Overview on Simplified GST Registration Process

Simplified GST Registration Scheme for small and low-risk businesses in India,

A new optional scheme approved by the GST Council on 3 September 2025 to simplify GST registration for “small and low-risk” applicants. The idea is to grant GST registration automatically by the system (with minimal manual checks) for eligible applicants, instead of long/complex verification. Automatic Registration in 3 Working Days  in Simplified GST Registration Process.

Why Introduced Simplified GST Registration Scheme?

• Earlier simplified system was misused : made tighter. Now being reintroduced after feedback from small traders & operators. Part of Next-Gen GST Reforms:
  • GST slabs reduced to 5% (merit), 18% (standard), 40% (sin/luxury).
  • 99% of goods from 12% slab moved to 5%.
  • Aim: Ease of doing business + wider formalisation.

Who Is Eligible for Simplified GST Registration Process

This Applicants can get automatic GST registration within three working days if they meet either of the following conditions & Applicants must satisfy the following:

Eligibility Condition	Details
Low-risk applicant	Those applicants whom the system considers “low risk.” (Risk-based checks may still apply later). Based on risk parameters and data analysis, the applicant is classified as low risk.
Estimated Output Tax Liability	Applicants who determine that their output tax liability from supplies to registered persons will not exceed INR 2.5 lakh per month (this is inclusive of CGST + SGST/UTGST + IGST)
Voluntary Opt-in / Opt-out	It is optional. Applicants can choose to opt into this simplified scheme or remain under normal registration. Also, if their business grows (exceeding thresholds or higher risk), they can switch to the normal registration process. The applicant declares that they will not claim Input Tax Credit (ITC) exceeding INR 2.5 lakh per month and opts into the scheme

Features of the Simplified GST Registration Scheme

• Automated approval: No manual verification unless flagged.
• Voluntary opt-in & withdrawal: You can choose the scheme or move back to normal registration.
• Covers ~96% of new GST applicants (as per Ministry of Finance estimates).

When It Becomes Effective  : The scheme is to be operationalised from 1 November 2025. Key notifications / legal amendments are expected prior to this date so systems are ready.

Simplified GST Registration Scheme – Eligibility Checklist

Step 1: Business Basics : Do you need GST registration? : Turnover above ₹40 lakh (₹20 lakh in special category states) or you supply inter-state, e-commerce, etc.

Step 2: Risk Profile : Is your business considered low-risk?
(e.g. no history of fake invoicing, shell activities, high-risk categories, or adverse reports)

Step 3: Output Tax Liability : Can you reasonably estimate that your monthly GST output tax liability (CGST+SGST+IGST) will not exceed ₹2.5 lakh? For Example: If your outward taxable supply in a month = ₹20 lakh at 12% : tax liability = ₹2.4 lakh within limit.

Step 4: Documentation Readiness : Do you have standard documents ready? i.e. PAN, Aadhaar, Proof of business constitution (Partnership deed, ROC, etc.), Proof of principal place of business, Bank details.

Step 5: Willingness to Opt In : Do you prefer fast, automated approval (within 3 working days) over normal scrutiny? Are you okay with the fact that if your liability rises above ₹2.5 lakh/month, you may need to shift back to regular registration?

If all boxes ticked: You qualify to apply under the Simplified GST Registration Scheme.

If “No” to Step 2 or Step 3: You must go for normal GST registration.

Remember: This scheme only simplifies registration. You must still file GST returns, pay taxes, and maintain records as usual.

Withdrawal from the Scheme – Simplified GST Registration Process

If the applicant later wants to exit the simplified scheme, a process similar to the existing registration procedure will be followed.This process will also be based on risk parameters, but will consider the applicant’s history as a registered person.

What is Impact of Simplified GST Registration Process- What Benefits It Provides:

• Faster Registration: Registration will be granted on an automated basis within 3 working days from the date of applying.
• Reduced Compliance Burden: As this is aimed at low-risk businesses, fewer manual checks initially. Less paperwork / verification delays.
• Scalability / Transition: Businesses that grow or have higher risk can transition to the usual registration mechanism.
• Helps ~96% of new applicants (i.e. most new small businesses) qualify under this simpler regime.  Around 96% of new GST applicants are expected to benefit from this simplified registration scheme.

Things to Note / Caveats

• Even under this scheme, businesses must still meet all standard GST eligibility criteria (proof of identity, place of business, etc.).
• The estimate of “output tax liability up to INR 2.5 lakh per month” is self‐assessment initially, but subject to later review / risk check. If found incorrect, normal rules may apply.
• Filing returns, paying taxes, maintaining records will still apply. This scheme only simplifies registration, not full compliance.
• It’s optional. Applicants choose whether to go with simplified registration or stay with regular. Switching may be needed if business grows.

In conclusion:

A new optional scheme for granting automated GST registration within 3 working days. Applicable to low-risk applicants and those whose output tax liability on supplies to registered persons ≤ ₹2.5 lakh/month (CGST+SGST/UTGST+IGST combined). & Operates from November 1, 2025.

Who Qualifies Simplified GST Registration Process ?

• Low-risk applicants (i.e., no adverse track record, not flagged for fake invoicing/shell activities).
• Businesses declaring self-estimated tax liability ≤ ₹2.5 lakh/month.
• Trusted categories (e.g., Public Sector Units) are also eligible.

Checklist for Small Businesses- covered under Simplified GST Registration Process

• • Is your estimated monthly GST liability ≤ ₹2.5 lakh?
  • Are you a low-risk taxpayer (clean compliance record)?
  • Do you prefer fast-track approval (3 days) instead of longer scrutiny?
  • Are you comfortable opting in voluntarily (and exiting if liability increases)?
  • If Yes : You qualify for the Simplified Registration Scheme.