GST 2.0: New Registration Framework to Simplify Process for Small Businesses

Introduction

In a major boost to ease of doing business, the Central Board of Indirect Taxes and Customs (CBIC) will launch a revamped Goods and Services Tax (GST) registration system on November 1, 2025, as part of the government’s wider GST 2.0 reform agenda. The overhaul aims to simplify registration, reduce compliance time, and make the system more data-driven and transparent.

The upcoming framework introduces several major changes designed to make the registration process faster, smarter, and more transparent. Key aspects of the new system include: 

• Auto Approval System for Low-Risk Applicants

• Under the new framework, automated approvals will be granted to low-risk applicants, primarily those with a monthly output tax liability below ₹2.5 lakh. Around 96% of new GST applicants are expected to qualify for this fast-track process, with registrations completed within three working days.
• This move is designed to reduce manual verification delays, allowing entrepreneurs—particularly small and medium enterprises (SMEs) and public sector units (PSUs)—to begin operations more swiftly.
• Data-Driven Risk Assessment

• The reform integrates a risk-based verification mechanism, leveraging data analytics, AI, and interlinked databases to identify high-risk or suspicious applications. Tax authorities will focus manual checks only on cases flagged as potentially fraudulent, enabling more targeted enforcement without disrupting compliant taxpayers.
• Experts say the reform will allow tax authorities to better focus on cases flagged as high-risk through data analytics and intelligence inputs. This is aimed at curbing fraud without burdening compliant taxpayers with extensive scrutiny.
• Key Features Under GST 2.0 Reforms

The registration overhaul forms part of the broader GST 2.0 roadmap, which aims to make the tax ecosystem leaner, more transparent, and technology-driven. The key features include:

• Tax rate structure simplified: Two primary slabs of 5% and 18%, with 40% for luxury and sin goods.
  
• Auto-Approved refund mechanism: Faster processing and real-time tracking of refund claims.
  
• Rationalised return filing: Reduced frequency and simplification of forms for small taxpayers.
  
• Risk-based audits: Data-driven selection of cases for scrutiny.
  
• Improved taxpayer interface: Enhanced GSTN portal with AI-driven assistance and faster document verification.
  

Government’s Vision and Challenges Ahead

Announcing the rollout during the inauguration of the new CGST Bhawan in Ghaziabad, Finance Minister Nirmala Sitharaman emphasized that the reforms are designed to ensure efficient compliance and robust enforcement against evasion. She noted that automation will minimize physical interaction, curbing corruption and procedural bottlenecks.

However, experts caution that the success of the reform hinges on the stability of the GSTN platform and the accuracy of risk categorisation algorithms. Past instances of portal downtime and registration errors have caused frustration among taxpayers, underscoring the need for better system resilience and user support.

Conclusion

The revamped GST registration system marks a significant step toward modernising India’s indirect tax regime. By combining automation, analytics, and risk-based supervision, the reform seeks to strike a balance between ease of compliance and effective enforcement. If implemented smoothly, it could significantly reduce compliance burdens for small taxpayers, enhance transparency, and reinforce trust in India’s GST framework—paving the way for a more efficient and inclusive tax administration under GST 2.0.