INTRODUCTION
1.1. Registration is the process through which a supplier enters into the GST ecosystem. It is the most fundamental requirement of identify cation of the business for tax purposes and for monitoring compliance requirements.
1.2. The provisions of CGST Act, 2017 and CGST Rules, 2017, relevant to this Chapter are as under –
| Sr. No. Section/Rule Provision pertaining to | ||
| 1 | Section 2(6) | Definition of Aggregate Turnover |
| 2 | Section 2(20) | Definition of Casual Taxable Person |
| 3 | Section 2(47) | Definition of Exempt supply |
| 4 | Section 2(77) | Definition of Non-resident taxable person |
| 5 | Section 2(78) | Definition of Non-taxable Supply |
| 6 | Section 2(108) | Definition of Taxable supply |
| 7 | Section 7 | Scope of supply |
| 8 | Section 9 | Levy and collection |
| 9 | Section 11 | Power to grant exemption from tax |
| 10 | Section 18(3) and Rule 41 | Availability of credit in special circumstances |
| 11 | Section 22 | Persons liable for registration |
| 12 | Section 23 | Persons not liable for registration |
| 13 | Section 24 | Compulsory Registration in certain cases |
| 14 | Section 25 and Rule 8 | Procedure for registration |
| 15 | Rule 9 | Verification of application and approval |
| 16 | Section 27 and Rule 15 | Special provisions relating to casual taxable person and non-resident taxable person |
| 17 | Section 28 and Rule 19 | Amendment of registration |
| 18 | Section 29 and Rule 20 | Cancellation or suspension of registration |
| 19 | Section 30 and Rule 23 | Revocation of cancellation of registration |
| 20 | Section 51 and Rule 12 | Tax deduction at source |
| 21 | Section 52 and Rule 12 | Collection of tax at source |
| 22 | Rule 21 | Registration to be cancelled in certain cases |
| 23 | Rule 21A | Suspension of Registration |
| 24 | Rule 22 | Cancellation of registration |
| 25 | Rule 25 | Physical verifi cation of business premises of certain cases |
1.3. The GST law provides a minimum threshold in terms of aggregate turnover on pan India basis below which a supplier is not required to obtain registration. There are different threshold limits for suppliers exclusively supplying goods and for suppliers exclusively providing services or supplying both goods and services. Therefore, the GST law has provisions to ensure that the suppliers crossing the specified turnover threshold obtain registration and pay GST to the exchequer.
1.4. The registration in GST is PAN based and State specific. Supplier has to register in each of such State or Union territory from where he effects supply. Area upto 12 nautical miles in the sea is considered part of the nearest coastal State where the nearest point of appropriate base line is located. Area beyond 12 nautical miles and upto 200 nautical miles, which is not covered under any Union Territory is considered as a separate Union territory for the GST law. A person registered in one State is considered ‘unregistered person’ outside the State.
1.5. If a person has unit in SEZ or is a SEZ developer and also unit in domestic tariff Area (i.e. outside the SEZ) in the same State, then he has to take separate registration for his SEZ unit/ SEZ developer and DTA unit as a separate place of business of him.
1.6. If a supplier also wants to distribute credit to his same-PAN entities, then he will take separate registration as ‘input service distributor’ (ISD) in addition to his registration as ‘supplier’.
1.7. In GST registration, the supplier is allotted a 15-digit GST identification number called Goods and Services Tax Identification Number “(GSTIN)” and a certificate of registration incorporating therein this GSTIN is made available to the applicant on the GSTN common portal. The first 2 digits of the GSTIN is the State code, next 10 digits are the PAN of the legal entity, the next two digits are for entity code, and the last digit is checking code. Registration under GST is not tax specific which means that there is a single registration for all the taxes i.e. CGST, SGST/UTGST, IGST and cesses.
1.8. A given PAN based legal entity would have one GSTIN per State, that means a business entity having its branches in multiple States will have to take separate State-wise registration for the branches in different States. But a person having multiple places of business in a State or Union territory may be granted a separate registration for each such place of business.
2. PERSON REQUIRED TO TAKE REGISTRATION
2.1. GST registration can be obtained voluntarily by any person or entity who is engaged in supply of goods or services or both irrespective of turnover. However, GST registration becomes mandatory if a person or entity supply goods or services or both beyond a certain turnover. Chapter VI of CGST Act, 2017 contains legal provisions related to Registration. The threshold limit for availing exemption from registration is as follows –
Service Providers: Any person or entity engaged in supply of services having aggregate turnover of more than Rs. 20 lakhs in a year is required to obtain GST registration. In special category states, the GST turnover limit for service providers is Rs. 10 lakhs.
