CBIC GST Circulars 257-264 (26 Oct 2026): Gist of All Eight

On 26 October 2026, the GST Policy Wing of the CBIC issued eight clarificatory circulars, numbered 257 to 264 of 2026. They cover refunds, input tax credit, input service distribution, pre-deposit for appeals, adjudication and appellate procedure, and GST registration. This note gives the gist of each circular, with its key conclusions. It does not replace the circulars, which should be read in full before any action is taken on a particular issue.

1. Retrospective effect of the omission of rule 96(10) (Circular 264/10/2026)

Rule 96(10) of the CGST Rules denied IGST refund on exports where the inputs had been procured under specified concessional or exemption notifications. It was introduced with effect from 23 October 2017 to prevent double benefit. In the 54th GST Council meeting of 9 September 2024, the difficulty faced by exporters was recognised, and the rule was omitted prospectively with effect from 8 October 2024 by the CGST (Second Amendment) Rules, 2024 (Notification No. 20/2024-Central Tax, dated 8 October 2024).

The question was whether the omission applied retrospectively from 23 October 2017. The Supreme Court, in M/s Goodluck India Limited & Anr. v. Union of India & Ors. (SLP (Civil) No. 24550 of 2025, order dated 6 August 2026), held that in the absence of any saving or sunset clause, the omission applies to all proceedings pending on the date of omission. Relying on Kolhapur Canesugar Works Ltd. v. Union of India [(2000) 2 SCC 536], the Court reiterated that section 6 of the General Clauses Act, 1897 does not apply to the omission of a rule, so pending proceedings continue only where there is an express saving or a legal device preserving them.

Following that judgment, the Board has clarified that the omission of rule 96(10) is effective retrospectively from 23 October 2017. Field formations are to deal with pending rule 96(10) proceedings accordingly. The same treatment applies, mutatis mutandis, to the omission of rules 89(4A) and 89(4B). Taxpayers with pending refund disputes or demands on these grounds should expect the retrospective position to be applied.

2. Receipt of export payments, set-off and realisation (Circular 263/09/2026)

The circular deals with three areas.

Export of services: payment channels. Section 2(6)(iv) of the IGST Act requires that payment for export of services be received in convertible foreign exchange or in a manner permitted for repatriation. The Board has clarified that the following qualify. Payment in convertible foreign exchange qualifies. Payment in INR from Special Rupee Vostro Accounts of correspondent banks, opened by AD banks, qualifies, as clarified earlier in Circular 202/14/2023-GST dated 27 October 2023. Payment in INR through INR Nostro (Rupee Vostro) accounts of correspondent banks qualifies. Payment in repatriable INR accounts such as SNRR, SRVA or other similar accounts qualifies. Under FEMA 14R/2023, payment in INR is valid for export to countries other than Nepal, Bhutan and ACU members. Stock brokers who are paid by FPIs, NRIs and OCIs through SNRR or NRE accounts also satisfy the condition. Payment through NRO accounts satisfies it only if routed through SNRR or NRE accounts, consistent with RBI guidelines.

Set-off. Set-off is a valid mode of settlement under FEMA. Where export receivables are set off against import payables in accordance with RBI directions, the condition of section 2(6)(iv) is treated as fulfilled. The circular notes that under the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026, effective from 1 October 2026, the earlier goods-against-goods and services-against-services conditions do not apply to such transactions.

Reinsurance brokers. Where a reinsurance broker's commission is settled by net retention out of the premium before remittance abroad, the obligation to realise and repatriate export proceeds is treated as extinguished. The transaction is treated as satisfying section 2(6)(iv).

Export of goods: realisation under rule 96B. Where sale proceeds are not realised within the period prescribed under FEMA, the refund paid must be deposited back, to the extent of non-realisation, with applicable interest, within thirty days of expiry of the period or extended period. The period for realisation is the one prescribed in the RBI's FED Master Direction No. 16/2015-16 dated 1 January 2016, as amended from time to time (last amended on 5 June 2026). No recovery applies where the requirement of realisation has been written off, wholly or partly. The circular states that the write-off is by the RBI in rule 96B, and by the AD bank in para 3.1 of the circular.

