Standard Operating Procedure (SOP) for verification of taxpayers granted deemed registration

Last updated: 28 November 2020

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This notification introduces a Standard Operating Procedure (SOP) for the verification of taxpayers who have been granted deemed GST registration. This applies to registrations where Aadhaar authentication was not opted for or failed, and the registration was granted automatically after 21 days. The SOP mandates post-registration physical verification of business premises and requires scrutiny of financial documents to ensure the authenticity of these businesses.

Instruction No. 4/3/2020-GST CBEC-20/13/06/2020-GST Government of India Ministry of Finance Department of Revenue Central Board of Indirect Taxes and Customs GST Policy Wing **** New Delhi, Dated the, 27thNovember, 2020 To, The Principal Chief Commissioners/Chief Commissioners/Prin

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FAQ :

A deemed registration is granted when an applicant has not opted for Aadhaar authentication or has failed it, and the proper officer has not issued any notice within 21 days of the application.

Verification is necessary to ascertain that taxpayers granted deemed registration have genuine businesses or intend to carry out business activities.

The SOP involves mandatory post-registration physical verification of the business premises and preliminary financial verification by scrutinising documents like ITRs and bank statements.

Details checked include installation of capital goods (if applicable), electricity connections and bills, size of premises, ownership or lease documents, employee records, Aadhaar and PAN of key individuals, and bank KYC.

Applicants may need to provide ITRs, details of bank accounts linked to the registration, quantum of capital employed (own funds and loans), audited balance sheets, and loan proposals.

All verifications must be completed within three weeks of the instructions being issued.