Goods Suppliers: Any person who is engaged in the exclusive supply of goods, whose aggregate turnover crosses Rs. 40 lakhs in a year is required to obtain GST registration.
2.2 The following categories of persons are required to be registered under the GST Act:-
2.3. Aggregate Turnover: Aggregate turnover is calculated based on the PAN income. Hence, if one person has multiple places of business in one or more states, the turnover of each place of business must be summed up to arrive at the aggregate turnover on all India basis. Aggregate Turnover has been defined in Section 2(6) of the CGST Act, 2017. If the aggregate turnover crosses the threshold limit, then registration under GST has to be taken. As per Section 22 of CGST Act, 2017 the aggregate turnover includes all supplies made by the taxable person on his own or on behalf of his principles. The following elements are included in the aggregate turnover (Section 2(6) of CGST Act, 2017) (Section 22 of CGST Act, 2017)
2.3.1. Taxable Supplies as per Section 2(108) of the CGST Act, 2017 means a supply of goods or services or both which is leviable to tax under this Act. Activities/transactions undertaken shall be considered as taxable supplies only when such activities/transactions qualify as a “supply” in terms of Section 7 of CGST Act, 2017 and such supplies are chargeable to tax in terms of Section 9 of CGST Act, 2017. (Section 2(108), 7 & 9 of CGST Act, 2017)
2.3.2 Exempt supply as per Section 2(47) of the CGST Act, 2017 means supply of any goods or services or both which attracts ‘nil’ rate of tax or which may be wholly exempt from tax under Section 11, or under Section 6 of the Integrated Goods and Services Tax Act, and includes non-taxable supply. (Section 2(47), & 11 of CGST Act, 2017) and (Section 6 of IGST Act, 2017)
2.3.3. Non-taxable supply as defined in Section 2(78) of the CGST Act, 2017 means a supply of goods or services or both which is not leviable to tax under the CGST Act, 2017 or under the Integrated Goods and Services Tax Act, i.e., supplies which are not leviable to tax are known as non-taxable supplies. Supplies which are excluded from the charging section i.e. Section 9 of CGST Act, 2017 are to be considered as non-taxable supplies as they are not leviable to tax under this Act. (Section 2(78) & 9 of CGST Act, 2017)
2.3.4. Export of goods or services or both is treated as a zero-rated supply under GST. Export of goods means taking goods out of India to a place outside India. Export of services means the supply of any service when-
(i) the supplier of service is located in India;
(ii) the recipient of service is located outside India;
(iii) the place of supply of service is outside India;
(iv) the payment for such service has been received by the supplier of service in convertible foreign exchange or in Indian rupees wherever permitted by the Reserve Bank of India; and
(v) the supplier of service and the recipient of service are not merely establishments of a distinct person in accordance with Explanation 1 in section 8 of Integrated Goods And Services Tax Act (IGST), 2017.
2.3.5. Inter-State supplies to persons having same PAN. This covers the supply of goods or supply of services or both to persons located in other States/Union Territories but are under the same legal entity. These are taxable supplies under GST and are liable to tax even if such supplies are made without consideration.
3. Compulsory Registration under GST
3.1 The GST law enlists certain categories of suppliers who are required to get compulsory registration irrespective of their turnover that is to say, the specified threshold exemption limit is not available to them. Section 24 of CGST Act, 2017 makes it mandatory for certain type of persons to obtain registration irrespective of their turnover. They are: – (Section 24 of CGST Act, 2017)
(a) Supplier of inter-state supply: ‘Inter-state supply’ means the location of the supplier and the place of supply are in different States or different territories. Persons engaged in such supplies shall be covered under compulsory registration criteria and they have to take GST number before making inter-state supplies.
Exceptions – Any person making the following inter-state supplies shall not be covered under compulsory registration eligibility criteria:
• Inter-state supply of services where the aggregate value of such supplies is not exceeding the exemption limit.
• Inter-state supply of hand-crafted goods, the aggregate value of such supplies does not exceed the exemption limit
• Job-workers having a turnover of less than the exemption limit. This clause shall not be applicable to jewellery, goldsmiths, and silversmith’s wares, and other articles manufactured on a job work basis.
