GST Registration Gets Faster: 3-Day Auto Approval for Low-Risk & Small B2B Applicants

Simplified GST Registration Scheme 2025: 3-Day Auto Approval for Low-Risk Applicants and Businesses with B2B Output Tax Below ₹2.5 Lakh per Month

Summary: Simplified GST Registration Scheme, effective from 1 November 2025, marks a major reform in India’s GST framework, aimed at expediting approvals and reducing administrative delays. Approved in the 56th GST Council Meeting, the scheme introduces a 3-day auto-approval system for low-risk applicants and businesses with a monthly B2B output tax liability not exceeding ₹2.5 lakh. Operating within the framework of Rules 8 and 9 of the CGST Rules, 2017, the new mechanism automates verification through Aadhaar-based e-KYC and risk analytics, while allowing officers to intervene in flagged cases. Over 95% of new applicants are expected to qualify for the simplified lane, thereby minimizing manual scrutiny and enhancing ease of doing business. The process requires applicants to complete online submission in Form REG-01 with basic documentation and Aadhaar authentication. Those exceeding the ₹2.5 lakh threshold may still obtain auto-approval if identified as low-risk by the system. The CBIC’s Instruction No. 03/2025-GST standardizes acceptable documents and discourages unnecessary demands. While the reform ensures faster registration and reduced compliance burden, applicants must ensure truthful self-declaration, as false information may attract penalties under Section 122 of the CGST Act, 2017.

1. Introduction

In this article, we examine the new GST Registration process introduced pursuant to the 56th Meeting of the GST Council, held in September 2025, wherein the Council approved a transformative reform known as the Simplified GST Registration Scheme. This initiative represents a significant procedural modernization aimed at expediting registration for businesses categorized as low-risk and for applicants having a limited business-to-business (B2B) output tax liability.

Recognizing the persistent challenges faced by taxpayers in obtaining GST registration—particularly delays arising from physical verification, document scrutiny, and officer discretion—the Government has sought to simplify and digitize the process through this scheme. According to official estimates, the reform is expected to facilitate the automatic approval of nearly 96% of all GST registration applications, thereby substantially reducing administrative friction.

Effective from 1 November 2025, the Simplified GST Registration Scheme integrates seamlessly into the existing GST common portal, introducing an automated approval mechanism within three working days for eligible applicants.

This article provides a comprehensive, practitioner-oriented analysis of the new regime, covering its statutory foundation, eligibility criteria, workflow on the GST portal, computation norms for output tax liability, and compliance implications for Chartered Accountants, tax practitioners, and corporate applicants involved in GST registrations.

2. Core Change: What the Scheme Introduces

2.1 Key Highlights

1. Auto-approval within 3 working days is now available in two cases:
   • System-identified low-risk applicants, and
   • Applicants who self-assess that their monthly output tax on B2B supplies (inclusive of CGST, SGST/UTGST, and IGST) does not exceed ₹2.5 lakh.
2. The scheme is voluntary in nature—applicants may choose to opt in or continue under the regular assessment process. As per the latest available information, assessees are not required to take any additional action. The system will automatically identify the relevant risk parameters and grant approval based on its internal evaluation mechanism.
3. The existing legal framework under Rule 8 and Rule 9 of the CGST Rules, 2017 continues to operate. The simplified process overlays but does not replace these rules.
4. The Council estimates that over 95–96% of new applicants will fall within the simplified lane.

2.2 Statutory Context

The scheme functions within the same statutory base:

• Rule 8 – Application for registration, TRN generation, Aadhaar authentication, and biometric protocols.
• Rule 9 – Verification, approval timelines (7 or 30 days), and deemed-approval provisions.

Therefore, while automation is introduced, the jurisdictional officer retains power under Rule 9 to intervene or reject applications that are flagged as risky.

3. Effective Date and Source Citations

4. Application Workflow (Effective 1 November 2025)

Step A – Pre-Application Preparation

Before initiating the online process, ensure:

• PAN, State/UT, email, and mobile are ready to generate the Temporary Reference Number (TRN) under Rule 8.
• Aadhaar-based e-KYC of all promoters and authorised signatories is completed in terms of Section 25(6C)/(6D) read with Rule 8(4A).
  • Where risk parameters trigger verification or Aadhaar is not opted, biometric and original-document verification will be required.
• Document Pack as per CBIC Instruction 03/2025-GST:
  • Acceptable Principal Place of Business (PPOB) proof: Property-tax receipt, municipal record, or electricity/water bill.
  • Lessor’s PAN/photo not to be demanded if ownership proof is already provided.
  • No extra documents beyond Form REG-01’s indicative list.

Tip: Officers are directed to follow this document discipline strictly—deviation can be contested using Instruction 03/2025-GST.

Step B – Online Portal Submission (Form REG-01)

1. Generate TRN → Complete Part B of REG-01 → Upload documents.
2. Choose the lane (or system auto-routes):
   • Simplified Scheme (Opt-in)
     • Declare eligibility under the ≤ ₹2.5 lakh/month B2B output-tax test.
     • Complete Aadhaar e-KYC; if risk-flagged, complete biometric verification.
   • Regular Lane
     • Processed under normal Rule 9 timelines (7 or 30 days).

