Summary: Cancellation of GST registration refers to removing a business entity from the GST system due to reasons like closure, change in ownership, or non-compliance with regulations. To initiate this, businesses must file an application (Form GST REG-16) within 30 days of the event triggering cancellation. Pending GST returns and taxes must be cleared before the cancellation. The GST officer may request further documents before approving the application. Various forms are involved, including notices for discrepancies and reasons for cancellation (REG-17, REG-18). Section 29 of the CGST Act outlines the process for cancellation and the conditions under which a GST registration can be revoked, including violations or non-filing of returns. The process also includes provisions for suspension during proceedings. Additionally, Rule 21 highlights situations leading to cancellation, such as non-compliance or fraudulent activities. The revocation of cancellation can be requested using Form GST REG-21 under specific conditions. Legal amendments have introduced new provisions and deadlines for both cancellation and revocation, ensuring compliance with tax regulations.
Cancellation of GST Registration: –
Introduction: –
Cancellation of GST registration is a process of de-registering a business entity from the Goods and Services Tax (GST) system. A GST registration can be cancelled for various reasons, which are:
1. Closure of business operations.
2. Change in business ownership or structure.
3. Change in the nature of business activities.
4. Non-compliance with GST regulations.
5. Transfer of business ownership.
➣ To cancel the GST registration, the business entity must file an application in the prescribed form (Form GST REG-16) on the GST portal. The application for cancellation of GST registration must be filed within 30 days from the date on which the cancellation of registration is required.
➣ Once the application is filed, the GST officer may request additional information or documents for processing the application. If the officer is satisfied that all the conditions are met, the GST registration will be cancelled within a period of 30 days from the date of application. Before the GST registration is cancelled, the business entity must file all the pending GST returns and pay any outstanding taxes, interest or penalties before the cancellation is effective.
➣ Cancellation of GST Registration implies that taxpayer will no longer be a GST registered person any more. He will not have to pay or be able to collect GST or claim input tax credit and accordingly, doesn’t need to file GST returns.
➣ FORMs of GST which are used in Cancellation of Registration are:
| Form GST | Description | Relevant Rule |
| REG-16 | Application for Cancellation of Registration | |
| REG-17 | Show Cause Notice for Cancellation of Registration | Rule 22(1) |
| REG-18 | Reply to the Show Cause Notice issued for Cancellation for Registration | Rule 22(1) |
| REG-19 | Order For Cancellation of Registration | |
| REG-20 | Order for Dropping the proceedings for Cancellation of Registration |
Types of Notices relating to Cancellation of Registration
| Sr No | Relevant Form | Particulars | Relevant Rule |
| (i) | REG-31 | Notice seeking cancellation of registration on account of discrepancy in details furnished in Form GSTR-3B with that furnished in Form GSTR-1 | 21A(2A) |
| (ii) | REG-17 | Notice seeking Cancellation of registration by proper officer under Section 29 (Suo Motu Cancellation) | 22(1) |
| (iii) | REG-18 | Reply to be furnished by taxpayer against SCN issued in Form REG-17 within a period of 7 working days | 22(1) |
| (iv) | REG-23 | Notice seeking Rejection of Application for Revocation of Cancellation of Registration | 23(3) |
| (v) | REG-24 | Reply to be furnished by taxpayer against notice issued in FORM REG-23 above within a period of 7 working days | 23(3) |
Statutory Provision for Cancellation of Registration
Section 29 prescribes for Cancellation or Suspension of Registration of CGST and SGST Act,2017. While Rule 20, 21, 21A, 22 prescribes procedure for Cancellation and Suspension of Registration of CGST and SGST Rules,2017.
| Rule | Heading |
| 20 | Application for Cancellation of Registration |
| 21 | Registration to be Cancelled in Certain Cases |
| 21A | Suspension of Registration |
| 22 | Cancellation of Registration |
Comments on Section 29 Cancellation of Registration.
➣ Originally the heading was “Cancellation of Registration” of Section 29 but the word “OR SUSPENSION” has been added by CGST Amendment Act,2018 e.f. 01.02.2019.
Section 29(1) Provides Application for Cancellation
➣ Sub Section (1) of Section 29 prescribes proper officer by his own motion or by application by the registered person or by the legal heirs in case of death of the person within such period and in prescribed manner in circumstances prescribed.