(b) Casual Taxable Person: ‘Casual taxable person’ is defined under Section 2(20) of CGST Act, 2017 and it includes a person who occasionally undertakes transactions involving supply of goods or services or both in the course or furtherance of business, whether as principal, agent or in any other capacity, in a State or a Union territory where he has no fixed place of business. GST registration is compulsory under Section 24 of the CGST Act for a Casual Taxable Person (CTP) before supplying goods or services in the taxable territory. However, CTP is exempted from this requirement if he is engaged in the supply of handicraft goods and the aggregate turnover of such supplies does not cross the GST threshold. (Section 2(20) & 24 of CGST Act, 2017)
(c) Taxpayer under Reverse Charge Mechanism: Under the reverse charge mechanism (RCM), the recipient of goods or services is liable to pay tax and all provisions of GST law shall be applicable to him. It is compulsory to get registered under GST law for a person, who is liable to pay tax under the reverse charge mechanism (RCM).
(d) Non-resident taxable person: “Non-resident taxable person” is defined under Section 2(77) of the CGST Act 2017. “Non-resident taxable person” means any person who occasionally undertakes transactions involving supply of goods or services or both, whether as principal or agent or in any other capacity, but who has no fixed place of business or residence in(Section 2(77) of CGST Act, 2017)
Registration under the GST is compulsory for the Non-resident taxable person if he is engaged in any kind of taxable supply in the taxable territory. Every Non-Resident Taxable Person (NRTP), whether an individual or company, making taxable supplies in India has to register under the GST regime irrespective of the frequency and amount of the transaction.
(e) E-Commerce Operator: Electronic Commerce Operator means any person who owns, operates or manages digital or electronic facility or platform for electronic commerce. Hence, a person who is providing a platform for others to sell goods or services is considered an e-commerce operator. Main examples of such operators selling goods are Amazon, Flipkart etc. and operators selling services are Uber, Ola, Swiggy etc.
Registration under the Goods and Service Tax Act is compulsory for the e-commerce operator if he is engaged in any kind of taxable supply in the taxable territory.
(f) Supplier of OIDAR Services: Online Information and Database Access or Retrieval services (OIDAR) is a category of services provided through the medium of internet and received by the recipient online without having any physical interface with the supplier of such services, for example, downloading of an e-book online for a payment. The IGST Act defines OIDAR to mean services whose delivery is mediated by information technology over the internet or an electronic network and the nature of which renders their supply impossible to ensure in the absence of information technology. For example, advertisement on the Internet, providing cloud services, online supply of digital content (movies, television shows, music and the like); provision of e-books, movie, music, software and other intangibles through telecommunication networks or internet; providing data or information, retrievable or otherwise, to any person in electronic form through a computer network; digital data storage; online gaming, excluding the online money gaming as defined in clause (80B) of section 2 of the Central Goods and Services Tax Act, 2017 (12 of 2017); etc.
Registration under the Goods and Service Tax Act, 2017 is compulsory for the supplier of OIDAR Services.
(g) Persons who are required to deduct tax (TDS) under Section 51 of the CGST Act, 2017 whether or not separately registered under this Act; (Section 51 of CGST Act, 2017)
(h) Persons who make taxable supply of goods or services or both on behalf of other taxable persons whether as an agent or otherwise;
(i) Input Service Distributor (ISD), whether or not separately registered under the CGST Act, 2017;
(j) Persons who supply goods or services or both, other than supplies specified under sub-section (5) of Section 9, through such electronic commerce operator who is required to collect tax at source under Section 52; (Section 9(5) & 52 of CGST Act, 2017)
(k) Every person supplying online information and database access or retrieval services from a place outside India to a person in India, other than a registered person;
(l) Every person supplying online money gaming from a place outside India to a person in India;
(m) Such other person or class of persons as may be notified by the Government on the recommendations of the Council.
4. PERSONS NOT LIABLE FOR REGISTRATION
As per Section 23 of the CGST Act, 2017, persons who are engaged in supplying goods or services or both that are not liable to tax or wholly exempted from tax, are not required to obtain GST Registration. The following kind of persons are exempted from GST Registration (Section 23 of CGST Act, 2017): –
(i) Small businesses having all India aggregate turnover below Rupees 40 Lakhs, in case of supply of goods (Rupees 20 lakhs if business is in the States of Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Puducherry, Sikkim, Telangana, Tripura and Uttarakhand) and Rupees 20 lakhs, in case of supply of services or in case of mixed supplies (Rupees 10 lakh if business is in States of Manipur, Mizoram, Nagaland and Tripura) need not register. The small businesses, having turnover below the threshold limit can, however, voluntarily opt to register. (Section 22 of the CGST Act, 2017)
(ii) Persons who are engaged exclusively in the business of supplying goods or services or both that are not liable to tax or wholly exempt from tax or an agriculturist, to the extent of supply of produce out of cultivation of land are not liable to register under GST. (Section 23 of the CGST Act, 2017)
(iii) In case the supplies being made by a supplier are taxable under reverse charge, there is no requirement for such a supplier to register in light of Notification No. 5/2017-Central Tax dated 19.06.2017.
