Frequently Asked Questions

What is goods and service tax?

Goods and service tax is a comprehensive tax on the supply of goods and services.

How does GST work?

GST works by consolidating various indirect taxes into a single tax, simplifying the tax structure.

Who needs to register for GST?

Businesses with a turnover above a specified threshold must register for GST to comply with tax regulations.

What are the benefits of GST?

GST promotes transparency, reduces tax evasion, and simplifies the tax compliance process for businesses.

Is GST applicable to all goods?

GST applies to most goods and services, with some exceptions for specific items.

How to file GST returns?

GST returns can be filed online through the official GST portal, ensuring timely compliance with tax obligations.

GSTN Introduces Simplified GST Registration Scheme under Rule 14A

1. Introduction

The Goods and Services Tax Network (GSTN) has issued an advisory introducing a Simplified Registration Scheme under Rule 14A of the CGST Rules, 2017. This new framework became effective from 1st November 2025 and is aimed at easing the compliance burden for small taxpayers.

2. Objective of Rule 14A

Rule 14A seeks to encourage voluntary compliance by small businesses and service providers whose tax liability is minimal. It provides a streamlined and automated registration process, ensuring faster approval and reduced documentation.

3. Eligibility Criteria

Only small taxpayers meeting the following condition can opt for registration under Rule 14A:

• The total output tax liability on the supply of goods or services, or both, made to registered persons must not exceed ₹2.5 lakh in a month.

• The taxpayer must not hold more than one registration per State or Union Territory under the same Permanent Account Number (PAN).

4. Key Features of the Scheme

• Automatic Electronic Registration – Eligible taxpayers will receive auto-approved GST registration within three days from the date of submission of FORM GST REG-01.

• Aadhaar Authentication – Mandatory Aadhaar verification is required for:

1. The primary Authorised Signatory, and

   • At least one Promoter or Partner of the entity.

• Single Registration Restriction – Multiple registrations in the same State or Union Territory under one PAN are not allowed.

• Application Procedure – Applicants must select ‘Yes’ for Rule 14A in FORM GST REG-01 while applying for registration.

5. Procedure for Withdrawal of Registration

Taxpayers opting to withdraw registration under Rule 14A must adhere to the following conditions:

• Return Filing Requirement – All pending returns from the date of registration till withdrawal must be filed.

• Minimum Filing Period:

1. If the withdrawal occurs before 1st April 2026, at least three months’ returns are required.

   • If the withdrawal occurs on or after 1st April 2026, at least one tax period’s return must be filed.

• Restriction on Withdrawal – Withdrawal will not be permitted if any of the following are pending:

1. Application for amendment of registration,

   • Application for cancellation, or

   • Cancellation proceedings initiated by the department.

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The primary disadvantages of the new GST Rule 14A for simplified registration revolve around its strict eligibility cap, operational complexities, and potential for sudden cancellation.

Key disadvantages include:-

• Strict Liability Cap: The scheme has a maximum monthly B2B output tax liability limit of ₹2.5 lakh, not turnover. Even a single high-value invoice or seasonal spike can make a taxpayer ineligible, requiring an immediate transition to the normal scheme.

• B2B Focus & Complexity for Mixed Businesses: The threshold only considers B2B supplies (sales to registered persons). This makes it unsuitable for businesses with significant or mixed B2C (business-to-consumer) and B2B sales, leading to potential confusion over eligibility.

• Difficult Withdrawal Process: Exiting the scheme upon exceeding the limit is not automatic and requires filing a formal application (FORM GST REG-32) which is subject to officer approval (FORM REG-33), and potentially physical verification. There is no statutory timeline for the officer to approve the withdrawal, which can leave a business in "legal limbo".

• Risk of Immediate Cancellation: Failure to monitor the limit and file for withdrawal immediately upon exceeding it constitutes a contravention of the rules, which can lead to suo motu (on its own motion) registration cancellation under Section 29, often without a remedial window.

• Collateral Damage to Customers: If a business's registration is cancelled due to non-compliance with Rule 14A conditions, its registered customers may lose their ability to claim Input Tax Credit (ITC) on purchases made from that supplier, damaging business relationships.

• No Multiple Registrations in the Same State: A business operating under Rule 14A cannot obtain another GST registration in the same state under the same PAN, limiting expansion flexibility.

• No Portal Alerts: The GST portal does not provide automated warnings as a taxpayer approaches the ₹2.5 lakh tax limit, requiring constant self-monitoring by the small business owner.

• Mandatory Aadhaar Authentication: Aadhaar authentication is compulsory for registration under Rule 14A, which may be a barrier for those with name mismatches or who are digitally illiterate.

Due to these factors, tax experts often advise businesses with high growth potential or complex supply chains to opt for the normal registration route from the beginning to avoid future disruptions and compliance risks.