Quick Summary
The GST Council, in its December 21, 2024, meeting, granted 'in-principle' approval to a new mechanism aimed at simplifying the registration process for new and small businesses. The proposed framework seeks to grant GST registrations within three working days, streamlining the process and addressing key concerns raised by taxpayers and authorities alike. Dual Objectives of the New Framework According to officials, the mechanism targets two pressing issues. Firstly, it aims to eliminate unne
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FAQ :
The new mechanism aims to simplify GST registration for new and small businesses, granting approvals within three working days, reducing unnecessary queries, and preventing fraudulent use of the system.
Under the new framework, eligible small businesses can expect to receive their GST registration within three working days of submitting a successful application.
No, for the majority of new applicants (around 98%) who have low Input Tax Credit (ITC) claims, the simplified process will eliminate the need for physical verification of business premises or visits to tax offices.
The mechanism targets fraudulent ITC claims by implementing a tiered structure and potentially capping ITC claims for certain business categories, allowing tax officials to focus on high-risk applications.
The four tiers include: Tier 1 for new/small businesses (Aadhaar-based, faster registration, ITC capped), Tier 2 for deemed trusted entities (e.g., government bodies), Tier 3 for existing businesses exceeding ITC limits (requiring fees/deposits), and Tier 4 for changing ITC limits.
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