All About SOP Before Facilitation & Registration Under GST

Short Summary About SOP

The standard operating procedure is a mechanism to create a preliminary direction towards any compliance and to complete the solution with the maintenance of certain rules within the process. The SOP is a general rule to be followed while every process is initiated. Overall the SOP is a major term to be taken care of every step for a format.

Latest Update in SOP

11th March 2022

• The Delhi GST department’s new circular about SOP for implementation extension of the time limit under the provision to apply for revocation of registration cancellation u/s 30. Read Circular

Hon’ble High Court of Gujarat Order

As per the order of Hon’ble Gujarat HC in Writ Petition No. 17819/2021 dated 08/12/2021, Gujarat SGST was directed to provide an opportunity of hearing the CAAS representative on difficulties in new GST registration within 6 weeks. Upon request for SOP for GST registration, CAAS has immediately sent the complete SOP below:

Surat Chartered Accountants Association

Instead of following any other procedure for granting new GST registration, all field formations have to follow the standard operating procedure (SOP) in letter and spirit while endowing new GST registration and in the first 6 months of registration in order to achieve the diverse goals of due diligence, including counterfeit billing.

Before Facilitation

It is observed that there is a lack of basic knowledge of the law with respect to the existing laws which are applicable and which are applied in the GST registration. Below-mentioned is the steps to be followed by various jurisdictional commissioners before the staffing and delegation of work relating to registration of GST:

1. All staff hiring processes have to be made in a separate designated registration unit. The said employees will be responsible only for the registration works and will not be assigned any other work
2. All Jurisdictional Commissioners will have to educate and provide proper training to the appropriate officers and their staff who are already engaged in the registration work or are proposed to be engaged in it. The education and training will focus on the key areas mentioned below which are limited to such provisions of the Act, circulars, notifications, instructions which have a direct bearing on the registration aspects:
   • Corporate laws including Companies Act 2013, Limited Liability Partnership Act, 2008, Partnership Act, 1932;
   • The Co-operative Societies Act, 1912 and the Multi-State Co-operative Societies Act, 2002;
   • Transfer of Immovable Property Act, 1882;
   • Gujarat Shop and Establishment Act, 2019;
   • Notaries Act, 1952;
   • Up-to-date CGST Act, 2017
3. The education mentioned in point 1 above should be done on an ongoing basis and without any compromise due to leave or other departmental assignments or works
4. Adequate staffing as required will be done by the proper officer. If there is a requirement for additional staffing, it may be completed according to the extant departmental recruitment guidelines
5. The Joint Commissioner will periodically monitor the rejection applications to check the rejection ratio of the officers and on a weekly basis check which officer is substantially rejecting 10% or more of the applications. The reasons for the same must be recorded in writing

Before GST Registration

The Field formations while receiving of application for new GST registration will have to follow the below-mentioned steps:

1. After receiving a system validated application for new GST registration in Form GST REG-01 from the common portal, the proper officer will have to first ascertain whether the application is complete in all respects. For the same, officers can follow the below steps:
   • (A) – In a case where Aadhaar authentication has been completed, the Proper authority:
     • It has to be ensured that all compulsory documents are authentic and understandable.
     • Will have to ensure that valid documents are uploaded.
   • (B) – If the Aadhaar authentication is not completed, then other than the steps cited in (a) above:
     • have to ensure that the identity details mentioned in the application match with the alternate document for identification ie. PAN, Passport, Voter ID Card, or Driving License.
   • (C) – Apart from Aadhar authentication or otherwise, the below-mentioned documents will be also enough for the purpose of GST registration and no further document will be sought from the applicant by the Proper Officer.
     1. As Proof of Identity: PAN Card of the Applicant.
     2. PAN of the entity as proof of identity in case of non-individuals
     3. For the purpose of proof of identity PAN card of the applicant’s authorized persons can be also used.
     4. One from the Passport / Voter ID Card or Driving License as proof of identity as well as proof of address;
     5. If the premise is owned, one document from Electricity Bills /Municipal Tax bill / Telephone Bills /Municipal Tax Receipt / Gas Bills / Index Copy (latest or Old);
     6. A self-attested copy of the rent agreement along with a self-attested copy of the items specified in (v) above relating to the owner of the premises is required if the premises are on rent.
     7. If the premises are owned by the applicant’s family member, a self-declared consent letter from the owner of the premises, along with a self-attested copy of the items referred to in (v) above relating to the owner of the premises.
   • (D) – The proper officer should note that compliance with Aadhaar authentication only ensures the applicant’s identity, it can’t verify the physical location or applicant’s address. For both physical verification is required at a later stage after granting registration of GST.
2. All the steps engraved in para 1(a) and 1(b) above are deemed to be valid compliance with rule 9(1) for registration purposes and documents should be in order, and no additional documents will be required. In this case, applications will obtain registration under Rule 9(1) and a Certificate of Registration shall be issued under Rule 10:
   • With Aadhar Authentication – immediately or same day
   • In Other Cases – Maximum 2 working days
3. If the documents of applicants failed the test noted in Para 1(a) and 1(b), the Proper Officer can issue a notice in REG-03 form under GST instantly on the same day of receiving the registration request
4. While issuing queries according to REG-03, the proper officer has to keep in mind the following points:
   • Not every applicant is registering to do the business of fraudulent billing.
   • Aggressive inquiries should not be made about the business model, the experience of the promoters/partners/directors/owners, viability, and legitimacy of the business. Providing GST registration is the arduous duty of the proper officer to ensure proper duty, levy, and retrieval of taxes in the Government exchequer;
   • The REG-03 notice’s manners, tone, and language must be nice, understandable, helpful, and not hostile;
   • Unsolicited and unrelated documents should not be sought with the notice from the applicant;
   • The notarization requirement has been eliminated from the process with vide letter No.D.O. No. K- 11022/67/2012-AR dated 17 July 2014 by the Department of Administrative Reforms and Public Grievances under the Ministry of Personnel, Public Grievances and Pensions, which has initiated the process of abolishing the affidavit/certification and notarization. Instead, the proper officer should insist on the documents on the basis of self-attestation from the applicant.
   • No additional proof of business (existing or proposed) will be sought from the applicant;
   • Unwarranted or Unsolicited information relating to authorized representatives should not be sought;
   • All REG-03 need to be duly reasoned and notice shall be not given if it contains proper and detailed reasons capable of being communicated effectively to a layman of the nature of the deficiency.
5. However, if the applicant fails to give a satisfactory response using GST REG-04 to the queries raised by the proper officer in GST REG-03, the proper officer is empowered to reject the registration application stating complete details, descriptions along with sections of CGST Act, 2017, under which there is a contravention. Without a rejection of the application in the GSTN Common Portal, the applicant will be informed about the rejection in GST REG-05, duly prepared in a word processing document with proper outward numbering. Such an application should not be rejected for a period of 60 days from the date of issue of an order under GST REG-05 to the applicant, or if the applicant prefers to appeal against the said order till the disposal of the appeal, whichever will come later. This step is taken to make sure that rejected applications remain in the system even if they have been legally rejected, as applications once rejected can’t be edited if the appellate authority decides in favor of them.
6. The entire process involved in the registration will be online without any interaction of the applicant or his authorized representative with the proper officer and will be completed within a period of 2 working days to verify the norms set by CBIC for providing GST registration
7. If it is found that the proper officer has approached the applicant before granting/denial of GST registration, then such proper officer shall be entitled to strict punitive action

After Registration Under GST

The below-mentioned follow-up steps and procedures will be followed by various field formations after granting GST registration:

1. The proper officer shall visit the premises of the applicant who has been granted GST registration within 15 days from the date of grant of GST registration. Site visits are important to ensure that the applicant conducts business from the stated place of business. In the case the applicant is not doing business at the stated place of business, there can be a possibility of misappropriation of GST registration, Physical verification within 15 days in such a case leaves a lesser window for the applicant wishing to misuse GST registration to transfer the GST ITC with GST 1 to his recipients of goods or services, If the registration of such an applicant has been cancelled by the informed proper officer under rule 21(a), who is the business physically visited the site;
2. Delay in the said period of completion of GST registration will be result in the punishment with penal departmental action;
3. After the grant of the GST registration, the Proper Officer will make ledger scrutiny online, on the staggered basis of the frequency given in Step 2 and in the manner given in Step 3, verify and ensure the genuineness of transactions being carried out by the newly registered applicant under Electronic Credit Ledger and in ITC.
4. The proper officer shall conduct the ledger scrutiny at the below-mentioned frequency:

   • Month	Frequency
     1st Month	On Weekly basis
     2nd and 3rd Month	On Fortnightly basis
     4th and 6th Month	On Monthly basis

5. The officer shall:
   • Investigate into the Electronic Credit Ledger: To ensure that the transactions made represent gradual and organic growth and do not increase in number suddenly
   • Check the Electronic Cash Ledger
   • Check which one is non-invasive without contacting the registered person asking for an aggressive or alert questionnaire.
6. Periodic monitoring of questions prepared by proper officers should be done by Joint Commissioners on weekly basis to verify officer-wise unwanted questions arising in the following categories and fix accountability for generating wrong questions:
   • Documents are not legible or visible
   • Feasibility of registration in residential premises;