FCA Avijit Kumar
Section 29 read with Rule 20 to 22 deals with cancellation of registration. As per section 29(1) of CGST Act, registration can be cancelled either by the officer suo moto or on filing an application for cancellation. In this article, we are only discussing about the procedures when an application for cancellation is made by the registered person.
Ans – Application for registration can be filed by
(a) a registered person, other than:
i. person to whom a registration has been granted under rule 12 (registered person requiring to make TDS or TCS u/s 51 or 52)
ii. the person to whom UIN has been granted under rule 17
(b) legal heir of such registered person
Ans – Application for cancellation can be filed if:
(a) the business has been discontinued, transferred fully for any reason including death of the proprietor, amalgamated with other legal entity, demerged or otherwise
(b) there is any change in the constitution of the business; or
(c) the taxable person is no longer liable to be registered under section 22 or section 24.
Ans – Application for cancellation has to be filed in Form REG-16
Ans – Form REG-16 has to be filed within 30 days of the occurrence of event warranting cancellation.
Ans – Yes. Such person are now allowed to apply for cancellation vide notification 03/2018 dt 23/01/2018)
Ans – The proper officer shall pass an order for cancellation in Form REG-19 within 30 days from the date of application for cancellation.
Ans – The language of Rule 22(3) is : cancel the registration, with effect from a date to be determined by him and notify the taxable person. In my opinion, the proper officer can determine the date of cancellation only where the proceedings are initiated suo moto by him. In case where an application for cancellation is filed, the proper officer is bound to accept that date as the effective date of cancellation. The only situation in which the proper officer may determine a different date is when the application is filed beyond prescribed time limit of 30 days. The portal is accepting application even beyond 30 days. In my opinion, only in such cases, the proper officer may not accept the date mentioned in application and may determine a different date.
Ans – It has been seen that in many cases, the proper officers have issued Form REG-03 seeking clarifications. The heading of Form REG-03 is ‘Notice for Seeking Additional Information / Clarification / Documents relating to Application for Registration/Amendment/Cancellation’. It is quite interesting to note that Rule 9 prescribes REG-03 in case clarification is sought where an application for registration is filed, while Rule 19 prescribes REG-03 in case clarification is sought where an application for amendment is filed. But Rule 20 to 22 dealing with cancellation does not prescribe REG-03 anywhere. As such, Form REG-03 is without any legal sanctity and the heading of the Form is of no relevance unless the Rules are amended.
Ans – Even if no order for cancellation is passed by the proper officer within 30 days, the registered person is not required to continue filing his returns. If the prescribed period of 30 days have lapsed, law does not provide any recourse to proper officer also, wherein he can pass any order not accepting the application for cancellation or determining a different date. So, after lapse of 30 days, the date mentioned in the application automatically becomes the effective date of cancellation.
Ans – The effective date of cancellation shall always be the date mentioned in application if filed within 30 days. However, where the proper officer is of opinion that such person was not eligible for cancellation, the recourse available to proper officer is to again grant registration as per procedure prescribed under section 25(8) read with Rule 16.