KSCAA Representation on Streamlining GST Registration Process

Karnataka State Chartered Accountants Association (KSCAA) has presented a detailed representation to the CBIC Chairman, highlighting challenges faced in the GST registration process and proposing solutions to enhance efficiency and user-friendliness. Key issues include inconsistent documentation requirements between central and state authorities, logistical hurdles in biometric verification, inaccuracies in geocoding addresses, and lack of transparency in centrally allocated registrations. KSCAA suggests implementing uniform Standard Operating Procedures (SOPs), enabling biometric verification at local GST Seva Kendras, and integrating reliable mapping tools. They advocate for technology-driven solutions like online verification, SMS alerts for spot visits, and fast-tracking registration approvals within a stipulated time frame. KSCAA emphasizes the need for a case-by-case evaluation of applications, especially for home-based businesses, and urges clarity on landlord-tenant registration conflicts. Additionally, they recommend establishing redressal mechanisms for frivolous rejections and enhancing portal transparency to provide real-time updates and officer details. These measures aim to simplify the GST registration process, reduce delays, and support genuine taxpayers in compliance efforts.

Karnataka State Chartered Accountants Association (R) 

To,

Shri Sanjay Kumar Agarwal
Chairman, Central Board of Indirect Taxes & Customs,
Government of Karnataka

Date: 14^th February 2025

Ref No: 009/2024-25

SUBJECT: REPRESENTATION ON STREAMLINING THE PROCESS OF GST REGISTRATION

The Karnataka State Chartered Accountants Association (R) (in short ‘KSCAA’), established in 1957, is a premier association representing the Chartered Accountancy profession in Karnataka with prime focus on upholding professional ethics and advancing the interests of the business community. KSCAA has consistently contributed to the community through seminars, workshops, representations, and consultations on policy matters impacting trade, commerce, and industry.

We take this opportunity to bring to your kind attention several genuine difficulties being faced by taxpayers and professionals with respect to registration under the Goods and Services Tax (GST) Act. We believe these challenges warrant urgent intervention and clarification by the authorities to ensure the smooth functioning of the GST regime and to uphold its objectives of simplicity, equity, and efficiency.

KEY ISSUES AND SUGGESTED CLARIFICATIONS

1. COMMON WRITTEN PROCEDURE/ DOCUMENTATION TO BE ADOPTED BOTH BY CENTRAL AND STATE AUTHORITIES

• Issue:

A recurring grievance voiced by both businesses and professionals concerning GST registration is the lack of clarity regarding the procedures and documentation required to

Karnataka State Chartered Accountants Association (R)

obtain GST registration. This confusion primarily arises from inconsistent documentation practices followed by the Central and State Authorities, the inconsistent documentation requirements imposed by Central and State authorities, and, at times, even within different jurisdictions of the same authority. While stringent checks against fraudulent registrations are necessary, it is equally critical to ensure simple, uniform, and smooth process for genuine taxpayers. It is of utmost importance that genuine businesses do not face undue hardship or consider obtaining GST registration a challenge. GST registration is the primary step for starting a business, lack of clarity defeats the initiative of CBIC of assisting in ‘ease of doing business’.

• Our Suggestions:

a. To enhance efficiency, we recommend the establishment of a Standard Operating Procedure for GST registration / along with FAQs / short videos, applicable uniformly to both Central and State authorities be made available. These SOPs/FAQs / short videos should specify the documentation required based on the applicant’s type of organization, ensuring a seamless registration process. Also, a dedicated webpage be created on the portal in this regard which can be updated on a regular basis.

b. It is suggested that templates of lease agreement / NOC /necessary documents other than the utility bills or any other document be made available with clear directions for updating of the same.

c. Further, the Applicant should be provided an opportunity to submit additional documents on the portal to substantiate the claim of address proof. For this the portal bandwidth must be enhanced to accept multiple documents with higher size.

2. BIOMETRIC VERIFICATION

• Issue:

The gradual implementation of biometric verification across the country has introduced significant logistical challenges, particularly for businesses operating in multiple states.

