GST registration rejection sparks concerns over procedural hurdles, says tax expert

A recent GST registration rejection involving a legal heir taking over a deceased proprietor’s business has raised concerns about procedural difficulties faced by small taxpayers, with chartered accountant Himank Singla flagging the issue and calling for clearer guidelines and a more consistent approach from authorities.

According to documents reviewed, the GST department rejected an application for registration filed after the death of a sole proprietor, citing incomplete details related to the earlier GST registration and succession documents. The order, issued on March 6, 2026, stated that the applicant had sought registration after the “unfortunate death of the proprietor,” but had not declared previous GST registration details or submitted adequate proof establishing the legal heir’s right to continue the business.

The order further noted that the applicant was required to provide supporting documents such as the death certificate of the earlier proprietor, legal heir certificate or successor certificate, will, and no-objection certificate (NOC) from other co-successors, if any, before the registration could be processed. As these documents were not found on record, the application was rejected under the provisions of the GST Act.

Speaking on the issue, CA Himank Singla said the case highlights the practical challenges faced by small businesses and professionals when dealing with procedural requirements, especially in situations involving succession after the death of a proprietor.

“This was a genuine case where the legal heir was trying to obtain GST registration to continue the business under the composition scheme. The applicant had already submitted several documents, but the registration was rejected citing additional requirements that were not clearly asked for earlier,” Singla said.

He added that such cases often become difficult because the GST portal does not always allow easy resubmission of documents once an application is rejected, forcing applicants to restart the process.

Tax professionals say that cases involving transfer of business after death of a sole proprietor often require multiple documents, including proof of succession, previous GST details and consent of other legal heirs, but the requirements are not always communicated in a uniform manner.

Experts noted that while verification is necessary to prevent misuse, delays in granting registration can affect small businesses, particularly those opting for the composition scheme, where taxpayers are expected to start paying tax from the first day of operations.

Singla said clearer instructions and better coordination between the GST portal and field officers could help reduce disputes and speed up genuine registrations, ensuring that compliant taxpayers are not forced into repeated applications due to procedural gaps.