Stox N Tax

A Comprehensive Reform for GST Registration Process – Standardisation, Speed, and Scrutiny

1. Introduction

GST registration is the foundational compliance requirement for any taxable person under the GST regime. Over the past few years, multiple complaints have emerged from genuine applicants regarding undue delays, arbitrary queries, and inconsistent documentation practices followed by tax officers during registration verification.

To address this, the Central Board of Indirect Taxes and Customs (CBIC) issued Instruction No. 03/2025-GST, laying down clear, uniform, and legally backed guidelines for processing Form GST REG-01 applications.

This article analyses the implications of the instruction, outlines the key procedural refinements introduced, and explains how both officers and applicants are expected to comply going forward.

2. Background & Objective

There have been two contrasting concerns:

  • Tax evasion via fake firms created solely for ITC frauds.
  • Genuine businesses facing registration hurdles due to inconsistent demands from field officers.

The objective of this Instruction is to create a balanced registration framework that:

  • Prevents fraudulent entries into the GST network.
  • Simplifies the process for legitimate applicants.
  • Ensures accountability and transparency in officer conduct.

This instruction supersedes Instruction No. 03/2023-GST dated 14th June 2023.

3. Key Guidelines for Registration Process

A. Principal Place of Business – Documentary Evidence

The instruction provides case-wise clarity on what should suffice as proof:

  • Owned Premises:
    Any one document such as:
    • Latest property tax receipt,
    • Electricity bill,
    • Municipal khata copy,
    • Or even a water bill or state-prescribed document indicating ownership.
    • No additional documents or physical copies to be sought.
  • Rented Premises:
    • Rent/Lease Agreement + Any one ownership document of lessor.
    • If agreement is not registered, then identity proof of lessor is also required.
    • If utility bill is in tenant’s name, that suffices (no lessor ID required).
  • Shared/Relative Premises:
    • Consent letter from owner + identity proof + ownership proof.
    • No presumptive rejections based on relationships (e.g., spouse or relative).
  • No Agreement Cases:
    • Affidavit before magistrate + utility bill in applicant’s name.
  • SEZ Units:
    • Appropriate SEZ allotment/certification required.

B. Constitution of Business

  • Partnership Firms:
    Only Partnership Deed is required.
  • Other Entities (Society, Trust, AOP, etc.):
    Relevant registration certificate.
  • No additional business licenses (MSME, trade license etc.) to be demanded unless specified.

4. Avoiding Arbitrary and Presumptive Queries

CBIC has expressly prohibited officers from:

  • Questioning business activity based on HSN Code restrictions in that State.
  • Raising doubts if applicant or authorized signatory resides in a different State.
  • Assuming that business cannot be conducted from residential premises.
  • Asking for non-listed documents unless approved by AC/DC rank officer.

Such queries have been declared presumptive and not permissible under the new instruction.

5. Processing Timeline & Physical Verification

Standard Approval:

  • For non-risky, complete applications → 7 working days.

Physical Verification Cases (within 30 days):

  • Aadhaar-authentication not done or failed.
  • Applicant flagged as risky via backend algorithms.
  • Officer deems it fit (with AC-level approval).

Verification steps include:

  • GPS-enabled photographs.
  • Specific existence report.
  • Portal reassignment in case of wrong jurisdiction.

Timely Action:

  • Queries in REG-03 must be issued within 7 days (for non-risky) or 30 days (for flagged cases).
  • Reply in REG-04 within 7 days.
  • Officer must approve or reject application within 7 days of reply.
  • No deemed approvals to occur due to officer inaction.

6. Officer Accountability and Supervision

Senior officers are advised to:

  • Periodically review pending applications.
  • Ensure sufficient manpower for timely disposal.
  • Penalise officers violating instruction protocols.
  • Issue local trade notices listing acceptable documents (state-specific).

7. Implications for Taxpayers and Professionals

For Businesses:

  • Clarity on required documents.
  • Relief from ad hoc queries and delays.
  • Reduced compliance burden especially for small and new businesses.

For Professionals (CAs, CS, Tax Practitioners):

  • Easier representation and application drafting.
  • Better support for clients via legally aligned documentation.
  • Ability to challenge wrongful rejections or excessive scrutiny with reference to this instruction.

8. Conclusion

CBIC’s Instruction 03/2025-GST is a commendable effort to bring consistency and legality to the GST registration process. It reflects a clear shift towards risk-based governance, leveraging technology while ensuring procedural fairness.

Going forward, GST practitioners must leverage this instruction not only for smoother registration filings but also to advocate client rights in case of unreasonable officer conduct. Additionally, training and capacity building among officers at ground level will be key to ensuring this instruction is effectively implemented.

Leave a comment

Timeline of events