Key Highlights of the New CBIC Instructions

CBIC Tightens GST Registration Process to Prevent Harassment and Ensure Fairness

In a major move aimed at improving the ease of doing business and ensuring taxpayer-friendly administration, the Central Board of Indirect Taxes and Customs (CBIC) has issued revised instructions for GST registration processing, replacing the previous guidelines issued on June 14, 2023. The new rules are intended to stop undue harassment of genuine applicants by tax officers, while still keeping checks in place to detect and prevent fraudulent registrations.

The new guidelines, released on April 17, 2025, respond to a growing number of complaints from applicants about excessive document demands and intrusive queries during the Goods and Services Tax (GST) registration process.

Revised Guidelines Aim to Prevent Unwarranted Queries

CBIC acknowledged that varied practices were being followed by officers across the country when processing Form GST REG-01 applications. This has resulted in delays and, in some cases, unjustified rejections of genuine applications. The most common complaint was the demand for unnecessary documents or presumptive clarifications not related to the information already submitted.

Examples of such issues include:

• Rejection because the applicant’s residential address differs from the registration location
• Queries about HSN codes that are banned in certain states
• Concerns that a particular business activity cannot be conducted from a specified address

CBIC has made it clear that “officers handling registration applications should not ask any presumptive query which is not related to the documents or information submitted by the applicant.” Notices should not be issued for minor discrepancies or speculative assumptions, the Board emphasized.

Replacing 2023 Norms: A Move Toward Greater Uniformity

The updated instructions fully replace the June 2023 guidelines, aiming to standardize document verification across jurisdictions and remove subjectivity from the process. By doing so, CBIC intends to create a uniform and predictable environment for businesses applying for GST registration.

Taxpayers and applicants who face challenges during registration can now report their grievances directly to CBIC via a dedicated email: [email protected].

Balancing Fraud Detection with Ease of Doing Business

While focusing on reducing harassment, CBIC also recognized the importance of ensuring that fraudulent firms do not misuse the GST regime by availing Input Tax Credit (ITC) without genuine supply of goods or services. Thus, the revised norms seek to strike a balance between stringent checks against fake firms and a smooth process for legitimate businesses.

The CBIC’s GST Policy Wing stated, “There is a need to prevent registration of fraudulent firms created for passing on ITC without any underlying supply. At the same time, genuine applicants seeking registration must not be unduly harassed.”

Key Highlights of the New CBIC Instructions

Here are some major takeaways from the April 2025 circular:

• Avoid Presumptive Queries: Officers should not raise speculative questions not backed by facts or documents.
• No Minor Discrepancy-Based Rejections: Applications cannot be rejected for trivial errors or address mismatches.
• Clarity on Required Documents: CBIC has listed specific documents that are essential and must be accepted across the board.
• Standardized Process: Ensures consistency in verification methods by officers across states and regions.
• Direct Feedback Channel: Applicants can escalate issues by writing to [email protected] in case of harassment or delays.

Industry Reaction and the Way Forward

The revised norms have been welcomed by tax consultants and business associations, who had long complained about inconsistencies in the registration process. Many hope that this move will streamline onboarding for startups, small businesses, and genuine traders.

Experts believe that the instructions, if implemented effectively, could boost taxpayer confidence, reduce the compliance burden, and improve India’s overall business climate.

However, the success of these reforms will ultimately depend on how well they are adopted at the ground level by field officers. Timely training and accountability measures will be critical in ensuring that officers comply with the updated approach.