Applicants are often required to travel to the state where the registration is sought, leading to additional costs and considerable inconvenience. For instance, an applicant from one state seeking GST registration in Karnataka must travel to Karnataka for the verification process.

Furthermore, once an application is submitted, it is not possible to modify the details of the authorized signatory if they become unavailable for biometric verification. In such cases, the only option is to submit a fresh application, resulting in delays and added expenses for the business. However, a new application can only be filed after the original application is rejected by the officer, as biometric verification must be completed within the specified time frames set by the department.

• Our Suggestions:

The following are suggestions provided:

a. Allow applicants to complete biometric verification at the GST Seva Kendra in their home state or district.

b. Introduce an alternate online mode for verification, especially for non-resident directors.

c. Allow amendments to the authorized signatory details on the GST portal after the application is submitted, in cases where the authorized signatory is unable to complete the biometric verification, to eliminate the need for filing new applications.

3. Geocoding of the address

Issue:

Applicants are facing difficulties while geocoding the principal place of business, particularly when trying to match the address with government records and the MAPPLS (MapmyIndia) website. This issue is especially prevalent when the PIN code in the government records differs from the one shown on MAPPLS. In such cases, applicants are compelled to select the PIN code displayed on the portal, which does not align with the government records. This mismatch often leads to the rejection of the application, creating a deadlock. Even if the application is rejected, the same address continues to be mapped incorrectly when uploaded again, causing further complications and multiple rejections.

Furthermore, in rural areas, the discrepancy between the address recorded in official records and the postal address is even more challenging. This makes it significantly harder to map the address accurately on MAPPLS, as rural locations often have non-standard or varying address formats. This further complicates the geocoding process, increasing the likelihood of mismatches and subsequent rejections of applications.

Our Suggestion:

The following are suggestions provided:

• GST authorities should instruct the service provider, MAPPLS (MapmyIndia), to align their data with government records or Google Maps to ensure a smooth and accurate submission process for the GST REG-01 application to ensure seamless filling of GST REG 01 application for registration.
• Introduce a redressal mechanism by providing an opportunity to be heard either online or in person for resolving such issues.

4. Spot Visit:

Issue:

Officers conducting spot visits often arrive without prior notice, typically on the final day to process applications. In many cases, the documents requested by these officers are either irrational and/ or already uploaded on the portal. Additionally, business owners are sometimes asked to have their photos taken at the business premises during the spot visit.

Other challenges include:

– Phone calls from the GST office regarding physical verification of premises are often missed by applicants, who assume the calls are spam or from unknown numbers. This causes delays in coordinating the timing for the physical verification.

– Spot visits are conducted at inconvenient hours, such as when the premises are closed or when business owners are away from their office/shop, making it difficult to complete the verification process in a timely manner.

Our Suggestions:

• Implement a system on the GST portal to communicate the name and number of the officer responsible for verification of documents and /or premises as this will facilitate the Applicants to connect with the GST officer to schedule spot visits at a mutually convenient time.
• Notify applicants via SMS alerts about scheduled visits to ensure better coordination.

5. Registration not granted on frivolous grounds:

Issue:

GST registration is a fundamental requirement for conducting business, and it is the fiduciary duty of the authorities to foster an environment where trade, business, or profession can grow and thrive without unnecessary hindrances. However, members frequently raise concerns that their applications are either rejected or notices are issued on the final day. The reasons communicated are frivolous and/ or are requests for documentation/ detail that is already submitted (E.g., Notarisation of NOC letter issued by the landlord to the tenant to carry on commercial business at the premises / non availability of email address and phone number of witness in rental agreement). These requests can create the impression that they are being made to delay the approval of the registration. Such delays result in unnecessary financial burdens for businesses, as they incur rental costs without being able to start operations. Additionally, the government faces a significant loss in revenue due to the postponed commencement of business activities.