(iv) Supplier of handicraft goods will not be required to register, if the turnover of the handicraft supplier is less than specified threshold limit, making inter-state supply. They will also not be required to obtain registration as a casual taxable person in other States for making supply of the handicraft goods.
(v) Small suppliers of services, including job workers (except in relation to jewellery, goldsmiths’ and silversmiths’ wares) whose aggregate turnover is less than Rupees 20/10 lakhs limit are exempted from registration, even if they supply services outside the State.
(vi) Supplier of services making inter-state supplies, whose aggregate turnover is less than Rupees 20 lakhs (10 lakh limit in case of specified states) are exempted from registration. (Notification No. 10/2017-Integrated Tax dated 13.10.2017, as amended by Notification No. 3/2019-Integrated Tax dated 29.01.2019)
(vii) Furthermore, persons supplying services through e-commerce operators are not required to register under GST if their aggregate turnover is less than Rs. 20 lakhs per annum (Rs. 10 lakhs in case of specified states) subject to the conditions mentioned in Notification No. 34/2023- Central Tax dated 31.07.2023.
5. PROCEDURE FOR REGISTRATION
5.1. Any person can apply for GST Registration in FORM GST REG-01 in every State or Union territory in which he is liable, within thirty days from the date on which he becomes liable to registration. The applicant has to declare his Permanent Account Number (PAN), mobile number, e-mail address and place of registration in Part A of Form GST REG-01 at the GST common portal and on successful verification, a Temporary Reference Number (TRN) is generated. Using the Temporary Reference Number (TRN), the applicant has to submit an application in Part B of Form GST REG-01 with required documents at the common portal duly signed and verified with Digital Signature. The proper officer at Central Processing Cell (CPC) examines the application and the documents and if the same are found to be in order, shall approve the grant of registration to the applicant. While examining, if the officer requires any additional information/ document/ clarification, notice in Form GST REG-03 will be issued. On verification, the proper officer shall issue certificate of registration in Form GST REG-06.
5.2. A total of 31 forms/ formats have been prescribed in the GST Rules, for every process in the registration chain such as application for registration, acknowledgment, query, rejection, registration certificate, show cause notice for cancellation, reply, cancellation, amendment, field visit report etc., which are standard formats. Strict timelines have been stipulated for completion of different stages of registration process. (Rule 8 of CGST Rules, 2017)
5.3. In accordance with the provisions of Section 25 of CGST Act, 2017 read with Rule 8 of CGST Rules, 2017 an application in FORM GST REG-01 has to be submitted online through the common portal Goods and Services Tax Network (GSTN) within thirty days from the date when liability to register arose. The casual and non-resident taxable persons need to apply at least five days prior to the commencement of the business. (Section 25 of CGST Act, 2017)
5.4. A transferee or the successor of a business on-going concern basis shall be liable to be registered with effect from the date of such transfer or succession. In a case of transfer pursuant to sanction of a scheme or an arrangement for amalgamation or demerger of two or more companies by an order of a High Court, the transferee shall be liable to be registered with effect from the date on which the Registrar of Companies issues a certificate of incorporation giving effect to such order of the High Court. This means that the Registration Certificate issued to a person is not transferable to any other person. (Rule 9 of CGST Rules, 2017) (Section 27 of CGST Act, 2017)
5.5. The proper officer shall examine the application and the accompanying documents and if the same are found to be in order, approves the grant of registration to the applicant within a period of seven working days from the date of submission of the application as per Rule 9 of CGST Rules, 2017. A person applying for registration as a casual taxable person shall be given a temporary reference number by the common portal for making advance deposit of tax in accordance with the provisions of Section 27. An acknowledgement shall be issued electronically to the applicant in FORM GST REG-02 only after the said deposit.