3. ITC on demo vehicles for dealers in the dealer-agency model (Circular 262/08/2026)

Para 4.6 of Circular 231/25/2024-GST dated 10 September 2024 had blocked ITC on demo vehicles held by an authorised dealer acting merely as agent or service provider to the manufacturer, the dealer-agency model. The Board has now withdrawn that clarification.

Section 17(5)(a) denies ITC on motor vehicles for transport of persons with approved seating capacity of not more than thirteen, except where they are used for further supply of such vehicles, transportation of passengers, or imparting driving training. The Board found no practical difference between the dealer-agency model and the traditional dealership model. In both, demo vehicles are purchased against tax invoices, held as capital assets for a mandatory period, and sold later at written down value with tax payable at that point. The vehicles are also treated at par under the Central Motor Vehicle Rules, 1989. The Board also read the phrase "such motor vehicles" in section 17(5)(a)(A) as covering vehicles used for further supply of similar vehicles, not only the specific vehicle sold. The conclusion is that ITC on demo vehicles is not blocked under section 17(5)(a) for the dealer in the dealer-agency model.

4. Section 17(4) for banks, financial institutions and NBFCs (Circular 261/07/2026)

Section 17(4) allows banking companies and financial institutions, including NBFCs, engaged in accepting deposits and extending loans and advances to avail fifty per cent of eligible ITC, in place of proportionate credit under section 17(2). The circular answers three questions.

Who may opt, and who must. A registration of a banking company or financial institution that is not engaged in accepting deposits or extending loans and advances, such as one engaged exclusively in bullion trading, has neither the option nor the obligation. A registration engaged in deposits, loans and advances, and which may also be engaged in other supplies, has the option. Where one such registration of an entity opts in, all registrations of that entity engaged in deposits, loans and advances must comply.

Second proviso. The relaxation under the second proviso to section 17(4) is available only for supplies received from another registered person with the same PAN who has also opted to comply with section 17(4).

Reporting in GSTR-3B. The circular, which builds on Circular 170/02/2022-GST dated 6 July 2022 and the Invoice Management System (IMS) introduced from October 2024, sets out the method of reporting. Where IMS was not used, the eligibility of auto-populated ITC and of reverse charge ITC is first ascertained. Credit of tax on inputs and input services used for non-business purposes, and credit attributable to section 17(5) supplies, is permanently reversed in Table 4(B)(1). Credit under the second proviso is availed. Fifty per cent of the remaining credit is availed, and the balance is permanently reversed in Table 4(B)(1) for the same period. Credit that cannot be ascertained as eligible now, but may become eligible on fulfilment of section 16 conditions, is temporarily reversed in Table 4(B)(2). It may be reclaimed later in Table 4(A)(5), subject to section 16(4), and shown in Table 4(D)(1) of the later period, with the same procedure applied. Where IMS is used, the taxpayer may accept, reject or keep pending invoices. Invoices for credit not yet eligible must be kept pending, so that they are not auto-populated in GSTR-2B. The same procedure then applies to the auto-populated and reverse charge amounts. For past periods, field formations are not to take an adverse view of a different reporting methodology, provided the credit availed under section 17(4) is consistent with these principles.

5. Input Service Distributor (Circular 260/06/2026)

The circular addresses six questions on ISD.

Registration. Separate ISD registrations may be obtained for each business vertical or place of business within a State or UT. Each registrant that receives input service invoices for or on behalf of distinct persons, and that must distribute credit under section 20, must obtain an ISD registration. The ISD may distribute credit only to the distinct person to whom the credit is attributable, under rule 39(1).

Who is liable. The ISD must distribute the credit to the recipients, in the manner provided under section 20. It is the recipients who must satisfy the conditions for eligibility under section 16 or section 17. Where credit is distributed in contravention of section 20, the ISD is liable to penalty under section 122(1)(ix), which is the higher of Rs. 10,000 or the tax evaded or credit irregularly distributed. Excess credit is recoverable from the recipients along with interest under section 21, and sections 73, 74 or 74A apply to determine the amount.

