In a major update aimed at making GST registration smoother for genuine applicants and tougher for fraudsters, the Central Board of Indirect Taxes and Customs (CBIC) has issued Instruction No. 03/2025-GST on April 17, 2025.

This instruction replaces the earlier one from June 2023 and comes after several complaints of excessive documentation demands, confusing queries, and unjustified delays in the registration process.

Let’s break down what this new instruction means for businesses, tax officers, and India’s larger GST ecosystem.

The Purpose: Strike the Right Balance

GST registration is the gateway to doing formal business in India. But in recent years, businesses—especially small ones—have reported being harassed with long delays, odd queries, and document demands that aren’t officially required.

At the same time, tax authorities have uncovered many cases where fake firms were created just to claim ineligible Input Tax Credit (ITC).

This new circular is CBIC’s attempt to make things easier for honest taxpayers while putting better checks on fraudulent registrations.

Key Guidelines in CBIC Instruction No. 03/2025-GST

1. Officers Must Follow the Standard Document List — No Extra Demands

Officers are strictly instructed to follow the official list of documents prescribed in GST REG-01, the application form used for GST registration.

That means:

  • Only ask for documents mentioned in REG-01 (like proof of business address, identity documents, and business constitution papers).

  • Do not create your own checklist or ask for extra documents like tax returns, bank statements, or photos unless it’s absolutely required.

If an officer feels additional documents are essential, they must first get permission from a Deputy Commissioner or Assistant Commissioner. This step ensures accountability and consistency across cases.

Why it matters: This stops unnecessary harassment and ensures that applicants across India face the same requirements, no matter which officer handles their case.

2. Clear and Simple Rules for Proving Business Premises

The instruction now clearly defines what documents are acceptable to prove ownership or access to the business premises. Here’s a breakdown:

If You Own the Premises:

  • Just one document like a property tax bill, electricity bill, or municipal khata is enough.

  • No need to submit multiple ownership proofs or land records.

If You’re Renting or Leasing:

  • A valid rent or lease agreement is sufficient.

  • If the agreement is registered, the officer cannot ask for the landlord’s PAN or Aadhaar.

  • If it’s not registered, a copy of the landlord’s ID and proof of ownership (like an electricity bill or property document) is acceptable.

If It’s a Shared or Relative’s Premises:

  • A consent letter from the owner, their ownership proof, and an ID document will do.

  • This is especially helpful for startups and home-based businesses.

No Paper Trail? You Can Still Apply:

  • Submit an affidavit confirming possession, along with an electricity bill or similar utility bill in your name.

Why it matters: The focus is on simplifying the process, not complicating it. The aim is to make registration possible for all types of legitimate businesses, even if they operate from shared or informal spaces.

3. Clarified Requirements for Business Constitution

Different types of entities need to submit different documents to prove their legal existence or constitution. The new rules clearly lay these out:

  • Partnership Firms: The Partnership Deed is enough. No need for trade licenses or tax returns.

  • Trusts, Societies, Clubs, Government Bodies: Submit the registration certificate or constitution document.

  • Private Limited Companies: Need to share Certificate of Incorporation issued by the Registrar of Companies.

  • Proprietorships: Only the owner’s PAN and Aadhaar are usually needed.

Importantly, officers cannot demand documents like MSME certificates or trade licenses, unless there is a specific, legal reason for it.

Why it matters: These guidelines prevent overreach and protect businesses from being asked for irrelevant paperwork, especially from officers who may not fully understand the law.

4. No More Irrelevant or “Presumptive” Questions

Officers can no longer ask questions based on personal bias, assumptions, or vague doubts. The instruction bans “presumptive queries,” such as:

  • “Why is your business located in a residential area?”

  • “How can you run an e-commerce company from a small flat?”

  • “Why are you dealing in this product code (HSN) in this region?”

Such queries are not only unfair but also discourage entrepreneurship, especially among small businesses.

Only document-based, legally valid questions can be asked—if the officer finds a mismatch or inconsistency in the uploaded details.

Why it matters: This change removes subjectivity and bias from the process and ensures that officers can’t harass applicants with irrelevant questions.

5. Defined Timelines for Application Processing

CBIC has now laid down strict timelines to ensure faster disposal of GST registration applications:

Normal Applications (Not Risky):

  • Must be processed and approved (or clarification sought) within 7 working days from the date of submission.

Risky Applications (e.g., Aadhaar mismatch, flagged for fraud risk):

  • Physical site verification is mandatory.

  • Officer must complete the entire process within 30 calendar days.

Why it matters: It prevents unnecessary delays and ensures that genuine businesses aren’t left waiting indefinitely for their GSTIN (GST Identification Number).

6. Step-by-Step Physical Verification Protocol

For applications requiring site verification, CBIC has issued a detailed process:

  • The officer must physically visit the place of business.

  • Take GPS-tagged photographs during the visit.

  • Upload all findings in Form GST REG-30 (the inspection report).

  • This report must be submitted at least 5 days before the 30-day deadline.

Why it matters: With clear timelines and digital proof, the process becomes more transparent, standardized, and less prone to misuse.

7. Clarifications and Rejection Protocols

If an officer finds issues in an application:

  • They can seek clarifications only for valid reasons, and these must be clearly mentioned in Form GST REG-03.

  • The applicant will then have 7 working days to reply using Form GST REG-04.

  • If the officer still finds the application unacceptable, they must issue a formal rejection via Form GST REG-05, clearly stating the grounds for rejection.

Why it matters: This ensures due process is followed and applicants aren’t left in the dark about why their application was rejected.

Senior Officers to Ensure Accountability

The CBIC has asked Principal Chief Commissioners and Chief Commissioners to:

  • Regularly check the registration processing performance in their jurisdiction.

  • Ensure enough manpower is assigned to handle applications.

  • Initiate disciplinary action against officers who violate these new instructions.

Also, states and zones are encouraged to issue localized trade notices so that businesses know exactly what documents they need based on state-level customs or formats.

Why it matters: Supervision from the top ensures that these new rules aren’t just on paper but are actually followed on the ground.

Final Thoughts: A Step Toward Trust and Transparency

These new instructions are a clear sign that the government is serious about:

  • Making it easier for businesses to come into the GST system

  • Preventing fraud by weeding out bogus firms

  • Bringing discipline and consistency into how tax officers handle registration

For business owners, consultants, and CA firms, this is a big relief. It creates a transparent framework and eliminates a lot of past confusion and harassment.

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