CBIC circulars: What changes with guidelines on GST registration, raising tax demands, export payments and more

The Central Board of Indirect Taxes and Customs (CBIC) issued eight circulars clarifying guidelines on export payments, goods and services tax (GST) registration, and raising of tax demands, among other decisions made at the GST Council meet in October, PTI reported.

What CBIC circular state: What changes?

Guidelines on GST registration

The board issued guidelines on GST registration on 26 October, containing a list of documents that applicants need to submit, format of the affidavits, consent letter and undertaking, and frequently asked questions (FAQs). The move reduces the requirement of tax officers seeking additional documents or clarification during the registration process.

Demand, adjudication, appeal proceedings under CGST Act

In another set of circulars, the CBIC clarified issues related to the demand, adjudication and appeal proceedings under the CGST Act. The move seeks to provide a uniform reference framework for officers engaged in quasi-judicial proceedings and to ensure consistency, transparency and uniformity in the implementation of provisions of law across field offices.

It specifies that pre-show cause notice intimation may be issued to taxpayers, wherever feasible, as it offers them a vital opportunity to clarify their position prior to formal proceedings, thereby promoting voluntary compliance and reducing the necessity of issuing a show cause notice (SCN).

The circular also laid out the structure for drafting SCNs to ensure “clarity and completeness”. SCN should contain a concise summary of the allegations against the noticees and clearly state the grounds on which they are required to explain why action, as per statutory provisions, should not be initiated against them, the circular said.

Prove taxpayer intent to evade taxes before strict ‘fraud’ demand

In its next circular, the CBIC has directed GST field officers to prove that a taxpayer intended to evade taxes, before invoking the stringent GST law provision relating to ‘fraud, wilful misstatement, or suppression of facts’ while raising tax demand.

Mandatory human oversight for AI use

The CBIC also specified mandatory human oversight while using Artificial Intelligence (AI) or other technological tools to enhance the efficiency and effectiveness in adjudication proceedings. “The information obtained through AI tools should be independently verified for accuracy before reliance or incorporation into the adjudication order...,” it said.

Recognise set-off as valid mode of settlement under FEMA

For exporters, the CBIC circular on receipt of export proceeds is equally useful, particularly recognition of set-off as a valid mode of settlement under FEMA, as per the report. Where export receivables are set off against import payables in accordance with RBI directions, the prescribed realisation condition for qualifying as export of services under the IGST Act would be regarded as fulfilled.

“This aligns the GST treatment with permitted foreign exchange settlement mechanisms and provides welcome clarity for cross-border transactions,” EY India Tax Partner Saurabh Agarwal told the news agency.

Changes to decriminalise GST law, processes

The report noted that these CBIC circulars come after the 57th GST Council meeting, chaired by Union Finance Minister Nirmala Sitharaman, which approved several changes to decriminalise the GST law and processes.

The Council has decided to scrap arrest powers of tax officers, while raising the prosecution threshold to ₹5 crore from ₹1 crore. While amendments to the GST law will require Parliament nod and only come into effect from 1 April 2027, the changes in administrative functioning are being carried out through issuance of circulars.

AMRG Global Managing Partner Rajat Mohan said the circulars mark a decisive shift from arbitrary administrative discretion to standardised, rule-based tax governance. "For businesses, the primary commercial gain lies in enhanced cash-flow predictability and reduced dispute exposure. Standardised registration timelines, clear pre-deposit refund mechanics on remand, and uniform ISD norms significantly lower compliance friction. However, the true test of this reform package will depend on field-level execution, particularly ensuring that adjudicating officers strictly adhere to speaking-order mandates rather than issuing mechanical demand summaries," Mohan said.

“The real test will now be field-level implementation, because the success of the next phase of GST reform will ultimately be measured by taxpayer experience, not merely by the number of legislative or procedural changes,” felt Manoj Mishra Partner and Tax Controversy Management Leader, Grant Thornton Bharat.