CBIC Introduces Timelines and Deemed Approval for GST Registration in New Procedural Reforms

The Central Board of Indirect Taxes and Customs (CBIC) has issued eight circulars introducing procedural reforms in Goods and Services Tax (GST) registration and tax proceedings. These changes are part of the implementation of major process and procedural reforms recommended during the 57th GST Council meeting.

One of the key circulars sets out revised registration guidelines for applicants. Currently, registration is granted within three working days without officer involvement for applicants assessed as low risk and those whose output tax on supplies to registered persons does not exceed ₹2.5 lakh a month. Approximately 61 per cent of registrations currently go through this automated route, while the remaining 39 per cent require officer intervention.

For applications selected for biometric-based Aadhaar authentication out of the remaining 39 per cent, the applicant has 15 days to complete the process. If an officer requires clarification, the applicant has seven days to respond. Once addressed, the officer must process the application and decide to accept or reject it within seven days.

The circular specifies that if no action is taken by the officer within the prescribed time limit, the GST registration shall be deemed to have been approved. A senior government official noted that in cases where Aadhaar is authenticated and the registration is not identified for physical verification, registration is to be granted or a query raised within seven days.

Industry experts have noted that the new guidance addresses practical issues that previously resulted in ground-level queries and disputes. Saurabh Agarwal, Tax Partner at EY India, stated that the detailed guidance covers scenarios including co-working spaces, consent-based premises, ATMs, telecom towers, and state-specific information requirements. Coupled with defined documentation requirements, this is intended to reduce differing interpretations and make the registration process more predictable for taxpayers.

Another circular addresses issues related to demand, adjudication, and appeal proceedings. Manoj Mishra, Partner at Grant Thornton Bharat, observed that the update tackles recurring fault lines in GST litigation where taxpayers often had to challenge procedural defects before contesting underlying tax demands. By emphasizing evidence-backed notices, year-wise delineation of demands in multi-year show cause notices (SCNs), and separate grounds for fraudulent and non-fraudulent demands under Sections 73 and 74, the circular aims to bring discipline to the adjudication process.

Meetika Baghel, Partner at Aurtus Legal, added that the circular reinforces that allegations of fraud, wilful misstatement, or suppression are exceptional and must rest on specific facts, material evidence, and a demonstrable intent to evade tax, rather than a mere omission or incorrect statement. Furthermore, the direction to use neutral and tentative expressions such as 'it appears that' in SCNs recognizes that a notice is an invitation to respond rather than a pre-judged verdict.

Additionally, the CBIC prescribed measures to unblock input tax credit (ITC) for demo vehicles and established mechanisms to govern the initiation and adjudication of GST proceedings.

"The introduction of clear timelines and a deemed-approval clause by the CBIC is a welcome step toward reducing compliance friction for businesses and startups. Delays in obtaining GST registrations often stall initial operations for new enterprises. Establishing predictable turnaround times, alongside clearer guidelines for adjudication and documentation, will bring much-needed transparency and reduce unnecessary litigation for genuine taxpayers operating in the Indian market." — Dr. Shishir Gupta, Founder & CEO, StartupLanes