5.6. Where the application is found to be deficient, or where the Proper Officer requires any clarification, Proper Officer may issue a notice in FORM GST REG-03 within a period of seven working days from the date of submission of the application as per Rule 9(2) of CGST Rules, 2017 and the applicant shall furnish such clarification, information or documents electronically, in FORM GST REG-04, within a period of seven working days from the date of the receipt of such notice as per Rule 9(4) of CGST Rules, 2017. (Rule 9(2), 9(4) of CGST Rules, 2017)
5.7 However, if the applicant fails to undergo authentication of Aadhaar number or does not opt for authentication of Aadhaar number; or having undergone authentication of Aadhaar, is identified on the common portal, based on data analysis and risk parameters, for carrying out physical verification of places of business; or the Proper Officer deems it fit to carry out physical verification of places of business, the notice in FORM GST REG-03 may be issued not later than thirty days from the date of submission of the application as per Rule 9(2) of CGST Rules, 2017. (Rule 9(2) of CGST Rules, 2017)
5.8 The provisions of Aadhaar authentication are not applicable to a person who is:
(a) not a citizen of India; or
(b) a department or establishment of Central or State Government; or
(c) a local authority; or
(d) a statutory body; or
(e) a PSU; or
(f) a person applying for registration under Section 25 (9) of the CGST Act, 2017. (Section 25(9) of CGST Act, 2017)
5.9. Where the Proper Officer is satisfied with the clarification, information or documents furnished by the applicant, he may approve the grant of registration to the applicant within a period of seven working days from the date of the receipt of such clarification or information or documents as per Rule 9(3) of CGST Rules, 2017. (Rule 9(3) of CGST Rules, 2017)
5.10. Where no reply is furnished by the applicant in response to the notice or where the Proper Officer is not satisfied with the clarification, information or documents furnished, he may for reasons to be recorded in writing, reject such application and inform the applicant electronically in FORM GST REG-05 as per Rule 9(4) of CGST Rules, 2017. (Rule 9(4) of CGST Rules, 2017)
5.11 If the Proper Officer fails to take any action within the aforementioned timelines, the application for grant of registration shall be deemed to have been approved as per Rule 9(5) of CGST Rules, 2017. (Rule 9(5) of CGST Rules,2017)
5.12 Physical verification (PV) in connection with registration: Where the proper officer is satisfied that the physical verification of the place of business of a person is required after the grant of registration, he may get such verification of the place of business done and the verification report along with the other documents, including photographs, shall be uploaded in FORM GST REG-30 on the common portal within a period of fifteen working days following the date of such verification as per Rule 25 of CGST Rules, 2017. (Rule 25 of CGST Rules, 2017)
5.13 Where the application for grant of registration has been approved under Rule 9 of CGST Rules, 2017, a certificate of registration in FORM GST REG-06 showing the principal place of business and additional place or places of business shall be made available to the applicant on the common portal and a Goods and Services Tax Identification Number (GSTIN) shall be assigned. (Rule 9 of CGST Rules, 2017)
5.14 Any person required to deduct tax in accordance with the provisions of Section 51 of the CGST Act, 2017 or collect tax at source in accordance with the provisions of Section 52 of the CGST Act shall electronically submit an application, duly signed or verified through electronic verification code, in form GST REG-07 for grant of registration as per Rule 12(1) of CGST Rules. (Section 51 & 52 of CGST Act, 2017) (Rule 12(1) of CGST Rules, 2017)
5.15 When the proper officer is satisfied that the TDS deductor/ TCS collector is no longer liable to deduct TDS or TCS, then the proper officer may cancel the GST registration and inform the same to the TDS deductor/ TCS collector in Form GST REG-08 as per Section 52 of CGST Act, 2017. (Section 52 of CGST Act, 2017)
5.16 As per Section 24 of the Central Goods and Services Tax Act, 2017, any non-resident taxable person engaged in providing taxable supply is compulsorily required to obtain GST registration. In order to obtain GST registration, the non-resident taxable person is required to electronically file an application in Form GST REG-09.
(Section 24 of CGST Act, 2017)
5.17 As per Section 24 of the CGST Act, 2017 the person engaged in supplying ‘online information and database access or retrieval services’ to obtain compulsory registration, when the services are supplied from a place outside India to a person in India (other than a registered person). Such a person can obtain GST registration by filing an application in Form GST REG-10.
5.18 The casual taxable person and/or a non-resident taxable person willing to extend his GST registration is required to file an application in Form GST REG-11 as per Rule 15 of the CGST Rules, 2017. (Rule 15 of the CGST Rule, 2017)
6. AMENDMENT OF REGISTRATION
6.1 Every registered person and a person to whom UIN has been granted shall inform the proper officer of any changes in the information furnished at the time of registration, as prescribed as per Section 28(1) of CGST Act, 2017. (Section 28(1) of CGST Act, 2017)
6.2 If there is any change in any of the particulars furnished in the application for registration in form GST REG-01 or form GST REG-07 or form GST REG-09 or form GST REG-10 or for UID in form GST REG-13, the registered person shall, within fifteen days of such change, submit an application, duly signed or verified electronically in form GST REG-14, along with documents relating to such change as per Rule 19(l)(a) of CGST Rules, 2017. (Rule 19(1)(a) of CGST Rules, 2017)
7. APPLICATION FOR CANCELLATION OF REGISTRATION
7.1 The applicant shall apply for cancellation of registration electronically in FORM GST REG-16 and shall furnish the details of inputs, inputs contained in semi-finished or finished goods and of capital goods held in stock on the date from which cancellation of registration is sought and liability thereon.
