You might have read my earlier article ‘Why GST Department Is Not Right In Asking Commercial Place For GST Registration?‘ published in September’2021. In the earlier article, I wrote that GST Laws does not mandate that “Commercial Address” is mandatory for GST Registrations. Further, I wrote that If we recall registration requirements of VAT Laws, theywere as follows:
Above requirement of VAT Era not exist in GST Laws.
But practically Departmental Officers keep on asking the same. Officer’s sometimes asks for “No Objection Certificate” (hereinafter referred as ‘NOC’) from Landlord. Department ask these in pretext to check “proof” of Legal Possession of Principal Place and/or additional places of Business. This can be established even without ‘NOC’ from the Landlord.
WAIVER OFF MANDATORY REQUIREMENT OF “NOC” FROM LANDLORD IN ERSTWHILE DELHI VAT
A detailed circular on DVAT Registration of New Dealers was issued vide Circular No. F.III/17/CT&T/Estt/07/2574-77 dated 16-April-2007. Point No. 7 of the said Circular required ‘proof of legal possession of Principal Place and/or Additional Place of Business’.
In order to facilitate the registration of dealers running business from rented premises Circular No. 13 of 2012-13; No. F.7(456)/Policy/VAT/2012/484-491 dated 16-August-2012 was issued. Through this Circular it was decided that “it will not be mandatory for dealers to submit “No Objection Certificate” from Landlord if they submit other supporting documents like Rent receipts, Rent Agreement, Water/Electricity Bills etc. in support of Legal Possession of the Premises.”
Honourable Kerala High Court in case of F R Trade Links vs The State Tax Officer, (WP(C) NO. 28917 OF 2020) has held that there are Statutory Provisions in GST Laws and it is impermissible for Officer to seek details beyond statutory permissible.
In case of P.Y. Mustaffa, Kanakonam Traders, Erattupetta V. Additional Sales Tax Officer, Pala & Another [(2002) 10 KTR 192] it was held that registration is merely regulatory in nature and no overbearing importance can be given to it by the Kerala High Court.
WHAT THE TASK FORCE ON GST SAID ABOUT REGISTRATIONS?
On 15-December-2019, Report of the Task Force on Goods & Service Tax was issued. Recommendations about Registrations were under Chapter-IV “Administrative Structure”.
As per Para 4.4 (v) “Since the number is PAN based, it is not necessary to have any pre-registration verification. However, the states may, if necessary, undertake post-registration verification to eliminate any potential abuse.”
EXPECTATIONS FROM GST
There is a saying that good tax policy is good tax administration. During Indirect Tax Regime, an assessee had to follow various complex compliances. Hence, Government felt the need of implementing GST. GST was construed a significant improvement over the Indirect Tax Regime, and it was believed that with GST there would be a significant scope of improvisation in the tax policies which would ultimately help in the tax collection efficiency.
Today when all the Registrations are either Aadhaar based or approved after Physical Verification demanding “NOC” from Landlord is not improvement in comparison to old regime. GST Department need to understand this basic thing and stop demanding “NOC”s. They need to trust the applicant. They should stop rejecting Applications for GST Registration for non-submission of “NOC” as possession of place of business can be established from other documents too. Alternatively, Government could issue some Standard Operation Procedure (SOP) or some clarification in this matter.