Amendment in Time Limit for Making Application for Revocation of Cancellation of Registration in GST

CA Shalu Khatwani 06 Jul 2021 8,385 Views 1 comment Print Goods and Services Tax | Articles

Section 30 of the CGST Act, 2017 deals with ‘Revocation of Cancellation of Registration’. Finance Act, 2020 made a significant amendment in this Section, w.e.f. 1^st January 2021, vide notification No. 92/2020- Central Tax, dated 22^nd December 2020, which increased the time limit to apply for revocation of a cancelled registration, subject to obtaining approval from the higher authorities.

Before discussing about the amendment, let us first ponder upon the basics of revocation of a cancelled registration in GST. Section 29 of the CGST Act, 2017 deals with Cancellation of Registration, which states the following –

“(1) The proper officer may, either on his own motion or on an application filed by the registered person or by his legal heirs, in case of death of such person, cancel the registration, in such manner and within such period as may be prescribed….”

Therefore, it may be noted here, that there are two means by which a registration may be cancelled. First is, by the proper officer himself, on his own motion and second is, on an application filed by the registered person or by his legal heirs, in case of death of such person.

Section 30 of the CGST Act, 2017 states that –

“(1) Subject to such conditions as may be prescribed, any registered person, whose registration is cancelled by the proper officer on his own motion, may apply to such officer for revocation of cancellation of the registration in the prescribed manner within thirty days from the date of service of the cancellation order.”

That is to say, this procedure of revocation is available only where registration is cancelled by the proper officer himself, on his own motion and not in the cases where registered person or his legal heir (in case of death of registered person) makes an application for cancellation of registration.

Further, Section 29 of the CGST Act, 2017 also provides the circumstances, in which the proper officer may cancel the registration on his own motion, from any retrospective date. The relevant extract is as follows –

(2) The proper officer may cancel the registration of a person from such date, including any retrospective date, as he may deem fit, where,––

(a) a registered 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 has not furnished returns for three consecutive tax periods; or

(c) any registered 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 sub-section (3) of section 25 has not commenced business within six months from the date of registration; or

(e) registration has been obtained by means of fraud, wilful misstatement or suppression of facts:”

It is noteworthy here that the time limit within which the application for revocation can be filed, is thirty days from the date of service of cancellation order, and not thirty days from the effective date of cancellation of registration. This is mainly because the proper officer has been empowered to cancel the registration from any date, which may be any retrospective date as well and accordingly, the effective date of cancellation cannot be a benchmark date, for computation of the time limit of thirty days.

Furthermore, with the Introduction of Finance Act, 2020, a sea change has been made in the time limit given under Section 29 of the CGST Act, 2017, which is reproduced as below –

“Provided that such period may, on sufficient cause being shown, and for reasons to be recorded in writing, be extended,—

(a) by the Additional Commissioner or the Joint Commissioner, as the case may be, for a period not exceeding thirty days;

(b) by the Commissioner, for a further period not exceeding thirty days, beyond the period specified in clause (a).”

Therefore, the amendment has given rise to following two slabs of extended time limits, within which application for revocation of a cancelled registration may be filed, subject to appropriate approvals –

Time Limit	Authority Approving the Extension of Time Limit
31-60 Days	Additional Commissioner or Joint Commissioner
61-90 Days	Commissioner

Accordingly, Rule 23 of the CGST Rules, 2017 has been amended as follows –

“(1)A registered person, whose registration is cancelled by the proper officer on his own motion, may submit an application for revocation of cancellation of registration, in FORM GST REG-21, to such proper officer, within a period of thirty days from the date of the service of the order of cancellation of registration or within such time period as extended 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 sub-section (1) of section 30, at the common portal, either directly or through a Facilitation Centre notified by the Commissioner”

Similarly, the instructions of Form GST REG-21, which is the form for Application for Revocation of Cancellation of Registration, were suitably amended and the following phrase was added, in the same way as Rule 23 was amended –

“………..or within such time period as extended by the Additional Commissioner or the Joint Commissioner or Commissioner, as the case may be, in exercise of the powers provided under proviso to sub-section (1) of section 30 at the common portal……”

As is evident from the amendment in Rule 23 and Form GST REG-21, the original intent of law was to enable the functionality of extension of time limit, for revocation of a cancelled registration, on the Common Portal itself, but due to technical hurdles and procedural difficulties on the GSTN portal, the same could not be done.

Therefore, Circular No 148/04/2021-GST was issued on 18^th May 2021, that brought in place, the Standard Operating Procedure (SOP) for implementation of the provision of extension of time limit to apply for revocation of cancellation of registration under Section 30 of the CGST Act, 2017 and Rule 23 of the CGST Rules, 2017.

This Circular briefed on the procedure that would be followed, for extension of time limit to apply for revocation of cancellation of registration. A summary of the same is explained through the following chart–

Further, the Circular provides that once the independent functionality for extension of time limit, for applying in FORM GST REG-21 is developed on the GSTN portal, the procedure stated above shall cease to have effect.

Therefore, once the Common Portal becomes functional in this regard, the entire procedure for extension of time limit for the purpose of revocation of cancellation of registration shall be done through online mode on the GSTN Portal.