Timing and eligibility. Under section 20(2) read with rule 39(1)(a), credit available for distribution in a month must be distributed in that same month and reported in GSTR-6, as furnished under rule 65. Because procurement of services is centralised, the ISD is best placed to determine eligibility. Credit appearing in GSTR-6A is available for distribution only once the ISD ascertains it to be prima facie eligible. It is then distributed in the month of that ascertainment, separately as eligible and ineligible credit under rule 39(1)(g), and reported in GSTR-6.

Reversals by recipients. The ISD should distribute the entire credit available to it. The recipients, not the ISD, must make reversals under section 17(1), 17(2) or 17(4), read with rules 42, 43 and 38, as applicable.

Rule 54(1A) invoices and turnover. An invoice, credit note or debit note issued by a regular registrant having the same PAN and State code as the ISD, under rule 54(1A), is a credit-transfer mechanism. It is not an outward supply of that person, so the amount does not count toward turnover in the State or Union territory under section 2(112). It is also excluded from the adjusted total turnover under section 54(3) read with rule 89, for ascertaining maximum refund. The transfer is not input tax credit in respect of inward supply of that person, so it is not "net ITC" for refund under rule 89(4) and 89(5).

Reversals by the transferring registrant. The same-PAN, same-State registrant is not required to make reversals under section 17(1), 17(2) or 17(4) in respect of credit transferred under rule 54(1A). It must transfer the entire ITC available on account of tax paid under reverse charge to the ISD. That registrant may, however, be one of the recipients of credit, and as a recipient it would then bear the reversals.

6. Pre-deposit for appeals under sections 107(6) and 112(8) (Circular 259/05/2026)

The circular removes conflicting practices on pre-deposit.

Admitted amount and tax in dispute. The admitted amount is the portion of tax, interest, fine, fee and penalty arising from the impugned order that the taxpayer acknowledges as payable and does not intend to challenge. It must be paid in full before the appeal is filed. The remaining contested portion is the tax in dispute, and 10 per cent of it is the pre-deposit. The taxpayer decides at filing whether an amount is admitted or disputed, and records the decision in Table-14 of APL-01 and Table 20 of APL-05.

Quantum at the Tribunal stage. For an appeal to the Appellate Tribunal under section 112(8), the admitted part must be paid in full, together with 10 per cent of the remaining disputed amount, in addition to the amount paid for the Appellate Authority stage. The 10 per cent is computed on the liability confirmed by the Appellate Authority that the appellant disputes.

Refund orders. An order of the Appellate Authority or Tribunal need not expressly state that the pre-deposit is to be refunded. On receipt of the order, the refund claim is filed in FORM GST RFD-01 under item 7, "on account of order".

Refund despite departmental appeal. Where the appellant has obtained a favourable decision and applies for refund, the refund must not be denied merely because the department intends to appeal or has appealed. Refund remains payable unless the order is stayed by the Tribunal or a Court.

Interest. Under section 115, interest is payable from the date of payment where refund is due. Where pre-deposit is made at both the Appellate Authority and the Tribunal levels, the date of payment for interest is determined separately for each level, by the actual date of each payment.

Remand. Where the Tribunal remands the matter to the original adjudicating authority, the appellant is eligible for refund of the pre-deposit, to be granted within the prescribed time. In a partial remand, where part of the demand is upheld, the amount corresponding to the confirmed demand is first recovered or adjusted against the pre-deposit, with applicable interest. Only the balance is then refunded.

7. Demand, adjudication and appeal proceedings (Circular 258/04/2026)

This is the longest of the circulars. Its paragraph 17 states that its guidelines are illustrative and non-exhaustive, and that they must not be cited by proper officers in show cause notices, final orders or appellate orders. The circular covers show cause notices, adjudication orders, rectification and appeals.

Pre-SCN intimation. Under rule 142(1A), taxpayers may be intimated of the tax assessed as payable under sections 73, 74 or 74A through Part A of FORM GST DRC-01A, before a formal SCN is issued. This is encouraged wherever feasible.

