GST Registration Woes: Complexity Amidst Clarity
Setting up a business in India involves navigating through a maze of registrations and compliance requirements. Each registration entails separate set of procedures and documents, thus creating a fragmented experience for businesses. Among these, registration under the Goods and Services Tax (GST) law is a critical step.
As per the GST provisions, every supplier making taxable supplies of goods and/or services is required to obtain a GST registration, subject to certain threshold limits. Like any other laws in India, the process of registration under the GST law includes submission of an application along with supporting documentary evidence, performance of checks by the respective tax authorities, seeking clarifications/supporting documents from the applicant etc. The GST registration process, while intended to be straightforward, often becomes cumbersome due to:
- Submission of extensive documentation
- Repeated clarifications sought by tax officers
- Inconsistent practices across jurisdictions
In recent years, the Government has faced a surge in cases of fake GST registrations leading to bogus billings and fraudulent Input Tax Credit (ITC) claims. To combat this, measures such as seeking additional details to cross examine the genuineness of registration application, Aadhaar authentication, biometric verification, and nationwide drives against fake registrations have been introduced. While these steps aim to curb fake registrations, they have also inadvertently impacted genuine taxpayers. Delays in registration affect business operations, contract execution, and overall ease of doing business.
Owing to this, various representations were made to the Central Board of Indirect Taxes and Customs (CBIC) regarding difficulties being faced by the applicants in getting the GST registration, mainly on account of varied practices being followed by the officers for verification and nature of clarifications being sought with respect to the information submitted in the application FORM GST REG-01. Further, additional documents which are not prescribed in the ‘List of Documents’ appended to the said form, were sought leading to delay in processing as well as rejection of applications.
Recognizing these challenges, the CBIC issued two key instructions:
Instruction No. 03/2025-GST dated 17 April 2025
The instruction emphasizes that:
- In respect of principal place of business, the officers should call for the documents (as prescribed in FORM GST REG-01) basis the nature of premises viz. owned, rented/leased, shared, or SEZ.
- In relation to constitution of business, no additional document like the UDYAM certificate, MSME certificate, Shop Establishment certificate, Trade license etc. should be sought from the applicant.
- Further, unwarranted presumptive queries which are not related to the documents or information submitted by the applicant – such as questioning the applicant’s residential address or business activity feasibility – have been discouraged.
- Further, to the extent possible, the authenticity of the documents furnished as proof of address may be cross verified from the publicly available sources, such as websites of the concerned authorities including land registry, electricity distribution companies, municipalities, and local bodies, etc.
- Where applications are not flagged as ‘risky’ and the same are found to be complete and without any deficiency, the application should be approved within 7 working days of submission of application.
- In cases where the applicant has undergone Aadhaar authentication and is flagged as ‘risky,’ or the applicant fails to undergo/does not opt for Aadhaar authentication, or the officer deems it fit to carry out physical verification (with prior approval from senior authorities), the registration shall be granted within 30 days of submission of application after physical verification of the place of business.
- If any document apart from the listed documents is required to be sought, the officer shall seek the same only after approval from the concerned Deputy/Assistant Commissioner.
Instruction No. 04/2025-GST dated 2 May 2025
The CBIC has set up a redressal mechanism for the applicants having grievance in respect of any query raised in contravention of the aforesaid instructions, regarding grounds of rejection of application etc. The applicant can approach the jurisdictional Zonal Principal Chief Commissioner/Chief Commissioner in this regard. Where the grievance pertains to State jurisdiction, the same shall be forwarded to the concerned State jurisdiction and a copy endorsed to the GST Council Secretariat.
Our Comments
These instructions aim to bring uniformity, reduce taxpayer harassment, and ensure timely processing of genuine applications. However, the ground reality remains challenging. These instructions, though binding on departmental officers, have not fully translated into a consistent practice. Many applicants continue to face unnecessary hurdles during the registration process. Officers are still issuing notices demanding irrelevant or excessive documentation that bears no direct connection to the information provided in the registration application. Moreover, the applicability/relevance of the said instructions to the State jurisdictional officers handling such registration applications is questionable. This not only delays the process but also creates frustration and uncertainty for legitimate businesses.
While the Government has taken commendable steps toward enhancing the ease of doing business, the journey towards achieving a truly seamless and efficient registration system is far from complete. The persistence of outdated practices and discretionary queries suggests that reforms must extend beyond the issuance of Circulars and instructions. There is a pressing need for systemic change - one that is rooted in accountability, transparency, and uniformity in implementation.
To truly transform GST registration into a facilitator of business growth rather than a bureaucratic bottleneck, a collaborative approach is essential. This involves active engagement between taxpayers, tax officers, and technology platforms. Leveraging automation, data analytics, and centralized monitoring can help eliminate inconsistencies and ensure that the registration process is both efficient and equitable. Only then can businesses focus on what truly matters - innovation, expansion, and contributing to the nation’s economic development.