Following the latest decisions of the Goods and Services Tax (GST) Council, the Central Board of Indirect Taxes and Customs (CBIC) issued eight circulars focusing on simpler registration with a list of required documents, export payments and clear guidelines for raising tax demands with focus on pre-show-cause notices and proving the intent of fraud before invocation of charges.Citing an analysis of GST registration applications, including the reasons for rejection and the nature of queries raised during processing, the CBIC said that delays or rejections were often attributable to certain deficiencies in the applications including non-furnishing of requisite information or documents; submission of incorrect, incomplete, or inconsistent details, or uploading of documents that are not clearly legible. Stating that such issues are commonly observed in respect of identity details of the applicant, proof of principal place of business, the CBIC directed tax officers to refrain from seeking unwarranted documents or raising presumptive queries not relevant to GST registration applications.“While there is a need to exercise due diligence in processing registration application to prevent GST registration of being obtained by unscrupulous and fraudulent elements for passing on input tax credit (ITC) without any underlying supply, at the same time, it is also important to ensure that genuine applicants seeking registration are able to complete the process without undue inconvenience,” the CBIC said in the circular dated October 26.CBIC circular on registrationFor premises taken on rent or lease, the applicant is required to upload a clear and legible copy of the valid registered rent or lease agreement and no other document is required. If the rent or lease agreement is not registered, then an applicant has to upload the latest copy of any one of the documents in the name of the landlord such as the property tax receipt, municipal khata, property identification document, electricity or water bill along with the rent agreement.Under GST, suppliers exclusively dealing in goods, with annual aggregate turnover of Rs 40 lakh are required to register, while for suppliers in the supply of goods and services both or supply of services only, the threshold is Rs 20 lakh.As per GST rules, businesses opting for Aadhaar authentication while applying for GST registration are granted registration within seven days. In other cases, the registration application is processed within 30 days of the application submission after physical verification of the place of business. “It is, therefore, in the interest of the applicant that he opts for and undergoes authentication of Aadhaar number… to get his application for registration processed at the earliest,” the CBIC said.While noting that proper scrutiny of registration application by the GST officers plays a critical role in ensuring the integrity of the registration process and in preventing system misuse, the CBIC pointed out that grievances have been received regarding the difficulties faced by the applicants in some cases while getting GST registration, either due to rejection of the application for registration on various grounds.Story continues below this ad“On registration, the detailed guidance addresses several practical issues that have often resulted in ground-level queries and disputes, including co-working spaces, consent-based premises, ATMs and telecom towers, and state specific information requirements. Together with defined documentation requirements for different forms of businesses, this should help reduce differing interpretations and make the registration process more predictable for genuine taxpayers,” Saurabh Agarwal, Tax Partner, EY India, said.For issues related to demand, adjudication and appeal proceedings under the Central GST (CGST) Act, the CBIC said there has to be a uniform reference framework for officers engaged in quasi-judicial proceedings and consistency, transparency and uniformity in the implementation of provisions of law across field offices. The circular stated that pre-show-cause notice has to be issued to taxpayers, wherever feasible, as it offers them a “vital opportunity to clarify their position prior to formal proceedings”. This will help promote voluntary compliance and reduce the necessity of issuing a show-cause notice (SCN), it said. SCNs should contain a concise summary of the allegations against the noticees and clearly state the grounds on which they are required to explain why action, as per statutory provisions, should not be initiated against them, the circular said.On fraud charges, exportsFor levelling of fraud charges, the CBIC said that GST field officers will have to prove the intent of a taxpayer to evade taxes before invoking the stringent GST law provision relating to ‘fraud, wilful misstatement, or suppression of facts’ while raising tax demand. It prescribed mandatory human oversight while using artificial intelligence (AI) or other technological tools to ensure that the information obtained through AI tools gets independently verified for accuracy before reliance or incorporation into the adjudication order.“The emphasis on evidence-backed notices, clear quantification and disciplined adjudication seeks to address disputes at their origin rather than allow procedural infirmities to travel through successive appellate stages. Taken together, the reform direction is increasingly clear to simplify entry into GST, make credit and exports work with commercial realities, and improve the quality of tax administration. The real test will now be field-level implementation, because the success of the next phase of GST reform will ultimately be measured by taxpayer experience, not merely by the number of legislative or procedural changes,” Manoj Mishra, Partner and Tax Controversy Management Leader, Grant Thornton Bharat, said.Story continues below this adFor exporters, the CBIC circular noted allowing set-off as a valid mode of settlement under Foreign Exchange Management Act (FEMA). “Where export receivables are set off against import payables in accordance with RBI directions, the prescribed realisation condition for qualifying as export of services under the IGST Act would be regarded as fulfilled,” it said.The CBIC circulars follow the decisions taken at the 57th GST Council meeting earlier this month, which approved several process reforms and tweaks to facilitate decriminalisation, most importantly with scrapping of arrest powers of tax officers, while raising the prosecution threshold to Rs 5 crore from Rs 1 crore.