Structure of an SCN. A well-drafted SCN should ordinarily contain: a brief profile and introduction of the case, including GSTIN or temporary ID, registration status, principal place of business, jurisdiction, tax periods and the background of the proceeding, with particulars of each noticee stated separately; a factual background and examination of evidence, phrased objectively, with expressions such as "it appears that" rather than conclusions; a discussion of the legal framework linking each omission or commission to the provision contravened, without unrelated sections; a concise statement of charges; a quantification of demand, financial year-wise where the notice spans several years, with a phrase such as "why interest as applicable should not be demanded" where interest depends on actual payment; and a concluding paragraph stating the adjudicating authority, the deadline for reply and the consequence of non-compliance. The Board cites G.R. Infra Projects Ltd. v. State of Madhya Pradesh (2026) 45 Centax 331 (SC), dated 19 August 2026, for the proposition that the notice must contain all requisite particulars and any deficiency cannot be cured later. It also cites the Telangana High Court in M/s Nice Enterprises v. Deputy Commissioner ST (2024) 21 Centax 554 on notices that merely reproduce statutory provisions.

Summary on the portal. Under rules 100 and 142, the summary of the notice or statement must be uploaded electronically in FORM GST DRC-01 or DRC-02, as the case may be.

Fraud, wilful misstatement and suppression. Sections 74(1) and 74A(5)(ii) cannot be invoked merely because tax has not been paid. The invocation requires specific evidence of fraud, wilful misstatement or suppression with intent to evade tax, and that evidence must be set out in the SCN. Suppression requires deliberate non-declaration for the purpose of evasion. An incorrect statement is not wilful misstatement unless knowingly false. Where facts are known to both parties, an omission by one does not amount to suppression. The circular cites G.R. Infra and the Andhra Pradesh High Court in Sriba Nirman Company v. Commissioner (Appeals) (2025) 29 Centax 206, affirmed by the Supreme Court. Mechanical use of the words "fraud", "wilful misstatement" or "suppression" is not enough. Where the SCN covers both sections 73 and 74, it must separately state the grounds and quantify each, and for FY 2024-25 onwards under section 74A, it must delineate the two sets of facts separately. A second SCN on the same facts invoking fraud or suppression is generally not valid, unless new and independent grounds exist. Subsequent notices should ordinarily issue under sections 73 or 74A(5)(i).

Timing and parallel proceedings. Notices should issue well before the statutory due date, to allow time for reply and completion of adjudication within the timelines under sections 73(10), 74(10) and 74A(7). Under section 6, where a proper officer under the SGST or UTGST Act has already initiated proceedings on the same subject matter, no proceeding may be initiated under the CGST Act. The circular cites M/s Armour Security (India) Ltd. v. Commissioner, CGST, Delhi East (2025) 33 Centax 222 (SC), and asks for coordination between the CGST and SGST authorities.

Service. Notices must be served by the modes in section 169, including delivery to the addressee or authorised representative, speed post or courier with acknowledgment due, electronic communication to the registered email, and making the notice available on the common portal. The DRC-01 summary must also be uploaded.

Natural justice and personal hearings. Orders passed without a proper hearing are liable to be set aside. Under section 75(4), a hearing must be granted on written request or where an adverse decision is contemplated. The guidelines are:

• Under section 75(5), no adjournment may be granted more than three times. Officers may therefore grant at most four hearing opportunities before an order. Adjournment requests are to be considered judiciously, with reasons recorded for refusal.
• Requests for appearance by authorised representatives under section 116 are to be considered.
• A virtual hearing option is to be provided where possible.
• Records of each hearing, including date, time and attendees, must be maintained and incorporated in the order.
• The order should be communicated preferably within one month of the personal hearing.
• If the adjudicating authority is transferred, a fresh hearing is required by the successor, unless the outgoing authority can pass the order before relinquishing charge.
• An authority letter or vakalatnama must be submitted at the hearing and kept with the records.

Drafting the adjudication order. The order should be a speaking order that will withstand scrutiny on appeal. The circular quotes from Joint Commissioner of Income Tax, Surat v. Saheli Leasing & Industries Ltd. (2010) 253 ELT 705 (SC) on the structure and language of orders, and advises that the judgment be pronounced within three months of arguments concluding. The order should:

• open with a concise summary of facts, including taxpayer details, SCN particulars, periods, proposed demand, interest, penalty and grounds, with each noticee listed separately;
• set out all issues for determination, both of law and of fact;
• examine the evidence critically against each allegation, recording where documents do not support the allegation or are inconclusive;
• examine each submission of the taxpayer under FORM GST DRC-06 or at the hearing, recording whether it is accepted, partly accepted or rejected, with reasons. Generic statements such as "reply has been considered" should be avoided;
• confine findings to the grounds in the SCN, as section 75(7) forbids demand on grounds not specified in the notice and an amount exceeding the notice. Any new issue requires a separate SCN;
• verify the accuracy and current status of case law cited by either side, and give reasons where a judgment cited by the noticee is held inapplicable. Preference is to be given to Supreme Court and jurisdictional High Court decisions;
• quantify tax, interest and penalty issue-wise and year-wise, separately under CGST, SGST, IGST and UTGST, preferably in tabular form. Interest on short or unpaid tax runs until actual payment, and may be quantified as on the order date, subject to section 75(9). Where any demand is dropped, both the original and the confirmed amount must be stated, and pre-payments appropriated;
• record clear reasons before imposing any penalty, with regard to the general discipline of section 126; and
• conclude with a reasoned closing paragraph stating outcomes and provisions relied on.

The circular also records that where AI or other technological tools are used in adjudication, they must be subject to human oversight, and their output must be independently verified before reliance, since the responsibility for the order rests with the issuing authority.

Timely disposal. Orders should not be issued close to deadlines. Monthly disposal targets may be set and monitored by senior officers.

Extended period. Where the SCN lacks evidence of fraud, wilful misstatement or suppression with intent, the adjudicating authority must record that finding and confine the demand to section 73 or 74A(5)(i), giving reasons.

Rectification under section 161. An error apparent on the face of the record may be rectified on application within three months of the order, or suo motu, and the rectification order must be passed within six months, except in cases of clerical or arithmetical error. Rectification must be made by the issuing authority itself. It is limited to errors ex facie and incapable of argument, as held in Arun Dev Upadhyaya v. Integrated Sales Service Ltd. (2023) 8 SCC 11. Errors of law, or re-appreciation of facts, are for appeal, not rectification. Applications are disposed of expeditiously in FORM GST DRC-08, and orders are communicated to the jurisdictional reviewing authority.

First appeal: preliminary scrutiny. The Appellate Authority under section 107 must first scrutinise the appeal under rule 108 for maintainability and completeness, including particulars, limitation, form, pre-deposit, grounds, documents and jurisdiction. Merits should not be rejected summarily at registration.

Limitation. An appeal must be filed within three months from communication of the order. The Appellate Authority may condone a further one month where sufficient cause is shown, under section 107(4). Limitation is a separate preliminary issue. An appeal filed beyond the period, and not condonable, is not to be decided on merits, even if a prima facie case appears. Reasons must be recorded.

Withdrawal. Under rule 109C, withdrawal is sought in FORM GST APL-01/03W. Once APL-02 has been issued, withdrawal needs the approval of the Appellate Authority, to be decided within seven days of filing.

Hearings in appeal. Hearing dates, including adjourned dates, are to be communicated through the portal. Records of proceedings are to be uploaded as attachments on the portal. The appellate order must record the date of each hearing, the appearance of the appellant or representative, submissions, documents furnished and directions issued. These form a substantive part of the order.

Additional ground. Under section 107(10), an additional ground may be permitted where the omission was neither wilful nor unreasonable. A legal ground arising from the existing demand may be considered, but a new factual issue requiring fresh investigation should not ordinarily be entertained. Reasons must be recorded.

Additional evidence. Under rule 112, additional evidence is admissible only in the circumstances specified, such as refusal by the adjudicating authority to admit admissible evidence, sufficient cause for non-production, or lack of adequate opportunity. Reasons must be recorded. Where it is rejected, a personal hearing must be given. Before admission, the adjudicating authority must be given a reasonable opportunity to rebut it. Appeal proceedings should not become a fresh investigation to cure deficiencies in the original adjudication.

Time for disposal. Under section 107(13), appeals should, as far as possible, be decided within one year from filing, excluding any period of stay by a Court or Tribunal. Senior officers must monitor disposal.

Cross-appeals. Where the taxpayer and the department have appealed against the same order, the appeals are to be processed together and disposed of by a common, composite order, with the summary in FORM GST APL-04 showing the final demand confirmed.