7.2 The applicant shall also furnish details of the payment against such liability. Application should be submitted within thirty days of occurrence of the event warranting cancellation, either directly or through a Facilitation Centre as per Rule 20 of CGST Rules, 2017. (Rule 20 of CGST Rules, 2017)
7.3 In case of death of sole proprietor, application for cancellation of registration shall be made by legal heir/ successor in FORM GST REG-16.
7.4 CBIC Circular No. 96/15/2019-GST dated 28-3-2019 states that the transfer or change of ownership of business will include transfer or change in ownership of business due to death of sole proprietor.
7.5 If the legal heirs continue the business, it will be considered as transfer of business. Credit shall be allowed to be transferred as per Section 18(3) of CGST Act, 2017 read with Rule 41 of CGST Rules, 2017. The registered person shall file FORM GST ITC-02 in respect of registration which is required to be cancelled. Form GST ITC-02 should be filed before filing application for cancellation of registration. On acceptance by transferee/ successor, unutilized ITC as specified in form GST ITC-02 shall be credited to electronic credit ledger of transferee. The transferee is liable to pay tax, interest and penalties of the deceased person, as per Sections 85(1) and 93(1) of CGST Act, 2017. (Rule 41 of CGST Rules, 2017) (Section 18(3), 85(1) & 93(1) of CGST Act, 2017)
8. CANCELLATION OF REGISTRATION
8.1 The proper officer may, either on his own motion or on an application filed by registered person or his legal heir (in case of death of such person) may cancel the registration as per Section 29 of CGST Act, 2017. The proper officer will have regard to the following, while cancelling registration- (Section 29 CGST Act, 2017)
- whether the business has been discontinued, transferred fully for any reason including death of the proprietor, amalgamated with other legal entity, demerged or otherwise disposed of; or
- whether there is any change in the constitution of the business; or
- where the taxable person is no longer liable to be registered under Section 22 or Section 24 of the CGST Act, 2017 or intends to opt out of the registration voluntarily made under Section 25 [voluntary registration]. (Section 22, 24, 25 of CGST Act, 2017)
8.2 Superintendent of Central Tax has been specified as ‘proper officer’ for this purpose.
8.3 No cancellation of registration if all dues paid- If a taxable person files earlier returns with late fee, pay taxes and other dues, the proper officer shall drop the proceedings of cancellation of registration and pass an order in FORM GST REG-20 as per provisions of Rule 22(4) of CGST Rules, 2017. (Rule 22(4) of CGST Rules, 2017)
8.4 CBIC vide Circular No. 69/43/2018-GST dated 26.10.2018 has issued clarifications with regard to processing of the application for cancellation in FORM GST REG-16.
9. SUSPENSION OF REGISTRATION PENDING CANCELLATION
9.1 Where a registered person has applied for cancellation of registration under Rule 20 of CGST Rules, 2017 the registration shall be deemed to be suspended from the date of submission of the application or the date from which the cancellation is sought, whichever is later, pending the completion of proceedings for cancellation of registration under Rule 22 and Rule 21 of CGST Rules, 2017. (Rule 20, 21, 22 of CGST Rules, 2017)
9.2 Once application for cancellation of registration is filed, no return is to be filed, except final return in FORM GSTR-10, as per CBIC Circular No. 69/43/2018-GST dated 26.10.2018.
9.3 A registered person, whose registration has been suspended shall not be granted any refund under Section 54 of CGST Act, 2017 during the period of suspension of his registration. (Section 54 of CGST Act,2017)
9.4 Revocation of suspension – The suspension of registration shall be deemed to be revoked upon completion of the proceedings by the proper officer under Rule 23 of CGST Rules, 2017 and such revocation shall be effective from the date on which the suspension had come into effect. The suspension of registration under this rule may be revoked by the proper officer, anytime during the pendency of the proceedings for cancellation, if he deems fit. (Rule 23 of CGST Rules, 2017)
10. SUO MOTO CANCELLATION OF REGISTRATION UNDER GST BY PROPER OFFICER
10.1 The proper officer may cancel the registration of taxable person from such date, including any retrospective date, as he may deem fit, where,-
- the registered taxable person has contravened the provisions of the Act or the rules made thereunder, as may be prescribed; or
- a person paying tax under Section 10 [Composition Scheme] has not furnished the return for a financial year beyond three months from the due date of furnishing the said return; or (Section 10, 25(3) & 29(2) of CGST Act, 2017)
- any taxable person, other than a person under a Composition Scheme, who has not furnished returns for continuous period of six months.
