CBIC vide notification number 49/2019 –CT dated 09.10.2019 made the amendment in CGST Rules, 2017. In this notification, CBIC notifies the new rule 21A(5) – the detailed analysis are herein below;
Suspension of Registration:
As per rule 21A(3) CGST Rule, 2017 (Inserted through Notification No. 03/2019 – Central Tax dated 29.01.2019, w.e.f. 01.02.2019), a registered person, whose registration has been suspended under sub rule (1) or sub rule (2), shall not make any taxable supply during the period of suspension and shall not be required to furnish any return under section 39.
Now, an explanation to this sub rule has been inserted;
The expression “shall not make any taxable supply” shall mean that the registered person shall not issue a tax invoice and, accordingly, not charge tax on supplies made by him during the period of suspension.
Revocation of suspension of registration:
New provision inserted;
Rule 21A(5); “Where any order having the effect of revocation of suspension of registration has been passed, the provisions of clause (a) of sub-section (3) of section 31 and section 40 in respect of the supplies made during the period of suspension and the procedure specified therein shall apply.”
Author’s View (Point (a) & (b):
- The registration shall be deemed to be suspended from the date of submission of the application for the cancellation or date of which the cancellation is sought, whichever is later.
- Through the explanation, CBIC clarifies that in case of suspension of registration, the assessee shall make any taxable supply but he shall not issue any tax invoice and not collect the tax from the recipient.
- The order of revocation of suspension of registration may be issued likely where the taxable person applied for cancellation of registration on account of he is no longer liable to be registered under section 22 or 24 and proper office is not satisfied on such ground.
- New Rule 21A(5) provides that in case of revocation registered person shall issue any revised invoice (Section 31(3)(a)) for the supplies made during the period of suspension and report the same in his first return (Section 40).
- Section 2(66); invoice means the tax invoice as referred to in section 31.
- In view of the above discussion, tax invoices are required to issue after the revocation of suspension of registration for the supplies made during the suspension. It means that he requires to charge and collect the tax. However, in the sub rule 3 of rule 21A, a registered person shall not make any taxable supply during the period of suspension, and further the explanation as inserted clearly specify that not charge tax on supplies made by him.
Therefore, in the author’s view, there is an error in drafting.