NEW GUIDELINES FOR PROCESSING OF APPLICATIONS FOR GST REGISTRATION

[Dr. Sanjiv Agarwal]

CBIC has issued Instruction No. 3/2023-GST dated 14.06.2023 to check fake registrations to provide guidelines to check menace of fake registrations and issuance of bogus invoices for passing of fake ITC. For this purpose, verification of registration application is very crucial. These guidelines are in addition to Instruction No. 1/2023-GST dated 04.05.2023:

• Immediately on receipt of the application for the registration in the Task List of the concerned officer on ACES-GST application, the officer shall initiate the process of scrutiny and verification of the details filled by the applicant and the documents uploaded by the applicant.
• FORM GST REG-01 prescribes a list of documents to be uploaded by the applicant in respect of photograph, constitution of business, principal place of business, bank account, etc. The proper officer shall carefully scrutinize the said documents to ensure that the documents are legible, complete and relevant.
• The details of the address of principal and additional places of business and the corresponding documents uploaded with the application as proof of address may be closely scrutinised to verify completeness and correctness of address of such places of business.
• To the extent possible, the authenticity of the documents furnished as proof of address will be cross-verified from the publicly available sources, such as websites of the concerned authorities such as land registry, electricity distribution companies, municipalities, and local bodies, etc.
• Proper officer shall check the risk rating made available by the DGARM in respect of the concerned ARN and take the same into consideration while verifying and processing the said application.
• The proper officer may check as to whether the registration(s) has been obtained on the same PAN earlier, either within the same State or other State(s).
• The proper officer may also give due consideration and special attention to the cases involving inter alia the following circumstances:

1. where any registration obtained on the PAN of the applicant has been cancelled previously;
2. where any registration obtained on the PAN of the applicant is suspended at the time of verification of a new application of registration;
3. whether any application for registration on the PAN of the applicant has been rejected previously;
4. whether the place of business of the applicant appears to be risky based on local risk parameters;
5. whether the proof of address of place(s) of business prima facie appear to be suspicious/ doubtful on the basis of scrutiny of the application and the documents.

• Where the application is found to be deficient, he shall issue a notice to the applicant electronically in FORM GST REG-03 within the prescribed time limit.
• The proper officer may seek clarification or information or document(s) inter alia in the following cases:

1. where any document is incomplete or not legible, the proper officer may seek complete or legible copy of the same.
2. where the address of place of business does not match with the document uploaded by the applicant, or where such uploaded document does not appear to be a valid proof of the address of the said place of business, the proper officer may seek additional documents to confirm the address details.
3. where the address of place of business is incomplete or vague, the proper officer may seek complete and unambiguous details of the address along with the corresponding documentary proof.
4. where any GSTIN linked to the PAN of the applicant is found cancelled or suspended, the proper officer may seek clarification or reasons for the same from the applicant, if required.

• The proper officer shall carefully examine the clarification, information or documents furnished by the applicant in FORM GST REG-04 in response to the notice issued in FORM GST REG-03.
• Where the proper officer is not satisfied with the clarification, information or documents furnished, he may, for reasons to be recorded in writing, reject such application and inform the applicant electronically in FORM GST REG-05 within the prescribed time period
• Where no reply is furnished by the applicant in response to the notice issued under in FORM GST REG-03, within the prescribed time period, the proper officer may, for reasons to be recorded in writing, reject such application and inform the applicant electronically in FORM GST REG-05.
• The proper officer must ensure that the said notice in FORM GST REG-03, wherever required, is issued electronically within a period of seven working days from the date of submission of the application in cases where the applicant has undergone authentication of Aadhaar number and within a period of thirty days in cases specified in proviso to sub-rule (1) of rule 9 of CGST Rules, 2017.
• Where the applicant has either failed to undergo authentication of Aadhaar number or has not opted for authentication of Aadhaar number, the proper officer shall immediately initiate the process for physical verification of the place of business.
• It will be ensured by the proper officer that the application is either rejected or accepted or relevant query is raised within the prescribed time limit and no application for grant of registration is approved on deemed basis for want of timely action on the part of tax officers. Strict view may be taken where any gross negligence is observed on part of the concerned officer(s).
• The concerned Commissionerate may get such physical verification of the place of business got conducted in other cases also, where ever required, based inter alia on various risk parameters and risk ratings as per tools available in ADVAIT/ BIFA or as per reports provided by DGARM, so as to verify authenticity of such registrations.