Application to appellate authorities. Paragraphs 10, 11 and 13 apply, mutatis mutandis, to appellate authorities.

8. Guidelines for GST registration applications (Circular 257/03/2026)

This circular, with Annexures I to VI, guides applicants in filing FORM GST REG-01 and sets out how officers must process applications. It is the most practical of the set for new registrants.

Forms and portal. Registration is filed online on the GST portal (Services, Registration, New Registration). Non-resident taxable persons file REG-09. Persons deducting or collecting tax at source file REG-07. OIDAR suppliers file REG-10. UN bodies and embassies apply under REG-13.

Part A. The legal name must match the PAN and, for companies, the incorporation certificate. For a proprietorship, the proprietor's name is to be shown against the legal name. The State, district and PPoB details must be correct. Where the PAN is linked to an email address and mobile number, those may be used.

Part B and constitution. The correct constitution of business must be chosen. A partnership deed must be uploaded for a firm. A registration certificate or proof of constitution must be uploaded for a society, trust, club, association, government department, local authority, statutory body and similar entities. A Karta document is needed for an HUF. For SEZ units and developers, the category, approval order number, date, validity and approving authority must be stated, and the approval order uploaded. The composition option, casual taxable person and rule 14A must be clearly marked where applicable. The reason for registration must be selected from the drop-down and aligned with the constitution.

Promoters, partners and photographs. Details of proprietors, managing and other partners, Karta, managing and whole-time directors, members of managing committees, and trustees must be given, with DIN for directors and designated partners. Recent colour photographs of the persons specified in para 3.4.2 must be uploaded. Each photograph must show the full front face of the individual alone, not a group photo, and must not be a copy of an identity document, in whole or cropped.

Authorised signatories. Up to ten authorised signatories may be given, each with details and a photograph. An authorisation letter must be uploaded for each. The guidelines for promoters apply to them.

Authorised representative. Where a GST practitioner is appointed, the enrolment ID must be given. For any other representative, name, designation, mobile, email and PAN must be given.

Principal place of business. The PPoB must be a specific address, including building, flat, shop or plot number, road, locality, village or town, taluka where applicable, district, PIN code and nearby landmark. Latitude and longitude should be provided where possible. The address must match the proof uploaded. Incomplete addresses, such as only a khasra number, road or locality, may lead to queries or a negative physical verification report. The correct State and Centre jurisdiction must be selected from the PIN code. The nature of business, such as manufacturing, wholesale, retail, supplier of services, warehouse or depot, must be chosen.

Proof of premises. The applicable document depends on possession.

• Owned premises. Latest property tax receipt, municipal khata, document certifying property identification, latest electricity bill or latest water bill in the applicant's name. Premises in the name of a parent, spouse, sibling or partner cannot be declared as owned. The option is "Consent", "rented/leased" or "shared".
• Inherited premises. Where the premises stands in a deceased ancestor's name and no document is in the applicant's name, the applicant uploads a death certificate, an affidavit in Annexure IV, and a qualifying document in the deceased's or applicant's name.
• Rented or leased premises. Where a registered rent or lease agreement is available, it must be uploaded. Where registration is not required, the agreement must be uploaded along with a document in the lessor's name. If a utility bill is in the tenant's name, it may be accepted with a valid rent agreement. Where no agreement exists, the applicant gives an undertaking in Annexure V, along with a utility bill in the tenant's name.
• Consent premises. Where the owner is a family member, partner or director, the owner's consent letter in Annexure VI and a document in the consenter's name must be uploaded. Where premises are co-owned, all co-owners must consent.
• Co-working spaces. The membership agreement must show the period, the allocated desk or cabin, and whether the provider owns or leases the premises. Where the provider owns it, a document in its name is needed. Where it leases, the registered lease between owner and provider is needed.
• SEZ. The approval letter, with due validity, issued by the Development Commissioner must be uploaded.
• All uploads must be clear, complete and legible.

Additional places of business. These follow the same document requirements. Unmanned telecom towers and ATMs need not be declared.

State-specific information. In Maharashtra, Rajasthan, Odisha, Andhra Pradesh, Assam and Madhya Pradesh, the electricity board or unit and consumer account number are mandatory for the PPoB.