Our Suggestions:

The following are suggestions provided:

• Provide an indicative checklist of documents required to be attached as address and identification proofs.
• Leverage technology to streamline the registration process and fast-track approvals.
• Grant registration based on documents within 3-7 days, followed by physical verification of taxpayers to minimize delays.
• Establish a redressal mechanism to allow taxpayers to appeal and resolve issues related to unjust or frivolous rejections

6. Registration not Granted on Residential Premises:

Issue:

It has been observed that officers often reject GST registration applications for businesses operating from residential premises. It is important to note that many freelancers and small businesses run from home, and rejecting applications solely on the basis of the address being residential creates a barrier for these potential taxpayers.

Additionally, applications are frequently rejected due to the absence of documents such as an “NOC from the secretary of the residential society” or “permission from the local

municipal corporation” to conduct commercial activities from a residential premise.

Such demands by GST officers violate Article 19(1)(g) of the Constitution, which grants all citizens the right to practice any profession, or carry on any occupation, trade, or business. While we understand that in some cases applicants may need to obtain additional licenses like a Shop & Establishment or Professional Tax registration from the local authorities, these reasons for rejection fall outside the purview of the GST officers.

Our Suggestions:

Our suggestions are provided below:

• Evaluate applications on a case-by-case basis, considering the nature of the business especially for small businesses.
• Ensure that rejections are not made solely based on the business operating from a residential address or the absence of an NOC.

7. GST Registration for landlords of commercial premises

Issue:

When a taxpayer seeks GST registration for “renting of commercial premises,” it has been observed that the department often requires the application to be filed from the commercial premises being leased out. However, the landlord is generally not available at the commercial premises and may prefer to register at their home or a separate office maintained for business purposes. Requiring registration at the commercial premises can create challenges in communication and the timely issuance of notices, if necessary.

Additionally, there are instances where the GST registration application of the tenant is rejected simply because the landlord has already been granted registration for that premises. This creates an unnecessary obstacle for both parties involved.

Our Suggestions:

The following are our suggestion:

• Allow landlords to register at their home/ office and allow each such commercial premises to be registered as additional place
• Provide clarity and resolve conflicts arising from landlord-tenant registration overlaps.

8. Transparency in the case of GST registration allocated to center

Issue:

For GST registrations allocated to the Central authorities, taxpayers often face difficulties tracking the progress. Jurisdictional officers are generally unaware of the application’s status, leaving taxpayers in limbo. Also, there is no provision under law to withdraw the application and re-submit the same in case of no-action / inaction by the relevant GST authority. The only recourse to the Applicant is to wait for the dispersal of the application by the GST officer.

Our Suggestions:

Our suggestions are provided below:

• Assign a dedicated point of contact for centrally processed registrations to address taxpayer queries.
• Enhance the GST portal to provide for the name, address, phone number of the jurisdiction officer along with real-time status updates for such applications.

9. Approval of amendments:

Issue:

Approval of amendments in GST registration are not provided on timely basis especially with respect to additional place of business. The document sought by each officer is different from the other.

Our Suggestions:

• Use technology to streamline the registration process and fast-track approvals.
  • Grant registration based on documents within 3-7 days, followed by physical verification of taxpayers to minimize delays.

Conclusion

These issues are causing genuine hardship for the business community and are contrary to the intent of the GST regime, which aims to provide a seamless and taxpayer-friendly environment. We understand that checks and balances in availing registration under the GST Acts are important tools to weed out fake entities. However, it is equally necessary that these very checks and balances should not lead to unnecessary hassles for genuine taxpayers.

Considering the difficulties encountered, we, the members of the Karnataka State Chartered Accountants Association, respectfully urge you to consider our request on behalf of the entire Chartered Accountants community and the trade and industry in Karnataka. We remain available for any further discussions or consultations on these matters and are committed to supporting the authorities in streamlining the GST framework.

Thanking you,

Yours sincerely,

For Karnataka State Chartered Accountants Association ®

CC:

1. Shri Pankaj Chaudhary, Union Minister of State, Finance

2. Shri Pramod Kumar Agarwal, Principal Chief Commissioner of Central Taxes, Karnataka, Government of India

3. Shri Vipul Bansal, Commissioner of Commercial Taxes, Government of Karnataka