Lately, it has been observed that the process of obtaining approval for new GST registration is taking longer than usual. The Assistant Commissioner has issued GST REG-03, which is a notice seeking further information, clarification, or documents related to an application for certain new registrations. The department offers few reasons as detailed below:



i. Personal information furnished doesn’t match with AADHAR



ii. AADHAR of a different State not verifiable



iii. Place of business defined is incorrect



iv. Applicant not reachable on given mobile number



v. Incomplete Sublease agreement



vi. No objection from lessor is not specific



Genuine applicants have been experiencing difficulties in the registration process due to delays caused by this requirement for additional information, resulting in hardship. In today’s global context, where WFH home has become the new norm, especially for the service industry, denying the application of a legitimate taxpayer creates obstacles in conducting business smoothly. The new model of sharing workspace and co-working spaces, where multiple individual businesses operate within one premise, presents a compelling justification for registration. Upon inquiry with departmental officials, it was revealed that officers are being cautious in approving registrations to prevent them from being granted to fraudulent applicants who may obtain them by misusing the identity of other individuals. To safeguard the interests of revenue, the registration process is undergoing more stringent screening measures.






There have been cases where the buyer of goods or recipient of services was denied input tax credit due to the nonexistence of the seller or service provider. In some instances, the supplier had valid registration at the time of providing services but later discontinued their business and failed to remit the GST to the government, resulting in losses for both the exchequer and the buyer. Additionally, numerous fake invoice scams have emerged due to fictitious registrations.



It has been reported that the Indore Commissionerate of Central GST has recently identified 62 firms that obtained GST registration using fake documents. These firms were found to be issuing fake invoices and claiming crores of input tax credits. In order to prevent such fraudulent activities, the Commissionerate has issued guidelines that involve using a combination of artificial intelligence and physical inspection of business premises. These measures are aimed at ensuring that only genuine businesses are granted GST registration, and that fraudulent activities are detected and prevented.



Action from Government:

This issue was deliberated at New Delhi on 24.4.2023 and detailed guideline has been issued to The Central Board Indirect Taxes & Customs, GST Policy Wing has issued an instruction vide No. 01/2023-GST dt.4.5.2023 to all the Principal Chief Commissioners / Chief Commissioners / Principal Commissioners /Commissioners of Central Tax All the Principal Directors General/ Directors General of Central Tax ion 4.5.2023.



An all-India drive has been scheduled, and officers have been instructed to submit a report on fake registrations. They have been granted the power to take action, including suspension, cancellation, and blocking of input tax credit, as well as provisional attachment of bank accounts, in case any discrepancies are found during inspections.



The scrutiny process is driven by a combination of analytical tools and human intelligence, as well as physical inspections conducted by officers. However, there is a risk that genuine taxpayers may face difficulties as a result of this process. The GSTIN portal is the primary source of information used for analysis.






For the attention of Taxpayers:

To avoid undue delay in registration, revocation or amendment of core and non core fileds, it is advised that GST practitioners use a guidance checklist to confirm the following are in order, before updating the GSTIN portal, to avoid any hardship:



1. Linking of AADHAR and PAN particulars in the GST portal:

While registering itself it is advisable to give the personal details of applicant as per AADHAR. If registration is cancelled for any reason, an application for revocation can be filed using Form REG-21 only if the personal details of the taxpayer match with those listed in their Aadhaar and PAN records.



2. Renewal of rental agreement

For rental premises, the rental agreement is typically in effect for a period of 11 months, unless otherwise specified. If there are any changes in the name of the landlord or subletting clause, these must be updated in the portal.



3. Updating the Bank account number of regularly used business transaction

Taxpayers may have multiple bank accounts, but it is recommended that they update the details of the active bank account(s) used for regular transactions related to the business. Any inactive or defunct account information can be updated with the details of active bank accounts.



4. Intimating the death of the taxpayer

In the case of a proprietorship, it is crucial to inform the authorities of the taxpayer’s death. The necessary formalities that follow the closure or succession of the business must be carefully adhered to.







5. Updating the change of authorized signatory

Changes in the key committee members or office bearers are common for Associations of Persons (AOP) is an annual affair. In such instances, it is important to update the GSTN portal with the details of the current authorized signatory, so that they can be held responsible for the particulars submitted during the filing process.



6. Updating Legal name / Trade Name

If an individual is running a business, the distinction between the trade name and legal name is often not followed. However, it is recommended to maintain uniformity in disclosing the particulars of the trade name to various authorities, including income tax, professional tax, and others.



7. Place of business is uniform with every authority

Many entities only communicate a change of business address to selective or a few authorities, which can result in multiple addresses being associated with the same business. To avoid this, it is advisable to ensure that all relevant authorities are informed of any change in the business address. This can help to maintain consistency and avoid confusion in the future.



8. Formal surrender of registration in case of closure, dissolution or merger of business.

It is important for taxpayers to surrender their GST certificate after the physical closure of their business. Failure to do so can lead to issues, such as rejection of the application for a new registration on the grounds that there is an existing business at the same premises. Surrendering the GST certificate through formal process after closing the business can help to avoid any confusion or misunderstandings with the authorities. The non-surrender of GST registration of the previous business by the partner can lead to suspicion and scrutiny by the authorities. The GST registration surrender process involves the proper closure of the business and the submission of relevant documents. If a partner leaves the business without following these procedures, it may raise questions about the legitimacy of the previous business and the partner’s new business. Therefore, it is important to follow the proper procedures to avoid any unnecessary suspicion or scrutiny.






9. Updation of records due to change in constitution of business or change of name

In the event of a change in the constitution of a firm, such as converting from an LLP to a private limited company, or a change in the legal name of the entity, it is important to inform the relevant authorities in a timely manner. This can help to ensure that the correct information is reflected in official records and that any necessary updates are made to the GST certificate and other related documents.



10. Updation of records due to change in Management personnel

If there is any change in the organizational structure, such as a change in the Managing Director, Managing Partner or Authorized Signatory, it is important to update the relevant authorities with the corresponding personal details, including email ID and mobile number. This can help to ensure that communication related to GST and other matters is directed to the correct person and that there is no delay in processing requests or addressing any issues that may arise.






The above list is only illustrative, and the Department officials may conduct physical inspection of the business premises to confirm the identity of the taxpayer and the validity of business transactions. This can help to ensure that the registration process is fair and transparent and that fraudulent activities are prevented. However, it is important to ensure that genuine taxpayers are not unduly inconvenienced by these inspections, and that the process is conducted in a timely and efficient manner.