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Addressing GST Registration Deficiencies and Preventing Future Notices

Businesses must diligently provide accurate details during GST registration to avoid errors that can lead to deficiency notices. Although such notices are common, taxpayers have a structured process to clarify and rectify their information through the GST portal. By understanding common mistakes and taking specific preventative measures, businesses can ensure a smooth registration process and reduce the likelihood of receiving future tax official inquiries.

📖 3 min read read🏷️ GST Registration

Businesses must exercise caution when providing information during GST registration, as these details become a permanent record. Despite careful attention, human errors can occur, potentially leading to discrepancies and the issuance of deficiency notices by tax authorities. Such notices, however, should not be a cause for alarm, as taxpayers have the option to submit clarifications and rectify their registration information.

Recent Developments April 17, 2025 The Central Board of Indirect Taxes and Customs (CBIC) has released updated guidelines for handling GST registration applications. These instructions aim to simplify the procedure and reduce requests for extraneous documentation. They clarify which documents are acceptable for confirming the primary business location and the nature of the business entity. Furthermore, the guidelines address issues related to physical verification and ensuring prompt approval of GST registrations.

Significant Points:

  • A comprehensive list of acceptable documents for verifying the principal place of business has been specified.
  • Tax officials are advised against requesting unnecessary documents, such as the lessor's PAN or Aadhaar details.
  • All registration applications must be processed strictly within the stipulated timeframes.

Common Errors During GST Registration

Taxpayers often make several mistakes during the GST registration process that can lead to deficiencies:

  • Providing incorrect jurisdictional information.
  • Attempting registration using a Permanent Account Number (PAN) that has been canceled.
  • Submitting a personal PAN instead of the business's PAN.
  • Discrepancies between promoter details and their corresponding PAN data.
  • Inconsistencies between promoter information and Director Identification Number (DIN) details found in the Ministry of Corporate Affairs (MCA) database.
  • Mismatches between promoter details and the Unique Identification Authority of India (UIDAI) Aadhaar database.
  • Entering an invalid Corporate Identification Number (CIN).
  • Failing to provide adequate, current, or complete supporting documentation.
  • Errors introduced during data entry into the registration form.
  • Uploading unsuitable or incorrect documents.

Responding to Deficiency Notices from Tax Authorities

Follow these steps to address deficiency notices received from tax officials:

Step 1: For new registrations, select 'Register Now' and then 'Temporary Reference Number (TRN)'. Enter your TRN, which may require a mobile/email One-Time Password (OTP) for the next step. For existing registrations, simply log into the GST portal using your credentials.

Step 2: Navigate to the 'Services' menu, then 'Registration', and click on 'Application for Filing Clarifications'.

Step 3: Locate the relevant notice by searching using either its reference number or the Application Reference Number (ARN).

Step 4: To answer the department's specific inquiries for a new registration application:

  • If 'Yes' is chosen under 'Modification in the Registration Application filed', the initial application will become editable, allowing you to modify fields identified in the notice and upload any required documents.
  • If 'No' is selected, an application form will appear, presenting various 'Queries' that require your 'Query Response' submission.

Step 5: Provide any supplementary information and supporting documents as requested.

Step 6: Complete the verification by choosing the authorized signatory's name from the dropdown menu and specifying the location. Finally, submit the application using either 'Submit with DSC' (Digital Signature Certificate) or 'Submit with EVC' (Electronic Verification Code), depending on the available authentication method.

Preventing Deficiency Notices During GST Registration

To minimize errors and avoid receiving deficiency notices during GST registration, consider these preventative measures:

  • Confirm that essential details such as the Permanent Account Number (PAN), business name, and business constitution align precisely with official PAN records, as GST registration is linked to PAN. Additionally, verify that the PAN is active and not canceled.
  • Double-check the accuracy of the provided email address and phone number to ensure timely receipt of the One-Time Password (OTP) and Temporary Reference Number (TRN).
  • Submit the registration application promptly, ideally within 15 days, to prevent its automatic deletion from the system.
  • Verify that the details of promoters and authorized signatories, including Director Identification Number (DIN), PAN, and Aadhaar, are consistent with their respective official databases (e.g., Ministry of Corporate Affairs, NSDL, UIDAI).
  • Provide an accurate and verifiable address, as tax authorities may conduct physical site inspections.
  • Ensure that all required supporting documents are current, valid, and correctly uploaded.

Frequently Asked Questions

What is the primary purpose of GST registration in India?
GST registration allows businesses to collect Goods and Services Tax from their customers, claim Input Tax Credit (ITC), and comply with various GST regulations, making them legally recognized under the GST regime.
Are there different types of GST registration?
Yes, there are several types, including regular registration for normal taxpayers, composition scheme registration for small businesses, and registration for non-resident taxable persons, among others, each with specific eligibility criteria and compliance requirements.
What are the consequences of not registering for GST when required?
Failure to register for GST when mandatory can lead to significant penalties, retrospective tax liabilities, and loss of Input Tax Credit benefits, impacting the business's profitability and legal standing.
How frequently must GST returns be filed?
The frequency of GST return filing depends on the type of registration and turnover. Most regular taxpayers file monthly, while those under the composition scheme file quarterly, and some may have annual filing requirements.
Can a business voluntarily register for GST even if not mandated?
Yes, businesses can opt for voluntary GST registration. This can be beneficial for claiming ITC, even if their turnover is below the threshold, and for enhancing credibility with clients, especially B2B partners.