Introduction
Revocation of GST Registration Cancellation: Any GST registration granted to a person can be cancelled for several reasons. A person registered under GST can apply for the cancellation of their GST registration. This may be done for various reasons, such as discontinuation of business operations. The GST department can also cancel a GST registration on its own accord if it finds reasons to believe that the registration is not valid or the registered person is not eligible.
During the pendency of the cancellation process, whether initiated by the registered person or the GST department, the department has the authority to suspend the GST registration for a certain period. This suspension is typically done when there are pending investigations or compliance issues.
If the GST registration is cancelled by the department (Suo-moto) and the registered person believes that the cancellation was not justified, they have the option to apply for the revocation of the cancelled GST registration. The person needs to provide valid reasons and evidence to support their request for revocation. In case of cancellation of the registration, the person has to file a final return within 3 months of the cancellation of the registration. Let us delve into the details of all these provisions one by one for the sake of a clear understanding of this revocation process and providing a well-structured response vital for a seamless handling of the GST registration revocation process.
Reasons for cancellation of registration
A GST registration can be cancelled due to any of the following reasons:
(i) A person registered under any of the existing laws, but not liable to be registered under the GST Act;
(ii) The business has been discontinued, or transferred/merged fully with another entity, or otherwise disposed-off;
(iii) There is a change in the constitution of the business;
(iv) The person has contravened any of the following provisions/rules under the GST Act;
(a) Does not conduct any business from the declared place of business; or
(b) Issues invoice or bill without supply of goods or services or both in violation of the provisions of this Act, or the rules made thereunder; or
(c) Violates the provisions of Section 171 of the Act or the Rules made thereunder; or
(d) Violates the provision of Rule 10A; or
(e) Avails input tax credit in violation of the provisions of Section 16 of the Act or the Rules made thereunder; or
(f) Furnishes the details of outward supplies in GSTR1 for one or more tax periods which is in excess of the outward supplies declared by him in his GSTR-3B for the said tax periods; or
(g) Violates the provision of Rule 86B; or
(h) A person paying tax under Composition Levy has not furnished returns for 3 consecutive tax periods; or
(i) Any registered person, other than a person paying tax under Composition Levy, has not furnished returns for a continuous period of 6 months; or
(j) Any person who has taken voluntary registration under Sub-Section (3) of Section 25 has not commenced business within 6 months from the date of registration; or
(k) Registration has been obtained by means of fraud, willful misstatement or suppression of facts.
Suspension of GST Registration
A GST registration may be suspended by the department due to any of the following reasons.
(i) In case the registration cancellation is requested by the dealer, the registration is deemed to be suspended from the date of cancellation application or the date from which cancellation is sought by the dealer, which ever is later, until the date of completion of the proceedings.
(ii) In case the proper officer has a reason to believe that the registration should be cancelled under section 29 of the act, he may suspend the registration from a date to be determined by him until the completion of the proceedings.
(iii) In case it is observed that there is a significant difference between the data furnished by the dealer in his GSTR 1 as compared to figures of opposite party or by means of any other analysis of the officer indicating contravention of the provisions of the act or rules made there under leading to cancellation of the registration, the registration can be suspended by the officer until the completion of the proceedings and a SCN shall be issued to the person in form-31.
The person whose registration has been suspended can not issue a tax invoice, or make any taxable supply or charge any tax during the period of suspension and he is not required to file any return under section 39. The person will not be granted any refund during the period of suspension. The suspension of registration shall be deemed to be revoked upon completion of the proceedings for cancellation of the registration and such revocation shall be effective from the date on which such suspension had come into effect.
Where any order having the effect of revocation of suspension of registration has been passed, the registered person has to issue a revised invoice within one month in respect of the supplies made during the period of suspension, and declare the same in the first return furnished by him after revocation of suspension of registration.
Cancellation of GST Registration
(i) A person desirous of cancellation of his registration for any reason can apply to department in form GST REG-16 within a period of 30 days from the occurrence of the event warranting the cancellation. The proper officer will cancel his registration in form GST REG-19 upon completion of the proceedings and until then the registration will remain suspended.
(ii) In case a proper officer has reasons to believe that the registration of a person should be cancelled, he shall issue a SCN to the person in form GST REG-17 warranting him to reply in form GST REG-18 within 7 working days from the service of the notice.
(iii) Where the reply to SCN is satisfactory, the proper officer will drop the proceedings and issue an order in form GST REG-20. In case, the person does not reply to SCN but files all the pending returns with paying all dues of tax, interest and penalty, the proper officer can drop the proceedings and issue an order in form GST REG-20.