- any person who has taken voluntary registration under Section 25(3) of the CGST Act,2017 has not commenced business within six months from the date of registration; or
- registration has been obtained by means of fraud, wilful misstatement or suppression of facts as per Section 29(2) of CGST Act, 2017.
10.2 Superintendent of Central Tax has been specified as ‘proper officer’ for this purpose vide CBEC Circular No. 1/1/2017, dated 26.06.2017 and can suspend the registration as per Section 29(2) of CGST Act, 2017.
10.3 Opportunity of hearing before cancellation of registration – The proper officer shall not cancel the registration without granting the person an opportunity of being heard as per Section 29(2) of CGST Act, 2017.
10.4 Procedure for Suo moto cancellation of registration – If the proper officer has reasons to believe that the registration of a person is liable to be cancelled under Section 29, he shall issue a notice to such person in FORM GST REG-17, requiring him to show cause within seven working days from the date of service of such notice as to why his registration should not be cancelled as per Rule 22(1) of CGST Rules, 2017. (Section 29 of CGST Act.2017) (Rule 22(1) of CGST Rules, 2017)
10.5 The reply to the show cause notice issued shall be furnished in FORM GST REG-18 within seven days as per Rule 22(2) of CGST Rules, 2017. The proper officer shall drop the proceedings, if the reply is found to be satisfactory and pass an order in FORM GST REG-20 as per Rule 22(4) of CGST Rules, 2017. (Rule 22(2), (4) of CGST Rules, 2017)
11. FINAL ORDER OF CANCELLATION OF REGISTRATION
11.1 If a person, who has submitted an application for cancellation of his registration, is no longer liable to be registered or his registration is liable to be cancelled, the proper officer shall issue an order in FORM GST REG-19, within a period of thirty days from the date of application or the date of the reply to the show cause issued under Rule 22 or Rule 21 of CGST Rules, 2017 to cancel the registration. The proper officer shall determine effective date of cancellation of registration and notify the taxable person, directing him to pay arrears of any tax, interest or penalty including the amount liable to be paid under Section 29(5) of CGST Act, 2017 and Rule 22(3) of CGST Rules, 2017. (Rule 20,21, 22, of CGST Act, 2017)
11.2 Standard Operating Procedure for cancellation of registration has been specified in CBIC Circular No. 69/43/2018-GST dated 26-10-2018. Once application for cancellation is filed, it is not necessary to file any return, except final return in form GSTR-10 as specified in CBIC Circular No. 88/07/2019- GST dated 1-2-2019.
12. Revocation of Cancellation of Registration
12.1 If registration is cancelled under Section 29 of CGST Act, 2017 read with Rule 21 of CGST Rules, 2017 but if person is continuing to carry on business, he should apply for revocation of cancellation of registration under Section 30 of CGST Act, 2017 read with Rule 23 of CGST Rules, 2017. He should not apply for fresh registration under CGST Act, 2017 as he may be having tax liability under earlier cancelled registration. (Section 29, & 30 of CGST Act, 2017) (Rule 21, 23 of CGST Rules,2017)
12.2 When the registration has been cancelled by the Proper Officer (Superintendent of Central Tax) on his own motion and not on the basis of an application, then the registered person, whose registration has been cancelled, can submit an application for revocation of cancellation of registration, in FORM GST REG-21, to the Proper Officer (Assistant or Deputy Commissioners of Central Tax), within a period of thirty days from the date of the service of the order of cancellation of registration at the common portal.
12.3 However, if the registration has been cancelled for failure to furnish returns, application for revocation shall be filed, only after such returns are furnished and any amount due as tax, in terms of such returns, has been paid along with any amount payable towards interest, penalty and late fee in respect of the said returns.
12.4 On examination of the application if the Proper Officer is satisfied, for reasons to be recorded in writing, that there are sufficient grounds for revocation of cancellation of registration, then he shall revoke the cancellation of registration by an order in FORM GST REG-22 within a period of thirty days from the date of the receipt of the application and communicate the same to the applicant.
12.5 However, if on examination of the application for revocation, if the Proper Officer is not satisfied then he will issue a notice in FORM GST REG–23 requiring the applicant to show cause as to why the application submitted for revocation should not be rejected and the applicant has to furnish the reply within a period of seven working days from the date of the service of the notice in FORM GST REG-24.
12.6 Upon receipt of the information or clarification, the Proper Officer shall dispose of the application within a period of thirty days from the date of the receipt of such information or clarification from the applicant. In case the information or clarification provided is satisfactory, the Proper Officer shall revoke the cancellation. In case, it is not satisfactory, the applicant will be mandatorily given an opportunity of being heard, after which the Proper Officer reject the application for revocation of cancellation of registration and communicate the same to the applicant.
