While the cause of delay wasn’t clear even to individual tax officials FE spoke with, a central tax official said the lack of manpower due to Covid-19 could be one the reasons, even though the number of applications drastically reduced in the last two months.
Many businesses have seen long delays in getting their GST registration approved, and have found no help on raising the issues with the authorities, sources said. Most such complaints are for applications submitted in April and May.
While the cause of delay wasn’t clear even to individual tax officials FE spoke with, a central tax official said the lack of manpower due to Covid-19 could be one the reasons, even though the number of applications drastically reduced in the last two months. For instance, at one zonal office, applications for new registrations dropped to about 90-odd from 900 in the same period a year ago.
An official from Bihar said the state’s commercial tax department has found several cases of circular trading — which involved businesses issuing fake invoices among each other to fraudulently avail input tax credit without actual supply of goods and services — with overwhelming participation from newly registered businesses. This had led to the state tax department going slow in approving new applications.
“Every business has a vested right to be registered under GST and join the national market for supply of goods and services. Unnecessary delays in approving the GST registration application signal the constrictions of doing business in India, and are also pushing taxpayers to promote a parallel economy,” Rajat Mohan, senior partner, AMRG & Associates, said.
For registering as a GST business, a taxpayer has to file an application on the GST Network portal. This application is then allotted to either central or state tax officials depending on the jurisdiction decided as per the designated formula. According to the law, officials would process the application in three working days. If no action is taken, the same is deemed to be approved in 60 days.
Several taxpayers and tax consultant told FE that application filed during the lockdown are pending and calls to the helpdesk and tweets requesting a status check have gone unanswered.