3. Outcome:
   • Auto-approval in 3 working days for low-risk/self-assessed eligible applicants.
   • Officer may issue REG-03 for clarification; reply via REG-04 within the prescribed period.
   • Failure to respond may result in rejection (REG-05).
   • Deemed approval continues to apply if no action is taken within Rule 9 deadlines.

5. The ₹2.5 Lakh Monthly Output-Tax Test – Computation & Application

5.1 Scope

The ₹2.5 lakh ceiling is applicable only to B2B transactions (supplies made to registered persons).

Excluded:

• B2C transactions (supplies to unregistered persons).
• Any tax liability under Reverse Charge Mechanism (RCM) payable by the recipient.

5.2 Computation Method

B2B Output-Tax (₹ per month) = Sum of (IGST or CGST + SGST/UTGST) on all B2B invoices issued during the month.

If the computed value does not exceed ₹2,50,000, the applicant qualifies for the Simplified Registration Lane.

5.3 Ongoing Compliance

• Maintain a monthly record of B2B turnover and tax liability.
• If the liability exceeds ₹2.5 lakh, voluntarily opt-out of the simplified lane using the portal facility once introduced.
• False declaration or suppression may attract penalty under Section 122 of the CGST Act.

6. Applicants Exceeding ₹2.5 Lakh Output Tax

If your output tax exceeds ₹2.5 lakh/month, the following applies:

1. Auto-approval remains possible only if the system’s analytics classify you as low-risk.
2. If not, the application follows Rule 9 timelines:
   • 7 working days (normal verification), or
   • 30 days (where biometric/physical verification applies).
3. Deemed approval under Rule 9(5) protects applicants where the officer fails to act within statutory limits.
4. Maintain monthly data of supplies and output-tax as evidence of good-faith disclosure.

7. Elements Unchanged by the New Scheme

• Rule 8 and Rule 9 framework continues to operate without alteration.
• Aadhaar authentication and biometric verification remain mandatory for flagged cases.
• CBIC Instruction 03/2025-GST ensures that officers:
  • Adhere to REG-01’s indicative list;
  • Avoid unnecessary document demands;
  • Follow proper verification timelines.
• Non-compliance or misstatement remains punishable under Section 122 of the CGST Act.

8. Practitioner’s Checklist

9. Separate Scheme for Small E-Commerce Sellers

The Council also approved in principle a simplified registration mechanism for small suppliers operating through e-commerce operators (ECOs) who supply across multiple States and face difficulty in maintaining a Principal Place of Business (PPOB) in each State.

• Status: Awaiting separate notification.
• Clarification: This ECO mechanism is distinct from the 3-day auto-approval lane and will have independent modalities once notified.

10. Frequently Asked Practitioner Queries

Q1. If the projected B2B output-tax is ₹3–4 lakh/month, can the applicant still get 3-day approval?
Answer: Possibly, yes—if the system categorizes the applicant as low-risk. Otherwise, the case falls under Rule 9 norms (7 or 30 days).

Q2. If we opted into the simplified lane but later exceed ₹2.5 lakh/month?
Answer: The scheme allows voluntary opt-out. Keep a monthly computation sheet evidencing bona fide self-assessment to avoid penalty exposure.

11. Statutory References & Source Mapping

12. Professional Takeaways

• Conduct a pre-eligibility assessment before advising clients.
• Maintain documented computation of the B2B output-tax estimate used for self-assessment.
• Ensure Aadhaar-based verification for all key persons before filing.
• Advise clients to opt-out proactively if they breach the ₹2.5 lakh ceiling.
• Keep REG-03 and REG-04 responses concise, factual, and supported with approved documents only.
• Integrate an internal SOP aligned with Annexure-V, Rule 8(4A), Rule 9, and Instruction 03/2025-GST.

13. Conclusion

The Simplified GST Registration Scheme signifies a decisive transition toward data-driven governance and automated risk assessment within the GST framework. By integrating data analytics with statutory controls under Rules 8 and 9 of the CGST Rules, 2017, the system aims to deliver speed without compromising accountability.

It is pertinent to note that, as of date, no official notification or public checklist has been issued specifying the exact parameters or indicators used by the GST system to determine the risk profile of applicants. The classification continues to operate through an internal algorithmic evaluation by the GSTN and the CBIC. However, the proper officer retains the authority to scrutinize documents and conduct verification wherever an application is flagged as not low-risk by the automated system.

For practitioners and taxpayers, this reform substantially reduces registration turnaround time and encourages accurate self-declaration, documentation discipline, and procedural transparency. At the same time, it is critical to remember that any false information or misrepresentation during the registration process may attract penal consequences under Section 122 of the CGST Act, 2017, which prescribes penalties for furnishing false information or suppression of facts in connection with registration or return filings.

If you have any doubts, face challenges during the GST registration process, or require professional guidance regarding the new Simplified GST Registration Scheme, please feel free to contact:

CA Varun Gupta | Phone: +91-9818640458 | Email: varunmukeshgupta96@gmail.com