A person can apply GST registration number to comply with the GST Act on a mandatory basis or to voluntarily utilize the benefits under the CGST Act 2017.

There may be problems faced by the applicant when trying to register a GST number, in this article we have discussed, frequent problems in GST registration and solutions.

Problems faced in GST registration

Problems or issues in GST registration may be classified into three categories, namely type of GST registration application, category in which GST registration is to be applied, and documentation issues. 

When the officer notices any of the above-mentioned issues he will issue a notice for seeking additional information / Clarification/ Documents relating to the Application for registration in Form GST REG-03.

In case the notice is not responded to with the required details or no response is submitted within the due date, the application for GST registration will be rejected.

Challenges in choosing the right category of GST registration.

• There are different categories in which GST registration application can be applied, the category needs to be selected in reason to obtain the registration option. This field is critical for future compliance. To understand more about the different categories, read our article on Who is required to apply for Online GST registration.
• The option for payment of taxes under composition can be applied only at the time of application for GST registration or from the beginning of the next financial year, so it is advised to work out profitability and advantages under the regular option as well as the composition option.
• GST registration can be applied in an individual name or trade name for a proprietorship, it is always recommended to apply GST for a sole proprietorship firm in the name of a business name, and this field is called a Trade Name.

Critical Problems in filing of GST registration application and documentation

Date of commencement of business: The date of commencement of business for any other form of business other than proprietorship firm is the date of registration of the business structure

In the case of a partnership firm, private limited company, limited liability partnership firm, or one-person company, the date of formation of the entity is the date of commencement of business.

The date on which liability to register arises:  The liability for GST registration arises in different scenarios such as on crossing the threshold limit, or commencement of certain types of business that require mandatory GST registration, this date is relevant for invoice revision and the due date for registering GST number.

If you are not sure about this date, it is recommended to get assistance for GST registration service from a GST registration consultant.

Aadhaar authentication :

Aadhaar authentication will have a greater impact on the time required for GST approval and the success rate of approval due to the inspection of the principal place of business.

It is advised to check the name as per the Aadhaar card and PAN card, linking the active mobile number with the Aadhaar card, in case there is a mismatch in name or the mobile is not linked it is recommended to complete the Aadhaar authentication process, after updating the same within 15 days from the date of submission of GST registration application. If aadhaar authentication is not completed within 15 working days then inspection of the principal place of business will be carried out by the proper officer.

Reply to Common queries for GST registration.

Once the GST registration application is submitted and the Application Reference Number – ARN is generated, the concerned GST officer should approve or raise a query by issuing a” Notice for seeking Additional Information/ Clarification/ Documents relating to Application for Registration”.  SCN- show cause notice within 7 working days from the date for ARN generation.

If the query is raised, the applicant should respond to the queries raised by the officer by applying for clarification.

Application for filing clarification shall be made by modification in the registration application filed or without modification in the registration application filed.

In most of the cases’ applications for filing clarification shall be filed without modification of registration application filed.

Queries relating to the principal place of business

1. Rental agreement is for a period exceeding 11 months: In Tamil Nadu, registration of rental agreement is required when the period of agreement is 1 year and above.

The officer may raise a query that the rental agreement is more than 11 months or may instruct to provide a registered rental agreement or amend the rental agreement.

Suggested Reply
In case of unregistered rental agreement is executed for 1 year or more, it is suggested to provide a fresh rental agreement with a period of less than 1 year or submit the same rental agreement after registration with the Tamil Nadu registration department.

In case the rental agreement is executed for a period less than 1 year and still if the officer mentions that the agreement is more than 11 months, the reply shall be given as “Registration not required for a rental agreement for the period below 1 year and should also give an explanation for the period above 11 months and below 1 year.

2. The date of the stamp paper is after the date of the rental agreement: This is a technical error in documentation, this query is raised when the stamp paper purchase date is after the date of the rental agreement execution date.

For example, stamp paper was purchased on 11th May 2024 however the rental agreement execution date is 5th May, this is common logic that rental agreements cannot be executed even before buying the stamp papers.

Suggested reply

This query cannot be replied to by submitting the same rental agreement without changing the dates in the rental agreement, it is suggested to execute a fresh rental agreement wherever possible in case the dates are mentioned in stamp papers.

Where the dates can be changed by changing the date in plain sheets with stamp papers the same agreement can be submitted after changing the respective dates.

If providing a fresh rental agreement is not possible or unable to update additional sheets, the last option is to change the date in the original document and both the tenant and owner should countersign near the correction area.

3. Correction in Rental Agreement data: The data in the rental agreement, such as the legal owner of the property, mismatch of address as per electricity database, mismatch of the address of the business owner,  incomplete witness details, and queries relating to the principle place of business.

Suggested reply

Witness details not complete: This query raised relating to the rental agreement will be vague in terms of explanation, then details such as the father’s name, age, address, Aadhaar number, and mobile no of the witness should be added, to the rental agreement by changing additional sheets in rental agreements, or filling up the details in the existing agreement.

4. Residential premises are used for the principal place of business CGST Act 2017 defines the place of business as a place from where the important operations of the business, and accounting are carried out, it does not specify that residential premises should not be used for the business.

However, the terms in the rental agreement should specify that the property is let out for commercial purposes, and the name of the business should be mentioned.

Suggested reply

The reply should be clear that the residential premises are let out for commercial purposes, these queries should be dealt with professional and bold reply. It is suggested to get assistance from a GST registration consultant for professional reply and easy approval.

5. Attach photos of the owners: There may be instances where photos of the proprietor in the business premises are required by the officer

Suggested reply
The reply should include photos of the name board outside the premises, one photo near the entrance of the premises, and two photos inside the premises, the photos should be taken using a GPS camera with details of time and location stamped.

Queries relating to GST number

There are instances when the officer raises queries regarding the already existing GST number, the query raised by the officer will be regarding legal provisions, circulars, and notifications issued under the GST Act.

To respond to these types of queries reference to relevant sections and provisions of the law should be given.

When the person already has a GST number in a state, the officer may raise a query regarding why an additional GST number should be approved.

There are multiple situations resulting in the query relating to the existing GST number and your reply should come under any one of these situations.

Query raised is relating to existing GST number of different natures of business: The offices raise query mentioning the existing GST number when  GST registration application is made for different natures of business, and instruct you to use that GST number, and explanation will be required for approval of additional GST number

Suggested reply
Additional GST numbers can be applied for different business verticals, the nature of business is completely different and this can be referred to by clear attention to the HSN or SAC code mentioned in the application to get a GST number.

Query raised is relating to existing GST numbers in the same GST address: When the nature of business is different the officer may issue a notice seeking clarification or additional documents for approval of the GST number if the registration application is filed for an address where another GST number is approved for the same person.

Suggested reply 

When the nature of business is different as mentioned above, the reply should give attention that a separate set of accounts are maintained for the different businesses, bank accounts, and operations are entirely different for the new business.

The query is raised relating to GST number already canceled: There may be a case where the officer raised a query for GST numbers canceled on application by the taxpayer or Suo motto cancellation by the GST officer for not filing the periodic returns, final returns, etc.

In some cases, queries will be related to the partnership firm or private limited company in which the person was a partner or director respectively.

Suggested reply

This query is valid as per the GST act and the officer will approve the GST registration application only after filing all the pending returns and payments are made. The reply should be made only when all the pending returns are filed.