If you are stuck in such a situation, here is what to do.

Mr. Anand Sharma, a budding entrepreneur from the city of Jaynagar, decided to turn his passion for traditional crafts into a business. He started “Sharma Handicrafts,” a sole proprietorship, operating from a small workshop. As his business began to grow and approach the mandatory turnover threshold, he knew he had to register for the Goods and Services Tax (GST). Confident in his ability to handle administrative tasks, Mr. Sharma attempted the online GST registration process himself. He carefully filled out the forms and uploaded what he believed were all the necessary documents.

A week later, he received an email from the GST department. It wasn’t an approval but a “Notice Seeking Clarification.” The notice pointed out discrepancies, stating that the address on his electricity bill did not exactly match the address mentioned in his rental agreement. Feeling overwhelmed by the formal language and the potential for rejection, Mr. Sharma realised he was out of his depth. He was concerned about delaying his business operations and worried about the costs of hiring a professional, especially since his venture was still in its early stages. This situation is common for many new business owners who find the procedural requirements of GST registration to be complex.

Advice in such cases

Facing a notice or rejection during GST registration can be stressful, but it’s a manageable issue with the right approach.

• Read the Notice Carefully: Understand the specific reasons for the clarification or rejection. The notice will detail the discrepancies or missing information.
• Gather Correct Documents: Collect all the required documents in the correct format. Ensure that details like name, address, and PAN are consistent across all documents.
• Respond Promptly: The GST portal provides a specific timeframe, usually 7 working days, to respond to a notice. Do not miss this deadline, as it can lead to automatic rejection.
• Consult with Lawyer: The very basic and important step to start is talk to Lawyer / advocate. You should not hesitate in paying his consultation fee i.e. might be in range of Rs. 10,000 to 50,000 depends case to case. He is helping you in this situation of come out. He is expert in the domain and can help you explain the procedure which you might have never explored. A good lawyer can get the issues resolved much faster than you think.

Applicable Sections of Law

The GST registration process is governed by the Central Goods and Services Tax (CGST) Act, 2017, and the associated rules. Key provisions include:

• Section 22 of the CGST Act, 2017: This section specifies the persons who are liable for registration under GST based on their aggregate turnover.
• Section 25 of the CGST Act, 2017: This outlines the detailed procedure for registration. It mandates that any person liable for registration must apply within thirty days from the date on which they become liable.
• Rule 9 of the CGST Rules, 2017: This rule deals with the verification of the application and its approval. It empowers the proper officer to seek clarification if the application is found to be deficient.
• Rule 10 of the CGST Rules, 2017: This rule pertains to the issuance of the registration certificate upon successful verification.

If you are the complainant

If you are the applicant who has received a notice seeking clarification, you are essentially the ‘complainant’ in this procedural matter. Here’s what you should do:

• Draft a Clear Reply: Prepare a point-by-point response to the queries raised in the notice. Explain any discrepancies clearly and concisely.
• Submit Supporting Evidence: Attach clear, scanned copies of the corrected or additional documents requested by the officer. For example, if there’s an address mismatch, provide a notarized affidavit or a clarification letter along with supporting proofs.
• File the Clarification Online: Your response must be submitted through the official GST portal within the stipulated time.
• Consult with Lawyer: An advocate can help you draft a legally sound reply that addresses all the officer’s concerns effectively, minimizing the chances of rejection.

If you are the victim

If your application is rejected even after you have submitted the clarification, you are a “victim” of a procedural outcome. You have the right to appeal the decision.

• File an Appeal: You can file an appeal against the rejection order to the GST Appellate Authority under Section 107 of the CGST Act, 2017. This must typically be done within three months from the date of the order.
• State Your Grounds: Your appeal should clearly state the grounds on which you are challenging the rejection order. You must demonstrate how the officer’s decision was incorrect.
• Consult with Lawyer: Filing an appeal is a formal legal process. It is highly advisable to engage a lawyer who specializes in tax law to represent your case before the Appellate Authority to ensure the best possible outcome.

How the police behave in such cases

Police authorities have no role or jurisdiction in matters concerning GST registration. This is a civil and administrative matter handled exclusively by the officers of the GST department. Any disputes or grievances are addressed through the internal mechanisms of the department, such as seeking clarification, or through legal channels like the GST Appellate Tribunal, High Court, and the Supreme Court. The police do not get involved unless there is an element of a criminal offence like forgery of documents submitted to the department, which would be a separate criminal investigation.

FAQs people normally have

Here are some common questions business owners have about GST registration:

• What are the common reasons for receiving a clarification notice?
• Common reasons include: mismatch in the name or address across documents (PAN, Aadhaar, bank details, proof of address), unclear or illegible scanned documents, incorrect jurisdiction selection, and invalid proof of business premises.
• Can I re-apply for GST if my first application is rejected?
• Yes, you can submit a fresh application. However, it is crucial to first understand and rectify the reasons for the previous rejection to avoid a repeat of the issue.
• What is the time limit to respond to a GST notice?
• Typically, you are given 7 working days from the date of the notice to submit your clarification online. It is essential to adhere to this deadline.

What evidence is required?

For a smooth registration process and to effectively respond to a notice, you need to have the correct documents ready. The primary evidence includes:

• PAN Card of the business or proprietor.
• Aadhaar Card for e-KYC and verification.
• Photograph of the proprietor/partners.
• Proof of business address: This can be a recent electricity bill, property tax receipt, municipal khata copy, or a valid rental agreement with a No Objection Certificate (NOC) from the property owner.
• Bank account details: A scanned copy of a cancelled cheque or a bank statement showing the name of the proprietor or business.

How long will the investigation take?

The term “investigation” here refers to the verification process by the GST officer. According to the CGST Rules, the timeline is defined:

• The officer must review your application within 3-7 working days.
• If a notice is issued, you have 7 working days to reply.
• After you submit your clarification, the officer has another 7 working days to either approve or reject the application.

While these are the standard timelines, delays can sometimes occur due to the officer’s workload or the complexity of the issues involved in your application.

Advocate Sudhir Rao, Supreme Court of India