How to Reply GST Registration Notice Query?

The GST authorities often raise queries before approving a GST registration application, if they detect discrepancies in information and documents presented. They might issue notices to seek clarification or additional documents from the applicant.

As an applicant, you need to respond to those queries within the due date to avoid the cancellation of registration application. Here is how to reply to the GST registration notice for seamless approval and GST compliance.

Problems Faced in GST Registration

A proper officer looks for clarity in three aspects as follows:

● Type of GST registration

●  Documentation Issues

●  Category of GST registration application

If there are discrepancies in any of the above-mentioned details, the GST officer issues a notice to the applicant seeking additional documents, clarification, or information. The applicant needs to submit the necessary documents or information within the due date to avoid GST application rejection. Further, it is crucial for the applicant to respond within the stipulated time to avoid rejection.

Challenges in Choosing the Right Category of GST Registration

Here are the different challenges in choosing the correct GST registration category:

● Applicants might find it challenging to select the appropriate category of GST registration under ‘Reasons to Obtain the Registration’.

● As an applicant, you can apply for the composition scheme for payment of taxes at the time of GST registration application or from the beginning of the following financial year. Determining the appropriate time for application for this scheme by evaluating profitability and benefits can be challenging for regular taxpayers.

● Sole proprietorship firms might face challenges in determining the trade name. Experts recommend using the trade name for GST registration on the GST portal (unified portal) instead of the individual name of the proprietor.

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Critical Problems in Filing of GST Registration Application and Documentation

Applicants might face the following critical problems while filling GST registration application:

● Date of Commencement of Business

For a sole proprietorship firm, the date of business commencement is the date of registration of the business structure. However, for partnership firms, limited liability partnerships, private limited companies, and one-person companies the date of business commencement is the same as the date of formation of the entity.

● Date on Which Liability to Register Arises

The GST registration liability depends on exceeding the annual turnover threshold or establishment of specific types of businesses which require mandatory GST registration. This date is crucial for future invoice revisions, future reference and the last date for acquiring a GST registration number. 

Experts suggest that if you face challenges in determining the date, you should seek advice from experienced GST consultants.

● Aadhaar Authentication

Using Aadhaar authentication for GST registration can improve the pace of GST registration approval as it helps you provide the GST authorities with details seamlessly. Linking your PAN card and Aadhaar card with accurate details can further help in faster GST registration approval.

If there is a data mismatch or a mobile number not linked to your Aadhaar number, you need to complete the same within 15 days from the GST registration application date. Failure to complete the same within the stipulated time will likely result in an inspection by the proper officer.

Reply to Common Queries for GST Registration

Once you have submitted the GST registration application and the ARN (Application Reference Number) is generated, the preceding GST officer can either approve the application or raise queries pertaining to several factors like input tax credit claims in the future, address or others.

To seek further information, clarification or documents, the proper officer might issue a show cause notice within 7 days from ARN generation.

As an applicant, you need to respond to such queries within the stipulated time frame. If you are filing an application for clarification, you need to choose 'Modification in the Registration Application Filed' or 'Without Modification in the Registration Application Filed' as applicable.

How to Reply GST Registration Notices Relating to the Principal Place of Business?

Here are some of the common queries associated with the principal place of business and the suggested responses:

1. Rental Agreement Is for a Time Frame Exceeding 11 Months

In states like Tamil Nadu, if the time frame for a rental agreement exceeds 11 months, the proper officer might ask for a registered rental agreement or amendments to the existing rental agreement.

Suggested Reply:

Here are the appropriate responses:

● If it is an unregistered rental agreement for more than 1 year, you need to submit a rental agreement after registration or a fresh rental agreement with a period of less than 1 year to the Tamil Nadu registration department.

● If a rental agreement is for less than one year, but the officer claims it exceeds 11 months, the response should clarify that registration is not mandatory for agreements under one year. It is also important to include a justification specifically addressing agreements that are more than 11 months but still under one year.

2. Stamp Paper Date Is After the Rental Agreement Date

Rental agreements are developed on stamp papers. As a result, the date of a stamp paper cannot be after the date of rental agreement issuance. For instance, if the date of the rental agreement is 5th April 2025 and the stamp paper has a date like 11th April 2025, the proper officer will likely raise a query.