Bank accounts. Bank accounts in the business name, obtained on the PAN, should be given, and may be given in the application. Under rule 10A they must be furnished within 30 days of grant of registration or before furnishing outward supplies, whichever is earlier. Up to ten accounts may be given. Proof is a passbook first page, a bank statement page or a cancelled cheque showing the name and account details.

Earlier suspended or cancelled registrations. Where the same PAN had a registration suspended under rule 21A(2) or (2A), or cancelled under rule 22, all due returns for that registration, including the final return in GSTR-10, must have been filed and no liability must be pending.

Processing timelines. Under rule 9, where the applicant has opted for and completed Aadhaar authentication, the application must be processed within seven working days. Otherwise, or where physical verification is ordered, it must be processed within thirty days, after physical verification under rule 25. Applicants are advised to opt for Aadhaar authentication. Where selected for biometric verification or document verification at a Facilitation Centre, the application is complete only on successful verification.

Simplified registration. A small taxpayer who mainly supplies to unregistered persons, or passes on ITC of less than Rs. 2.5 lakh a month, may opt for rule 14A registration, which is granted automatically within three working days. Applicants identified under rule 9A for electronic grant are also registered automatically within three working days. Exit from rule 14A is by FORM GST REG-32, after filing returns for at least one tax period, and is processed as a normal application.

Queries and rejection. A notice in FORM GST REG-03 may be issued within seven working days of application only in three cases: where a document is incomplete or illegible; where the address does not match the uploaded document, or the document is not valid proof of address, in which case the officer may seek documents from Annexure IV; and where the address is incomplete or vague. Where physical verification is involved, the notice must be issued within thirty days. Officers must not seek unwarranted documents, such as a residential address in the same city, Udyam certificate, or presumptive queries about the activity. The applicant replies in FORM GST REG-04 within seven working days. The officer must decide within seven working days of the reply. Rejection is by FORM GST REG-05, with reasons recorded in writing.

Physical verification. Where the ARN is assigned for physical verification, the officer must upload the report in FORM GST REG-30, with photographs and a GPS-enabled site photograph, at least five days before the thirty-day period expires. The report must state whether the PPoB exists and, if not, the efforts made to locate it. An ARN assigned to the wrong jurisdiction must be reassigned on the portal.

Deemed approval. If no action is taken within the period in rule 9, registration is deemed approved.

Limits on officers. Officers must process applications strictly against the prescribed document list, and issue notices only in FORM GST REG-03. They must not make subjective assessments, such as whether an electricity connection is domestic or commercial, whether bill amounts are too high, or whether a residential premises is unfit for business. Utility bills and property tax receipts are verified only for name and address. Lease agreements are checked for validity, the names of the lessor and applicant, and the exact address.

Faceless process. Registration is online and faceless, except for physical verification and Facilitation Centre formalities. All communications are through the common portal, and applicants should monitor them.

Grievances. An applicant aggrieved by delay or unwarranted queries may complain to the jurisdictional Chief Commissioner of Central Tax or Commissioner of State Tax, on the special email designated for the purpose.

FAQs (Annexure I). The annexure answers 51 questions. The points most relevant to applicants are these. The threshold for goods is Rs. 40 lakh and for services or both is Rs. 20 lakh, reduced to Rs. 20 lakh and Rs. 10 lakh respectively for special category States at their option. Mandatory registration applies irrespective of turnover to inter-State suppliers, casual taxable persons, reverse charge liable persons and others listed in question 3. A separate registration is mandatory for an SEZ unit even where the applicant has a non-SEZ registration in the same State. A post office box is not acceptable as a PPoB. Udyam certificates are neither required nor accepted as proof of premises. Multiple branches in one building may be declared as one PPoB and APoBs, or as separate PPoBs, with proof for each. The residential address need not be in the same State or city as the PPoB. Up to ten signatories and ten bank accounts may be declared. Biometric authentication at a GST Suvidha Kendra must be completed within fifteen days of receipt of the TRN, failing which the application will not be processed further. Changes to partners, directors and the like are made by REG-14, as are additions of goods or services.

Coverage Check

The table below records where each circular and its paragraphs are addressed in this note.

This note is a general summary for information only and does not constitute legal advice. The circulars should be read in full before any action is taken.