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Cancellation & Revocation of GST Registration: Important Procedures


Cancellation of GST Registration

CANCELLATION & REVOCATION OF GST REGISTRATION: The GST Registration is mandatory to every person/business with an annual turnover of 20 lakhs or more and the person making inter-state transaction of taxable goods/service however the person who is already registered can opt for GST Cancellation also in given scenarios:

  • If the annual turnover of the business is falls under threshold limit.
  • If the person discontinued the business.
  • If there is a changes in constitution of business.
  • If the person has transferred or merged the business with any other organization.

For the cancellation taxpayer have to submit FORM GST REG-29 through the GST portal. When the application of cancellation is approved by proper officer then registered person has to file final return GSTR- 10 on GST portal within three months of date of cancellation or date of order of cancellation by the officer whichever is later.

The application of cancellation of GST registration of registered person can be apply by legal heirs in case registered person is deceased. In FORM GST REG 16.

The Registration of taxpayers can be cancelled by an authorized officer also in given scenarios:

  • If a taxpayer failed to file GST Return for more than six consecutive months.
  • If officer observed any major differences in values of outward supplies reported in GSTR3B vs declared in GSTR1 or ITC value declared in GSTR3B vs value available in GSTR 2A/GSTR 2B
  • If the taxpayer avails input tax credit in violation of section 16 of the Act.
  • If the registered person issues invoices without any supply of goods/service.
  • If the registered person does not conduct business from the place as declare during registration.

Before cancellation of such gst registration the authorized officer intimate the concerned person by sending show cause notice FORM GST REG-17. If the person disagree with the same then person is required to reply within 7 days of issuance of notice in FORM GST REG-18. If the officer finds the reply satisfactory he can drop the proceeding and pass an order in form GSTREG-20.otherwise authorized officer will issue an order in Form GST REG-19 within 30 days from the date of reply filed by concerned person against show cause notice.

Revocation of GST Registration

In case the registration of registered person get cancelled by authorised officer then the taxpayer can apply for revocation of application within thirty days from the date of cancellation order. Through FORM GST REG-21 on the GST portal. In view of the notification 34/2021- central dated 29th august 2021, where the due date of filing of application for revocation of cancellation of registration falls between 1st March 2020 to 31st August 2021, the time limit for filing of application for revocation is extended to 30th September 2021.

If the officer is satisfied with the reason provided by the taxpayer then registered officer is required to pass an order of revocation in FORM GST REG-22. However if the reason submitted by taxpayer is found not satisfactory to the authorised officer then he will reject the application of revocation and pass the order in FORM GST REG-05.

Before rejecting the application officer will issue show cause notice in FORM GST REG -23 for the applicant to reply with why the application should not be rejected. the applicant have 7 days’ time to reply in FORM GST REG -24 from the date of such show cause notice. The officer have 30 days’ time to take decision from the date of receipt of clarification from the applicant in FORM GST REG-24.

The application of revocation is necessary because if the taxpayers continues to trade goods and supply with GST registration. It shall be considered as an offence under GST law and taxpayer shall be liable to heavy penalties and is shall be deemed to be a deficiency within the meaning of rule 9(2) of the central goods and service tax rules 2017 and can be considered as a ground for rejection of the application for fresh registration.

In recent times, GST officials have come across application of fresh registration of businesses, who had their registration cancelled by an officer, due to non-compliance of the statutory provisions.

To avoid such circumstances, the officials have clarified the consequence the taxpayer has to face in case of non-revocation of cancelled registration in circular no.95/14/2019-GST dated March 28th, 2019,

In cases where an already registered taxpayer applies for another registration within the same state, the authorized officer is required to analyses whether existing registration continues or is being cancelled due to non-compliances of statutory provisions.

• If the registration is cancelled, further analysis shall commence on whether the registration is cancelled on account of violation of provisions of section 29 (2) (b) [composition dealer has not furnished returns for 3 consecutive tax period] or section 29 (2) (c) [registered taxpayer has not furnished returns for a continuous period of 6 months];

• And whether the taxpayer has filed the application for revocation of cancellation of registration.

An authorized officer has power to reject an application of fresh registration, if upon analysis, the applicant is found to have a registration cancelled by an officer, and the applicant has not filed for the revocation of the same.

As per Vide circular no. 95/14/2019-GST dated March 28th, 2019,

Note: Application for revocation cannot be filed if the registration has been cancelled because of the failure to file returns. Such returns must be furnished first, along with payment of all dues amounts of tax, interest & penalty.

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