Suggested Reply:

As an applicant, you cannot reply to such a query. This type of query requires you to submit a fresh rental agreement or a separate plain sheet mentioning the correct date. As an alternative, you can mention the correct date on the original stamp paper with countersignatures by the tenant and owner.

3. Modifications in Rental Agreement Data

The proper officer might raise a query if there are mismatches or discrepancies in the legal owner of the property, address mismatch with the electricity bill, business owner's address mismatch, witness details are incomplete or there are queries pertaining to the principal business place.

Suggested Reply:

If witness details are missing, you need to add the father's name, address, age, email address, Aadhaar number and mobile number of the witness to the rental agreement in an additional sheet. Alternatively, you can fill in the details in the existing rental agreement.

4. Principal Place of Business is a Residential Premise

As per CGST Act, 2017, the principal place of business is the primary location to carry out business operations. This Act does not restrict the use of residential premises for business activities. However, the rental agreement needs to mention that the property has been lent out for commercial purposes.

Suggested Reply:

As an applicant, you need to specify that the rented property, to be used as the principal place of business, has been lent out for commercial purposes. In case you face challenges, it is recommended to consult a professional GST practitioner.

5. Attached Photos of the Owners:

In certain instances, the proper officer asks for photos of the proprietor in the business premises. In such a scenario, the following should be your response:

Suggested Reply:

Ensure you click photos at the entrance of the business premise with the name board, followed by photos clicked within the premise. Using a GPS camera to highlight the location and time can be more effective in such a scenario.

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How to Reply to GST Registration Notices Relating to GST Number?

Based on changes in legal provisions, notifications issued under the CGST, SGST or IGST Act, and circulars, the proper officer might raise queries pertaining to the existing GST number. You need to respond to these queries with reference to the applicable GST laws and sections.

For instance, if you have an existing GST number in a state, the proper officer might ask for the reason for the additional GST number. Here are some of the common queries of proper officers regarding GST numbers:

1. If There Is an Existing GST Number of Different Nature of Business

A proper officer might raise a query if you have an existing GST number for a different nature of business. He/she might ask you to use the same GST number and seek an explanation before approving an additional GST number.

Suggested Reply:

As an applicant, you can specify that the GST laws permit the use of additional GST numbers for different natures of business. Further, your response can be backed by a proper HSN or SAC code to request approval for an additional GST number.

2. If There Is an Existing GST Number in the Same GST Address

A GST officer might issue a notice for clarification or notice for discrepancies if you apply for an additional GST number for a different nature of business from the same address (address of existing GST number). Here is what should be your response:

Suggested Reply:

GST applicants need to mention that despite the GST address being the same, as there is a difference in the nature of business, they will maintain separate bank statements and accounts, accounting books and operate independently. Such a response is allowed under the GST regulations.

3. Cancellation of GST Registration

Your GST registration might have been cancelled earlier. Further, there might have been a Suo motto cancellation due to the late or not filing of GST returns and annual returns. There might be queries related to a private limited company or a partnership firm if the partners or directors have been earlier associated with the same.

Suggested Reply:

The proper officer will likely raise such a query through official communication, based on the regulations of the GST notices and Act. Your application for GST registration will be approved solely after you pay the outstanding taxes, file pending returns and pay a late fee, interest or penalty (if applicable). Ensure you respond to such a query after completing the necessary actions.

Conclusion

Knowing how to reply to the GST registration notice issued by a proper officer is crucial to receiving a GST registration approval. This not only ensures tax compliance but also allows you to operate your business seamlessly after mandatory GST registration.

Ensure you respond to notices by the GST officer within the prescribed time limits to avoid adverse legal actions and rejection of the GST registration application.

This further ensures seamless user services by avoiding the late filing of an application. Adhering to GST laws helps you align with future compliance needs like filing of returns, audit by tax authority and other GST regulations. Thus, GST registration in the Indian finance ecosystem is essential to facilitate fiscal compliance in the connected finance ecosystem.

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