, supersedes the earlier guidelines of June 2023. It aims to strike a balance between curbing fraudulent registrations and ensuring that bona fide applicants are not subjected to arbitrary delays.
The CBIC observed that officers often asked for additional documents — such as PAN cards or photographs of landlords, or water bills not mandated by the application process — and raised irrelevant questions. These included queries about the residential address of the applicant being outside the registration state, or doubts about whether a particular business activity can be run from the given premises. “This results in unwarranted delays and even rejection of applications, defeating the ease of doing business objectives,” the board noted.
The revised instructions provide a clear checklist of documents that officers can seek, particularly around the principal place of business. In cases of owned premises, just one ownership proof — such as a property tax receipt or electricity bill — is enough. If the premises are rented, a valid rent agreement along with one ownership document from the lessor will suffice. Officers have been clearly told not to ask for the lessor’s PAN, Aadhaar or photographs.
In shared or consent-based premises, a simple consent letter and proof of ownership from the consenter, with an ID, will be accepted. If no rent agreement is available, an affidavit before a magistrate or notary, along with utility bills in the applicant’s name, can be submitted. On business constitution, the circular clarifies that a partnership deed is sufficient proof for firms and no extra documents like trade licences or MSME certificates should be asked for.
The state goods and services tax (SGST) department in Gujarat has been issuing GSTINs through GST Sewa Kendra (GSK), in a bid to curb the menace of fake billing and bogus GST registrations.
Sources in the department said that the instruction will help curb incidents of harassment if any; however, the number of approvals may delay the application process too.
Crucially, officers have also been reminded to process applications that are complete and not flagged as risky within seven working days, and for flagged cases, to complete physical verification and registration within 30 days. The move is expected to provide relief to startups, small businesses and professionals across Gujarat who were facing hurdles in securing GST registration.
Deep Thakkar, a chartered accountant and co-chairman of the GCCI indirect tax committee, said, “We understand that the checks and balances in availing registration under GST Act are important tools to weed out fake entities. However, at the same time, it is equally necessary that genuine taxpayers should not be hassled. We had demanded the state and central govt issue a binding SOP for GST registration and its amendments to ensure ease of doing business.”
GCCI has sent a representation regarding various issues related to GST to the state and central GST department. It stated, “CGST and SGST rules mandate an exhaustive and suggestive list of documents that a taxpayer is required to submit along with the application for registration. However, it is our general experience that officers responsible for processing GST registration do not adhere to this list and seek various other documents, which are often difficult for taxpayers to produce.”
Karim Lakhani, a chartered accountant, said, “The new guidelines by the department are a welcome step. Genuine businesses found it difficult to obtain GST registration, but now the department has clearly said that if the application does not fall in the risky category, the registration should be given in seven days. This will help increase new registrations and ultimately, increase businesses and govt revenue as well.”
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“We had demanded that guidelines be issued for new registrations. It was difficult for new businesses to provide all the documents because officers used to ask for those not included in the suggestive list.” – Deep Thakkar, co-chairman, GCCI indirect tax committee
“Genuine businesses also found it difficult to get registered. The guidelines will improve the ease of doing business. New business registrations will go up and business activities as well as govt revenue will increase.” – Karim Lakhani, chartered accountant