CBIC Penalises Officers Asking for Unrequired Documents for GST Registration

In order to make the GST registration process smoother and shorter, the Central Board of Indirect Taxes and Customs (CBIC) has ordered top department officers to ensure that no trouble is created in the process and also asked them to ensure fake GST registrations don’t result in unnecessary rules or requirements for businesses.

Recently, a bunch of instructions have been issued by the authority to overcome the difficulties faced by individuals while registering for Goods and Services Tax. The Central Board of Indirect Taxes and Customs (CBIC) said in a statement on Friday that this is mainly due to officers asking for extra documents.

The CBIC said these instructions will make it easier for taxpayers and improve transparency. The statement issued on Thursday orders officers to strictly follow the list of documents required for doing GST registration. CBIC has also mentioned specific circumstances required for registration in its instructions.

The CBIC said, “Officers have been directed not to issue notices based on presumptive grounds, minor discrepancies, or for additional documents that are not essential for processing applications.” Further, “Officers have also been directed to seek approval of the concerned Deputy/Assistant Commissioner in cases where documents apart from the listed documents are required to be sought.”

The CBIC also instructed its senior officers to closely watch the processing of applications, check physical verifications, and review the types of questions being asked. Officers have been told to issue relevant trade notices when necessary.

The post has sufficient staff who have been asked by officers to tackle the GST registration applications for their timely disposal.

The Central Board of Indirect Taxes and Customs (CBIC) said “While on one hand, there is a need to prevent registration of fraudulent firms created for passing on input tax credit (ITC) without any underlying supply (of goods or service), on the other hand, there is a need to ensure that genuine applicants seeking registration are not unduly harassed.”

The indirect tax system introduced in 2017 relies heavily on technology and has strong transparency and reporting rules at different stages of the supply chain. While the system works well for large companies with the resources to follow the rules, it has been difficult to implement due to the large informal sector in the economy.

GST encourages established businesses to work only with other GST-registered businesses to ensure the input tax credit chain remains intact, but this is challenging because of the large informal sector.