Delay in Approval of Registration Application

GST was introduced with a motive of One Nation One Tax. This new indirect tax regime was pioneered to ease compliance burden and promote ease of doing business as many of the tasks like registration, return filing etc., were based on either real time basis or are time bound processes. The very first step i.e., registration under section 9(5), was introduced with a time limit of 3 working days. This was for the proper officer to examine the authenticity of the application thus blocking delay and corruption. And if the proper officer fails to complete the verification within 3 working days then the application will be deemed approved by the GSTN. This was working well before lockdown but due to COVID-19 disturbance and quarantine of 3 months, the applications were neither approved on time nor they were deemed approved thus hindering the starting of various businesses.

But the reason of the debate is two notification released by the CBIC

Notification no.35/2020 on 3^rd April, 2020 to extend various for compliances which fall due from 20^th March, 2020 to 29^th June, 2020. Under this notification all the orders or issuance of any notice, intimation, notification, sanction or approval or such other action, by whatever name called have been given extension. But the approvals under section 25 and rule 9 have been excluded i.e., the procedure and approval of registration application have been kept aside. Whereas practically the story is all over a different one. The GSTN is not allowing deemed approvals after 3 working days. Hence, causing confusion in the minds of the applicants.

Another notification no. 16/2020 on 23^rd March, 2020 which entails about the authentication of Aadhar. Accordingly, if a person fails to undergo Aadhar authentication, then the approval will be given only after physical verification of the principle place of business by the proper officer, which should not be less than 60 working days. Now, if the proper officer fails to do so under the given time boundation then the deemed approval will be given after 60 working days.

When CBIC was asked about the clarification on the following issue then the board said now the system will follow the limit of 60 working days and mere quoting of Aadhar no is not enough for Aadhar validation. As for now the facility of Aadhar authentication is not available on the portal, therefore the limit of 60 days could not be invoked. Also, how officer are doing validation without even visiting the principle place of business. This certainly brings into the analysis that limit of 3 working days is still valid.

Another letter issued on 17^th July, 2020 stating that to avoid the possible misuse of the deeming provisions issued during the COVID lockdown, it was decided that the deemed approval facility will be restricted from 25^th march,2020, wherever the central/sate offices are closed or are functioning with skeletal staff. Thus the deemed approval deadline that could be drawn from the analysis is