CBIC’s Fresh Guidelines to Prevent Harassment of GST Applicants

In its move to curb taxpayers’ harassment, the Central Board of Indirect Taxes and Customs (CBIC) has issued revised instructions for its officers regarding the Goods and Services (GST) Registration process. The decision follows a surge in complaints from applicants over excessive documentation demands and repeated clarifications during registration. 

According to the CBIC, a number of applicants had flagged issues about being asked to provide unnecessary documents, such as multiple proofs for business place, ownership structure, and identity verification for authorised signatories. Now, the Officers have been directed not to raise presumptive queries or ask for minor or any unnecessary documents for clarifications as it often could delay the process and may lead to unwarranted rejection of applications. 

In the recent instruction issued on 17 April, the CBIC stated ,”There is a need to ensure that genuine applicants are not unnecessarily harassed while continuing to prevent the registration of fraudulent firms created for the purpose of availing ineligible input tax credit (ITC).”

It also acknowledged irregularities in how officers across the nation were verifying documents and processing applications submitted in Form GST REG-01. In many cases, even avoidable clarifications led to delays in registration or outright rejections, it noted. 

The new circular will take place of the previous set of guidelines issued on 14 June 2023, aiming to standardise practices across the board. Officers are expected to restrict themselves to only necessary checks and documentation required for registration. 

To streamline feedback and track implementation challenges, the CBIC has also shared a dedicated email ID- gst-cbec@gov.in, where applicants and shareholders can raise concerns regarding the new instructions. 

Tax experts have taken this move positively, saying it strikes a balance between tightening compliance to curb GST fraud and ensuring that legitimate businesses face minimal friction while entering the tax net. 

This directive is seen as part of the government’s bigger effort to uplift the ease of doing business while maintaining a robust system of checks to prevent tax evasion.