In a significant set of recommendations aimed at improving Ease of Doing Business and making GST administration more taxpayer-friendly, the GST & Indirect Taxes Committee of the Institute of Chartered Accountants of India (ICAI) has submitted its “Suggestions on GST Registration & Refund Processes” for consideration of the Government. ICAI has stated that the proposals are intended to further streamline GST procedures and create a more efficient and taxpayer-friendly framework.
The comprehensive document contains 32 suggestions, covering critical procedural and GST portal-related issues faced by taxpayers—19 relating to GST registration and 13 relating to refunds. The proposals focus on automation, reduction of repetitive documentation, time-bound processing, greater transparency and elimination of technical bottlenecks in GSTN processes.
‘One PAN, One Biometric Verification’ for GST Registration
One of the important recommendations is to treat biometric Aadhaar verification as a PAN-level validation instead of a State-specific requirement. ICAI has suggested that once biometric verification has been successfully completed for one GST registration, the same should be accepted PAN-India for subsequent GST registrations linked to that PAN, thereby avoiding repeated visits and verification procedures in different States.
Seamless GST Registration Through MCA Portal
ICAI has also proposed upgrading the GST registration process linked with the MCA SPICe+ and AGILE-PRO-S forms into a fully automated Single-Window Facility. It has suggested immediate validation and generation of TRN along with real-time status updates on the MCA portal, on the lines of PAN, TAN, EPFO and ESIC registrations.
Simplified Registration for Co-working and Shared Premises
Recognising the increasing use of shared premises, co-working spaces and virtual offices, ICAI has proposed separate categories on the GST portal for such premises along with an automatically generated document checklist. Specific guidelines on acceptable proof of place of business and verification procedures for virtual and co-working offices have also been suggested.
Higher Document Upload Limit and No Cap on Number of Partners
The Institute has recommended increasing the GST registration document upload limit to up to 5 MB, providing in-portal PDF compression, multiple-file uploads and an alternative secure upload facility. It has also proposed removal of the portal restriction permitting details of only 10 partners/promoters, so that the registration particulars accurately reflect the actual constitution of an entity.
Preview Facility Before Final GST Registration Submission
To minimise inadvertent errors and avoid unnecessary rejection of applications, ICAI has suggested introduction of a “Preview” facility allowing applicants to review the complete registration application and uploaded documents before final submission and generation of ARN.
Relief from Bank Account Validation Problems under Rule 10A
ICAI has proposed a fuzzy name-matching mechanism for bank-account validation, acceptance of a proprietor’s personal account where the PAN matches, and a manual verification facility where automated validation fails. It has also recommended advance SMS/e-mail alerts before registration is suspended due to bank validation issues.
REG-03 Queries and REG-05 Rejection Orders to be Specific and Reasoned
The recommendations seek major changes in registration adjudication. ICAI has proposed that officers issuing FORM GST REG-03 should mandatorily identify the specific field or document in question and record reasons instead of issuing generic queries. Likewise, FORM GST REG-05 rejection orders should contain structured reasons explaining the query, taxpayer’s response and precise grounds for rejection. ICAI has also proposed provision for virtual or physical personal hearings at the registration stage.
Deemed GST Registration Approval Should Operate Automatically
In an important system-level reform, ICAI has recommended that the deemed approval mechanism under Rule 9(5) should be automatically enforced by the GST portal. Where the prescribed period expires without issuance of REG-03 or REG-05, FORM GST REG-06 should be auto-generated. A visible “Days Pending” counter and automatic escalation to supervisory officers have also been suggested.
Registration Applications to Have Courier-Style Activity Tracking
ICAI has suggested introduction of a Registration Activity Log, displaying stages such as application submission, ARN generation, assignment to officer, verification, query, physical verification, report upload and final approval/rejection. The measure is intended to enhance transparency and accountability in processing registration applications.
Major Refund Reforms Suggested
On the refund side, ICAI has proposed significant changes in Annexure-B, including a separate field for reclaimed ITC so that availment, reversal and subsequent re-availment of credit can be accurately reconciled with GSTR-3B.
It has further suggested a tolerance limit of up to ₹1 per tax component per invoice line item so that Annexure-B is not rejected merely because of minor rounding-off differences such as ₹0.01.
For credits received through an Input Service Distributor (ISD), ICAI has recommended that Annexure-B should permit IGST, CGST and SGST/UTGST to be reported simultaneously against a single ISD document, in line with the statutory ISD mechanism.
Refund Statements Should be Auto-Populated
To substantially reduce reconciliation work, ICAI has proposed that refund statements should be auto-populated from GSTR-1, GSTR-2B and ICEGATE, with taxpayers required only to review or supplement information rather than re-enter data already available with the system. Row-wise specific error reports and increased document-upload limits have also been recommended.
Wrong Refund Category Should Not Defeat Genuine Claim
Where an eligible taxpayer inadvertently selects an incorrect refund category, ICAI has proposed functionality enabling the proper officer to transfer the application to the appropriate refund category, instead of forcing withdrawal and re-filing, which may expose taxpayers to limitation-related disputes.
Portal Should Recognise Correct ‘Relevant Date’ for Two-Year Refund Limitation
ICAI has recommended replacing the GST portal’s rigid two-year hard block with a soft validation mechanism, enabling taxpayers to specify the applicable statutory “relevant date” and submit supporting documents. It has also sought automatic adjustment of limitation periods where an earlier refund application had resulted in a deficiency memo in FORM GST RFD-03.
PFMS Refund Failure Status to be Visible to Taxpayers
For refund payments failing because of bank/PFMS validation issues, ICAI has suggested validating the selected bank account before ARN generation and displaying real-time status such as “Payment initiated / Credited / Failed — reason”, along with an option to select another validated account and re-trigger payment.
No Withholding of Sanctioned Refund Without FORM GST RFD-07
ICAI has recommended that a sanctioned refund should be withheld only through a system-generated FORM GST RFD-07 Part A, clearly recording the legal provision and underlying proceeding. It has also proposed automatic release of withheld refunds when the related proceeding is closed.
Interest on Delayed GST Refunds Should be Automatically Paid
One of the key taxpayer-centric recommendations is that interest under Section 56 should be auto-computed by the GST portal while generating FORM GST RFD-05, instead of requiring taxpayers to file a separate claim. ICAI has referred to the statutory rates of 6% for delayed refunds and 9% in specified cases involving appellate or court orders, subject to the applicable statutory conditions.
Automatic Refund of Electronic Cash Ledger Balance
For straightforward categories such as excess balance in the Electronic Cash Ledger, ICAI has proposed auto-sanction of refund where no outstanding demand exists, with FORM GST RFD-05 generated within seven days without officer intervention, subject to post-facto review.
ICAI has additionally proposed a self-service PMT-03/PMT-03A mechanism for re-credit of rejected refund amounts, availability of a DRC-01 option during refund proceedings where issues go beyond the refund claim, and creation of a separate refund category for advance deposits made by Casual Taxable Persons and Non-Resident Taxable Persons whose registration applications are rejected.
The ICAI Suggestions can be accessed at: https://a2ztaxcorp.net/wp-content/uploads/2026/10/ICAI-Suggestions-on-Registartion-and-Refund-processes.pdf
