New Guidelines Intend To Simplify GST Registration Process And Reduce Taxpayer Harassment

The Central Board of Indirect Taxes and Customs (CBIC) has released new guidelines to simplify the Goods and Services Tax (GST) registration process and make it more uniform. The intention is to avoid harassment of genuine taxpayers who usually experience delays, rejections, and repeated demands for unnecessary documents.

In a circular issued on April 17, 2025, CBIC acknowledged that the registration process was taking a toll. Officers were adopting varying practices while checking applications submitted in FORM GST REG-01. Unnecessary clarifications and requests for documents were made many times, causing delay in registration and sometimes even rejection. Taxpayers reported harassment and confusion, particularly due to the lack of a uniform list of documents and procedures across states.

These issues arose mostly due to over-efforts in curbing frauds, like dummy companies trying to avail of Input Tax Credit (ITC) with no business transactions. This resulted in too-cautious and random investigations by GST officers, complicating registration for honest enterprises. No business can raise bills or claim ITC unless it is GST-registered, greatly hampering business operations.

Highlights of the New Guidelines:

1. Minimise Needless Clarifications

CBIC directed officials to refrain from asking presumptive questions—questions based on assumptions and not the actual documents or information presented. For instance, officials raised issues such as why the applicant's address is not in the same city as the registration or why certain products are mentioned when they are prohibited in that state. These questions are invalid unless they are directly connected to the documents presented.

2. Standardisation of Required Documents

Previously, various GST officers requested varying sets of documents, leading to confusion. Now, the circular clarifies that officers should strictly adhere to the list of documents specified in FORM GST REG-01. Required documents are also different based on whether the premises of the business are owned, rented, or shared:

• Owned premises: One document, such as a property tax receipt, municipal khata copy, or electricity or water bill, that establishes ownership will suffice.

• Rented premises: A registered rent/lease agreement along with one ownership document of the lessor (such as a property tax receipt or electricity bill) will suffice. Identity proof or photos of the lessor should not be requested unless the agreement is not registered.

• Shared or other premises: A plain paper consent letter from the owner of the property, with proof of identity and a normal ownership document, will be acceptable.

• No rent agreement: The applicant's affidavit and an electricity or similar bill in their name will be sufficient.

• Special Economic Zone: If the business is within a Special Economic Zone (SEZ), government-issued documents or certificates will have to be uploaded.

3. Clarity on Business Constitution Documents

CBIC also discussed problems regarding the authentication of the business type. For instance:

• Partnerships require only filing the partnership deed.

• Societies, trusts, clubs, and government agencies must upload their registration certificate or proof of constitution.

• Officers should not ask for additional documents such as Udyam certificate, MSME registration, trade licenses, or shop establishment certificates unless they're listed in the official list.

4. Approval Timelines

For facilitating quick registration:

• If the application is not identified as risky and is in proper order, the officers are required to approve it within seven working days.

• In case the application is identified as risky, or Aadhaar verification has not been done, or the officer thinks physical verification is necessary, registration shall be completed within 30 days, upon due verification. 

5. Rules for Verification Clarified

For suspect applications or those requiring additional scrutiny, physical inspection of the business premises is permitted. But this has to be carried out with the sanction of a senior officer (Assistant Commissioner or above), and the procedure has to adhere to the established rules under GST law. This is to make sure that only genuinely suspicious applications are subjected to physical verification.

6. Authenticity and Accuracy of Documents

While CBIC would prefer officers to shun overreaching, it also stresses the importance of cautious examination. Officers should verify that the documents are clear, complete, and consistent with the details furnished. They should verify the correctness of addresses and ownership claims through public sources, including websites of local authorities or power companies.

Why These Guidelines Matter

Honest business owners had been caught previously in a web of overly complex rules and uneven practices. In trying to prevent bogus businesses, officers at times made it so cumbersome that legitimate applicants experienced delays or had to provide additional, unrelated documents.

The new circular issued by CBIC is a step in the right direction to streamline the process and achieve uniformity between states and jurisdictions. By specifically enumerating what documents are required in what situations, and directing officers not to demand anything more than that, the circular seeks to accelerate registration and ease the burden on small businesses and entrepreneurs.

Meanwhile, the regulations preserve protections against fraud. Physical checks and enhanced scrutiny can continue to be made on dubious applications—but only if justified and subject to supervision. 

This middle ground between combating fraud and aiding legitimate businesses lies at the center of the new guidelines.

Briefly, the new guidelines of CBIC attempt to address long-pending problems in the GST registration process. With a standardised list of admissible documents, timeframes for approval, and prohibition on avoidable queries, the businesses can now anticipate a seamless and transparent registration process. The change has the potential to largely reduce delays, enhance ease of doing business, and facilitate taxpayers' trust in the GST regime.