13. FUNCTIONS OF CENTRAL PROCESSING CELL OFFICERS
13.1 The registration applications filed at the GST common portal (GSTN) are forwarded to the Central and State tax authorities as per GST Law and defined algorithms. The applications will be routed to the concerned CPC zone based on the address of the principal place of business.
13.2 The CPC officer views the application falling under category either ‘With PV or ‘without PV’. If the Aadhar has not been authenticated while filing for registration then the application will land on the dashboard under category ‘with PV’. Even, if the Aadhar has been authenticated, based on data analysis and risk parameters, certain applications will land on the CPC dashboard under category ‘with PV’.
13.3 CPC views the attached documents and can either approve or raise query within 7 working days (if application falling under ‘without PV’ category). If no response to query is received within next 7 working days or the response to query is not satisfactory, the officer can reject the application. In other cases, CPC verifies the attached documents and can either approve or raise query within 30 days (if application falling under ‘with PV’ category). If no response to query is received within next 7 working days or the response to query is not satisfactory, the officer can reject the application.
13.4 Registration application sent to Divisional AC/DC for physical verification. If the physical verification report is not sent to CPC within thirty days from the date of submission of the application so as the notice in FORM GST REG-03 may be issued not later than thirty days from the date of submission of the application, it will get deemed approved. A detailed Standard Operating Procedure dated 27.11.2020 has been issued by GST Policy Wing for verification of taxpayers granted deemed registration.
13.5 In terms of Rule 25 of CGST Rules, 2017, when the proper officer is satisfied that the physical verification of the place of business of a person is required due to failure of Aadhaar authentication or due to not opting for Aadhaar authentication before the grant of registration, or due to any other reason after the grant of registration, he may get such verification of the place of business, in the presence of the said person, done and the verification report along with the other documents, including photographs, shall be uploaded in FORM GST REG-30 on the common portal within a period of fifteen working days following the date of such verification. (Rule 25 of CGST Rules, 2017)
13.6 Physical verification of business premises in certain cases –
(i) The Physical Verification is carried out by the Inspector/ Superintendent at Division Level. The CBIC notified the Standard Operating Procedure (SOP) for verification of taxpayers granted deemed registration vide Instruction No. 4/3/2020-GST dated 27.11.2020. After the completion of Physical Verification, the officer has to submit the Visit Report and on the basis of the same the Superintendent shall submit the Physical Verification report in FORM GST REG-30 along with recommendation to CPC for further processing of registration.
(ii) The said Inspector/ Superintendent conduct physical verification of the principal place of business and wherever possible, additional place of business, indicated in GST registration FORM REG-01 of the concerned registrant. During the physical verification, the officer, among other things, would also verify the following details:
(a) In case the applicant intends to carry out manufacturing activity, whether capital goods, if required for the said manufacturing activity, have been installed.
(b) Electricity connection, bills paid in the relevant period.
(c) Size of the premises – whether it is commensurate with the activity to be carried out by the applicant.
(d) Whether premises is self-owned or is rented and documents relating to ownership/ registered lease of the said property. In case of doubt, enquiry may also be made from the landlord/ owner of the property in case of rented / leased premises.
(e) of employees already employed and record of their employment.
(f) Aadhaar and PAN of the applicant and its Proprietor, Partners, Karta, Directors as the case may be and the authorised signatories.
(g) Bank’s letter for up-to-date KYC.
(iii) In addition to the physical verification conducted, the said Inspector/ Superintendent, in the interest of revenue, would carry out the preliminary financial verification of the registrants by seeking the following documents and carrying out its scrutiny:
(a) ITRs of the company / LLP from the date of incorporation or for last three financial years, whichever is less. ITRs of proprietor, partners, Karta, etc. may be taken in other cases.
(b) The status of activity from the date of registration of all the bank account(s) linked to registration; the same may be taken through a letter / undertaking from the applicant. Phone number declared / linked to each of the bank accounts may also be obtained.
(c) Quantum of capital employed/proposed to be employed.
(d) Out of the amount mentioned at (c) above: (i) Own Funds: (ii) Loan Funds: (indicate the names, complete address, PAN and amount borrowed from each such lender separately):
(e) In case of own funds, also check the audited balance sheet for previous financial year, where available, in addition to the Income Tax Returns mentioned in (a) above.
(f) In case of loan funds check the proposal submitted to the Bank/FI for approval of the loan and the
maximum permissible bank finance as per such proposal, where the amount is proposed.
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Source: Handbook of GST Law and Procedures for Departmental Officers issued by Ministry of Finance.
