The movement of CBIC comes after MSMes has raised concerns about excessive and inconsistent control in the registration process during consultations for the participating parties with the Ministry of MSME and CBIC, people said.
After the meeting, CBIC asked its registration officials to reduce physical verification and complete the process in seven days if the company is not found risky during a joint analysis.
Also read: Should you register for GST? Here’s all you need to know.
“After consultation, CBIC issued its officials instructed to facilitate the registration process for companies. MSME will probably be the recipients of these instructions,” one of the above said.
One -year -old businesses £40 Lakh for the goods and £20 LAKH for services is required to register for GST and obtain the GST (GSTIN) identification number.
No standard procedure
According to the CBIC command of 17 April, which the Mint reviewed, businesses stated that GST officers were looking for additional documents along with the GST Reg-01 form, the first step in registration for GST. These documents were not part of the list of documents to be connected to the form, they said.
“It should be noted that various practices are followed by officers in connection with the verification of documents and the details given in the GST REG-01 form. It was also observed that the application should be clarified to clarify officers, leading to registration and rejection,” Cbic said.
This clarification concerned things, such as evidence of the main place of business, the Constitution of Entrepreneurship and the identity of the authorized signator, said the order.
“On the one hand, the registration of fraudulent companies created to hand over the entry tax (ITC) without any background offer must be prevented, on the other hand, it is necessary to ensure that real registration applicants are not disproportionately harassed,” read the order.
“Find minimum documents”
Now the officers have been told to seek the minimum number of documents needed for GST registration. For example, a demonstration that an entrepreneur is starting to do business on real estate, GST officers will only find GST officers, only the latest real estate income, a municipal copy of Khata or a copy of the Electricity Act, and each of them is sufficient for evidence, the order said.
For businesses that operated from rented premises, a sufficient copy of a rental or lease agreement together with a copy of the acceptance of real estate tax, city copy or copy of the Electricity Act, he added.
In cases where the GST officer sought to clarify the applicant’s valid clarification, the applicant has seven days to answer and the GST officer must accept or reject the application within seven days of receipt, the order said.
Chamfered GST posts
According to data published by the government seven years after GST, the contribution of different types of enterprises to GST income is very distorted.
Since June 2024, publicly mentioned companies that made up about 0.5% of taxpayers have contributed slightly more than 34% of GST income, while ownership, which accounted for about 80% of taxpayers, contributed only 13.3% and partnership, which included 10% of tax workers.
India 6.4 Crore MSME are mostly property or partnership.
Also read: Revision of tax rates on the GST Council agenda; India is pushing FATF on the gray list of Pakistan
Simplifying GST registration is likely to facilitate this process for such companies and increase their contribution to GST income, said Vinod Kumar, President of the Indian SME forum, the industrial association. “However, the implementation must be comprehensively followed across states. There are problems that MSME is facing when selling their goods and services between states,” he said.
“While the CBIC has taken a progressive step by this circulation, its full effectiveness of implementation would be strengthened by additional GSTR circulars. Synchronized approach across central and state jurisdictions would help achieve the intended goal of the effective registration process.
Obstacles for small businesses
In March, Mint reported that when registering for GST as a freelance owner, she seems to be simple on paper, in fact it is much more complicated. This is because GST officers often apply for additional allied registrations, such as shops and establishment licenses, MSME certificates and not-to-date certificates, including, even if it is not legally ordered.
As a result, the process is complex for exclusive owners, such as independent workers or those who operate a platform without electronic trading, because they may not or qualify for some of these certificates or licenses.
Also, standard surgical procedures concerning GST registration are not well defined, followed by Earth procedures differ from jurisdiction to jurisdiction, raging Mahtani, partner, Dhruva Advisors at that time Mint. “As a result, the requirements for documentation differ depending on the GST officer, who solves the case.” This means that applicants will know what other paperwork is needed as soon as the officer provokes an investigation, causing an unexpected delay.
“These practical challenges often lead to confusion, delay and other stress on compliance,” said Vijaykumar Puri Mint, VPRP & Co LLP, Chartered Accountants.
Read also: Why “Record” Gst Hrubby Collection In April Don’t Say the whole story
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