GST Registration Suspension/Cancellation and Revocation Guide

GST cancellation may occur due to the following:

1.Cancellation Initiated by the Taxpayer

• Discontinuation or Closure of Business: If the business operations are permanently shut down or discontinued, the taxpayer can apply for cancellation of GST registration.
• Business Transfer or Merger: In cases where the business is transferred, merged, sold, leased, or disposed of, the taxpayer may choose to cancel the existing registration.
• Change in Business Structure: When the structure of the business changes, such as the conversion of a partnership firm into a company, the taxpayer must cancel the old GST registration.
• Turnover below GST Threshold: If the business’s annual turnover falls below the GST threshold (₹40 lakh for goods or ₹20 lakh for services), the taxpayer may no longer be required to maintain GST registration.
• Voluntary Cancellation: A taxpayer may also voluntarily cancel their GST registration for personal or business reasons, even if the registration is not mandatory.

2. Cancellation Enforced by GST Authorities

• Non-Compliance with GST Laws: The GST authorities may cancel the registration if a regular taxpayer fails to file returns for six consecutive months or if a composition taxpayer fails to file returns for three consecutive months.
• Fraudulent GST Registration: If the registration was obtained through fraud, misstatement, or suppression of facts, the GST authorities can revoke the registration.
• Violation of GST Rules or Act: Significant violations of GST provisions and repeated non-compliance with GST laws may result in the cancellation of the registration.
• Engaging in Unauthorized Activities: If the taxpayer conducts unauthorized or fraudulent activities, such as issuing fake invoices, the authorities may cancel the registration.
• Non-Commencement of Business: If the taxpayer fails to commence operations within the specified timeframe after registration, the GST authorities may cancel the registration.
• Wrongful Claim of Input Tax Credit (ITC): If the taxpayer wrongfully avails or utilizes ITC without receiving the goods or services, the authorities may revoke the GST registration.

Revocation of GST Registration Cancellation:

GST revocation refers to the process of reversing the cancellation of a Goods and Services Tax (GST) registration. When a taxpayer’s registration is cancelled by the tax authorities—they can apply for revocation to restore their GSTIN and resume business operations. The purpose of revocation is to give taxpayers an opportunity to rectify compliance issues or address the reasons that led to the cancellation. Through GST revocation, businesses can correct discrepancies, update registration details, and reinstate their obligations under GST law. This process ensures that taxpayers can continue operating legally and remain in compliance with GST regulations.

Can Voluntarily Cancelled GST Registration be reactivated?

No, voluntarily cancelled GST registrations cannot be reactivated. Once a business voluntarily cancels its GST registration, the cancellation is considered final, and there is no provision for revocation or reactivation. However, if the business needs to operate under GST again, it must apply for a fresh GST registration.

What Happens If GST Registration is Not Reactivated?

If your GST registration remains cancelled, it can have significant operational and financial consequences for your business. Here are the key impacts:

• Inability to Issue GST-Compliant Invoices.
• You will no longer be able to collect GST on sales legally.
• Without GST-compliant invoices, businesses may lose customers who require proper documentation to claim input tax credit (ITC).
• Loss of Input Tax Credit (ITC).
• Business Disruptions and Loss of Credibility.
• Customers and suppliers may hesitate to engage with businesses that do not have valid GST registration, affecting business relationships.
• An inactive GST registration could signal non-compliance to stakeholders, impacting your business reputation.

Time Limit for Revocation of Cancelled GST Registration:

Effective from October 1, 2023, the time limit for taxpayers to apply for the revocation of a cancelled GST registration has been extended to 90 days from the date the cancellation order is served.

Required Documentation for Reactivating GST Registration:

When reactivating your cancelled GST registration, having the following documents ensures a smooth reactivation process without unnecessary delays:

GSTIN and Login Credentials: The GST Identification Number (GSTIN) and login credentials are necessary to access the GST portal and initiate the revocation process. If you’ve forgotten the login details, they can be recovered on the portal using the “Forgot Password” option.

PAN Card of the Business or Proprietor: A Permanent Account Number (PAN) is required to verify the identity of the business or proprietor. The PAN must match the records submitted during the original GST registration.

Proof of Address: You need to provide a valid address proof of the registered business. Acceptable documents include:

• Electricity bill
• Rental or lease agreement
• Municipal tax receipt
• Property ownership documents

Bank Account Details: Submit your bank account statement, cancelled cheque, or bank passbook copy to validate your business’s financial account. The name on the bank account should match the business or proprietor’s name.

Filed GST Returns: To ensure compliance, you must file all pending GST returns for the period when your registration was inactive. Keep copies of receipts of these filed returns as part of your documentation to confirm the backlog is cleared.

Application for Revocation (Form GST REG-21): Form GST REG-21 is the official application for revocation of a cancelled GST registration.

Penalties and Late Fees for Reactivating Cancelled GST Registration

Reactivating a cancelled registration involves several penalties and fees:

Late filing fees: ₹50 per day (₹25 CGST + ₹25 SGST), capped at ₹10,000 per return.

Interest on unpaid tax: 18% interest per annum on outstanding tax.

Additional penalties: Higher penalties may be imposed for intentional non-compliance or fraud.

How to Reactivate Your Cancelled GST Registration?

Below are the steps to file Form GST REG-21 through the GST portal.

Step 1: Log in to the GST Portal

Visit the official GST portal. Log in using your GSTIN (GST Identification Number) and password. If you’ve forgotten your credentials, you can recover them via the “Forgot Username” or “Forgot Password” options on the portal.

Step 2: Apply for Revocation of Cancellation

Navigate to Services > Registration > Application for Revocation of Cancellation.

This option is available only for businesses whose registration was cancelled by authorities (not for voluntary cancellations).

Select your cancelled GSTIN and fill in the required fields, explaining the reason for your revocation request.

Step 3: File All Pending GST Returns

You must clear the backlog by filing all pending GST returns from the period your registration was inactive.

Ensure that you pay the taxes, interest, and penalties due for these periods.

Failing to submit returns will prevent the reactivation request from being processed.

Step 4: Submit Required Documents

You need to upload supporting documents to validate your revocation request. These may include:

PAN card of the business or owner

Address proof of the business (electricity bill, rent agreement, etc.)

Bank details (cancelled cheque or bank statement)

Filed GST returns for the relevant periods

Application for Revocation (GST REG-21)

Step 5: Pay Applicable Penalties and Late Fees

Calculate and pay all penalties, interest, and late fees associated with your cancelled registration.

Late filing fees: ₹50 per day (₹25 for CGST + ₹25 for SGST), capped at ₹10,000 per return.

Interest on unpaid tax: 18% per annum on outstanding tax amounts.

Step 6: Respond to GST Department Queries

The GST department may raise queries or ask for additional information regarding your revocation request.

Check the portal regularly for any notifications.

Ensure prompt responses to avoid delays in processing.

Step 7: Reactivation Approval

Once all requirements are met, the GST department will review your application.

If everything is in order, the authorities will approve your revocation request.

The confirmation will be received via SMS or email, and your GSTIN will be reinstated.

After the GSTIN is reinstated, make sure to maintain compliance and avoid future cancellations.