(iv) The cancellation of registration shall not affect the liability of the person to pay tax and other dues or to discharge any obligations under GST Act or Rules made thereunder for any period prior to the date of cancellation whether or not such tax and other dues are determined before or after the date of cancellation.
Revocation of Cancellation
Application for revocation of cancellation of GST registration
A taxpayer whose GST registration has been cancelled by the proper officer can apply for revocation of cancellation by submitting Form GST REG-21. The application for reversal (Form GST REG-21) must be filed within 30 days of receipt of the order of the cancellation or within such period as extended by by the Additional Commissioner or the Joint Commissioner or the Commissioner, as the case may be, in exercise of the powers provided under the proviso to subsection (1) of section 30,” at the common portal, either directly or through a Facilitation Centre notified by the Commissioner. (As amended vide Notification no. 15/2021 – Central Tax dated 18.05.2021).
If the proper officer cancelled the registration due to the non-filing of returns, the taxpayer must address this issue before applying for the reversal of registration cancellation. To initiate the reversal process, the taxpayer needs to first ensure that any pending returns are filed. The taxpayer is required to clear any outstanding dues, including interest and penalties associated with the non-filing of returns.
In order to ensure uniformity in the implementation of the provisions of above rule across the field formations, the Central Government issued a Standard Operating Procedure (SOP) vide Circular No. 148/04/2021 – GST dated 18.05.2021.
Process of application for revocation of cancellation
Step 1-Log in to the GST portal and navigate to ‘Services’ > ‘Registration’ > ‘Application for revocation of GST registration cancellation.
Step 2-Enter the required information and reasons for the reversal of the cancellation of GST registration. Also, supporting documents should be attached at the required places. After updating all the details, click on the verification checkbox. Select the authorised signatory and verify.
Step 3-You can apply Form GST REG-21 either with DSC or EVC. A message will be received that the application is successfully submitted.
Notice of cancellation of the revocation application
When a taxpayer submits a revocation application using Form GST REG-21, it undergoes a thorough review by the proper officer. If the officer finds any shortcomings or reasons to reject the application, they will issue a show-cause notice in Form GST REG-23. This notice will outline the grounds for potential rejection and request the taxpayer to provide explanations for why their revocation application should not be declined. In response to this notice, the taxpayer must act promptly by submitting Form GST REG-24 within 7 working days from the date of receiving the notice. This step is crucial for addressing the concerns raised by the officer.
However, if the concerned officer is satisfied with the revocation application, they will formally document their approval. Subsequently, they will issue the revocation order in Form GST REG-22, typically within 30 days from the receipt of the taxpayer’s response in Form GST REG-21.
Giving a reply to a show-cause notice (SCN) received in Form GST REG-23
When a taxpayer receives a formal show-cause notice regarding their GST registration (Form GST REG-23), they are required to respond promptly by submitting their reply using Form GST REG-24 within 7 working days from the date of receiving the notice. The reply in Form REG-24 includes important details such as the reference numbers and dates of the notice and the original application, along with the GSTIN and reasons explaining why the taxpayer is seeking the revocation of their registration. Additionally, relevant supporting documents need to be attached for a comprehensive response.
The tax officer meticulously examines the provided reply in Form GST REG-24. If the officer is content with the response and finds it in compliance with the necessary requirements, they will proceed to issue the order for the revocation of GST registration using Form GST REG-22. This entire process usually takes place within a timeframe of 30 days from the date of receiving the response in Form GST REG-24. However, in cases where the tax officer remains dissatisfied with the reply, they retain the authority to reject the revocation application by issuing an order in Form GST REG-05.
Conclusion
It is important for businesses and individuals registered under GST to comply with the tax regulations, and they should be aware of the procedures and timelines for cancellation, suspension, and revocation of GST registration, as well as the filing of returns to avoid any penalties or legal issues. Navigating the GST registration revocation process requires diligence and timely responses from taxpayers.
Ensuring compliance with the prescribed forms and deadlines is essential to facilitate a smooth revocation procedure. Additionally, the specific rules and procedures may vary from time to time because of amendments in act and rules, so it’s essential to consult the relevant tax authorities or a tax professional for relevant and accurate information and guidance.
You may follow the Link to refer the manual in GST portal regarding “How to apply for cancellation of GST registration”-https://tutorial.gst.gov.in/userguide/registration/Cancellation_of_Registration_manual.htm
Please follow the Link to access the video by CBIC on revocation of cancellation process–https://www.youtube.com/watch?v=5ihkz9VgB0Y
You can also Like the article “e-invoicing applicability under GST” in this Link–https://anptaxcorp.com/understanding-e-invoicing-applicability-under-gst-from-1st-august-2023/
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