In a significant move to enhance ease of doing business in India, the central government has announced major reforms to the Goods and Services Tax (GST) registration process. On April 17, 2025, the Ministry of Finance issued a directive instructing GST officers to refrain from demanding superfluous documentation during registration. The aim is to reduce bureaucratic red tape and eliminate arbitrary practices that have long hampered the onboarding of new businesses, especially startups and MSMEs (Micro, Small, and Medium Enterprises).
Under the new rules, all GST registrations must now be processed within seven working days, provided there are no discrepancies in the submitted information. Previously, applicants often faced delays of up to 15–20 days, with some cases dragging on even longer due to repeated requests for additional documents or field verification visits. The delay not only impacted businesses' ability to start operations promptly but also led to losses in terms of potential revenue and customer acquisition.
The Central Board of Indirect Taxes and Customs (CBIC) has issued strict guidelines stating that only documents specifically listed in the GST registration form — such as PAN, Aadhaar, proof of business address, and bank account details — should be required. Any request for extra documents, like rental agreements, electricity bills, or income proofs, must now be pre-approved by a Deputy or Assistant Commissioner. This structural change aims to rein in officer discretion, which has often been cited in complaints of harassment and delays.
India currently has over 1.46 crore registered GST taxpayers, and the move is expected to benefit lakhs of small entrepreneurs and traders who face challenges in accessing formal systems due to bureaucratic hurdles. As per the World Bank’s "Doing Business" report, India had jumped 79 positions between 2014 and 2020, reaching 63rd place globally in 2020. However, issues in tax compliance and registration have persisted. These new reforms are part of a continuing effort to address those pain points and push the country closer to the top 50.
Simultaneously, the Finance Ministry has addressed and dismissed rumors circulating on social media and certain media outlets regarding the imposition of GST on Unified Payments Interface (UPI) transactions above ₹2,000. Clarifying the matter, the ministry emphasized that no GST is levied on peer-to-peer UPI transfers, regardless of the transaction amount. The confusion stemmed from a misinterpretation of charges related to the Merchant Discount Rate (MDR), which is applicable only to merchant payments under specific conditions, and even that is often subsidized or waived for small merchants.
Digital payments have seen exponential growth in India, with over 12 billion UPI transactions recorded in March 2025 alone, amounting to a total value of more than ₹18.3 lakh crore. UPI has become the backbone of India's digital economy, and any misinformation regarding its taxation could deter its usage, especially among small traders and consumers. The government’s clarification, therefore, serves to maintain trust and continuity in the country’s fintech ecosystem.
The new GST registration norms come as part of the broader Digital India and Ease of Doing Business 2.0 campaigns launched by the government. These initiatives aim to make regulatory compliance faster, more transparent, and less prone to misuse. CBIC officials noted that technology-enabled verifications, such as Aadhaar authentication and geo-tagged photos of business premises, have already reduced the need for physical inspections in over 70% of applications.
To ensure uniform implementation across the country, CBIC is rolling out nationwide training programs for GST officers. These will include modules on best practices, legal interpretations, and citizen-centric service delivery. The training is expected to reduce inconsistencies between jurisdictions, which has been a longstanding concern for businesses operating in multiple states.
Industry bodies like the Confederation of Indian Industry (CII) and the Federation of Indian Chambers of Commerce and Industry (FICCI) have lauded the reforms. They believe these measures will significantly cut compliance costs and reduce scope for rent-seeking behavior. According to a 2024 survey by the Indian Institute of Public Finance, nearly 64% of small businesses cited GST registration delays as one of their top five compliance issues. That figure is expected to drop considerably in the coming quarters if the reforms are effectively implemented.
In summary, the government's decision to streamline GST registration and clarify UPI tax norms represents a crucial step in India's ongoing tax reform journey. It not only enhances administrative efficiency but also strengthens the government's credibility in promoting fair and digital-first governance. For new entrepreneurs, especially in Tier 2 and Tier 3 cities, this means faster market entry, easier access to credit, and a more predictable regulatory environment. With India aiming to become a $5 trillion economy, such reforms are indispensable building blocks for inclusive and sustainable growth.