Revocation of cancellation of GST registration – big relief to taxpayers

1. GST Council vide Point 1(b) of press release dated 14 March 2020 has Indicated that where registrations have been cancelled till 14.03.2020, application for revocation of cancellation of registration can be filled up to 30.06.2020 (extension of the period of application as a one-time measure to facilitate those who want to conduct business).

2. It is a big relief for taxpayers who were feeling helpless as their registration got cancelled by the proper officer. As per sec 29(2) of the CGST Act 2017, the proper officer may cancel the registration of a taxable person from such date, including any retrospective date, as he may deem fit in all the following cases:-

(a) the registered taxable person has contravened such provisions of the Act or the rules made thereunder as may be prescribed; or

(b) a person paying tax under section 10 [composition scheme] has not furnished returns for three consecutive tax periods; or

(c) any taxable person, other than a person specified in clause (b), has not furnished returns for a continuous period of six months; or

(d) any person who has taken voluntary registration under section 25(3) has not commenced business within six months from the date of registration; or

(e) registration has been obtained by means of fraud, willful misstatement or suppression of facts [section 29(2) of CGST and SGST Act].

3. These taxpayers have not filed returns as there was no business and they did not even realize that their registration got canceled. Now they want to conduct business but unable to do so as the time limit to apply for revocation is 30 days from cancellation only. (As per section 30(1) & Rule 23(1) of CGST Act/ Rule, Any registered taxable person, whose registration is canceled by the proper officer on his motion, may apply to such officer for revocation of cancellation of the registration in form GST REG-21 within thirty days from the date of service of the cancellation order.)

4. In GST Council meeting on 14^th March 2020, decision has been taken to provide a one-time facility to apply for revocation by 30^th June 2020. However, application for revocation cannot be filed if the registration has been cancelled for the failure of the taxable person to furnish returns, unless such returns are filed and any amount due as a tax, in terms of such returns has been paid along with any amount payable towards interest, penalties and late fee payable in respect of the said returns -first proviso to Rule 23(1) of CGST Rules, 2017 [renumbered w.e.f. 23-4-2019].

5. For Example, Mr. A’s registration got cancelled on 01^st Jul 2018 as a result of the non-filing of returns, he can apply for revocation till 30^th June 2020 after furnishing all the returns.

6. The proper officer can revoke cancellation, for reasons to be recorded in writing, by an order in form GST REG-22 within thirty days from the date of receipt of the application and communicate the same to the applicant – Rule 23(2)(a) of CGST Rules, 2017. In the example given above, the proper officer can revoke cancellation by 30^th July 2020 ( within 30 days from the date of receipt of the application)

7. Wherever returns could not be filed due to cancellation of registration, all the returns due for the period ( from the date of cancellation to date of revocation order) needs to be furnished within 30 days from the date of revocation order. -second proviso to Rule 23(1) of CGST Rules, 2017 inserted w.e.f. 23-4-2019. Example:- Mr. A needs to furnish all his returns from 01^st July 2018 to 30^th July by 30^th Aug 2020.

8. In case registration got cancelled with retrospective effect ( w.e.f 01 Jan 2018 ), all returns due for the period from the effective date of cancellation till the date of revocation order shall be furnished within 30 days from date of revocation .third proviso to Rule 23(1) of CGST Rules, 2017 inserted w.e.f. 23-4-2019. Example : Return for the period 01^st Jan 2018 to 30^st July shall be furnished by 30^th Aug 2020)

The author can be approached at caanitabhadra@gmail.com