These are:
(a) Discountenance of business transferred fully for various reasons death of proprietor, amalgamation or demerger with other legal entity or otherwise dispose of
(b) Any change of constitution of business
(c) Taxable person no longer liable for to be registered under section 22 or Section 24 or intends to opt out of the registration voluntarily made under Sub Section (3) of section 25.
In the above case, the application for cancellation of registration is generally made by the taxpayer or by legal heir of the tax payer in case of his death.
➣ During the pendency of this cancellation proceeding, the Registration may be suspended for such period. – This proviso has been inserted by CGST (Amendment) Act,2018 w.e.f. 01.02.2019 vide Notification No 02/2019 dated 29-01-2019. So, the Concept of Suspension was not there when GST introduced in July 2017 but later on Concept suspension was introduced from 1st Feb, 2019.
Here, the relevant Rule is Rule 20 of CGST Rules,2017 which provides Procedure for making application for Cancellation of Registration.
➣ Rule 20 Application for Cancellation of Registration
A Registered person, who seeks to cancellation of his registration under sub-section (1) of section 29 shall electronically submit an application in FORM GST REG-16 at the Common portal within a period of thirty days of the occurrence of the event warranting the cancellation, either directly or through a Facilitation Centre notified by the Commissioner, with the details of namely-
a. Inputs held in Stock or
b. Inputs contained in Semi-Finished or
c. Finished Goods held in Stock and
d. Capital Goods held in Stock on the date from which the Cancellation of Registration is sought,
e. Liability thereon,
f. The details of the Payment, if any, made against such liability and may furnish, along with the application,
e. Other Relevant Documents in Support thereof,
➣ This procedure is prescribed for other than a person to whom a registration has been granted under Rule 12 this are the Persons required to deduct TDS OR TCS or a person to whom a Unique Identity Number has been granted under Rule 17.
➣ A proviso as existed upto 22nd Janaury,2018 was there which says that “Provided that no application for the cancellation of registration shall be considered in case of a Taxable person, who has registered voluntarily, before the expiry of a period of one year from the effective date of registration” has been Omitted by CGST (Amendment) Rules,2018 Vide Notification No. 03/2018 dated 23.01.2018. So, one can apply for Cancellation of Registration before one year from effective date of registration only in case of Voluntary Registration. Hence, any person who has taken voluntary registration can apply for cancellation of the same at any time.
➣ The CBIC Vide Circular No. 69/43/2018-GST, dated 26.10.2018 has clarified that the deadline of 30 days may be liberally interpreted and the taxpayers’ application for cancellation of registration may not be rejected because of the possible violation of the deadline as it may be difficult to pinpoint the date on which event occurs in all cases.
➣ But in practice in regular course, we observed that 30 days deadline has not been interpreted liberally. Aftar 30 days if the Cancellation of Registration applied in REG-16 from the date of effective date of cancellation, it results into rejection.
Section 29(2) Provides for Suo Motu Cancellation by Proper Officer
➣ Sub section (2) of Section 29 prescribes proper officer may cancel the registration from such date including any retrospective date, as he may deem fit, where –
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 Composition Levy has not furnished the return for a financial year beyond three months from the due date of furnishing the said return; or – The word “the return for a financial year beyond three months from the due date of furnishing the said return” has been Inserted by CGST 14th Amendment Rules, 2020 w.e.f. 22.12.2020 Vide Notification No 94/2020 dated 22nd Dec, 2020.
c. Any Registered person, other than a person specified in clause (b), has not furnished returns for [such continuous Tax period as may be prescribed; or – the word “such continuous Tax period as may be prescribed” has been Inserted by CGST (2ND Amendment) Rules, 2022 w.e.f. 01.10.2022. Vide Notification No 18/2022 dated 28th Sept, 2022. It is pertaining to those who have taken Registration as Regular Tax payer.
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:
The proviso prescribes that the proper officer shall not cancel the registration without giving the person an opportunity of being heard.
Further provided that the Proper officer may suspend the registration during the pendency of the cancellation of registration in the manner prescribed under Rule 21A.
➣ Second proviso to Sub-Section (2) of Section 29 provides that during pendency of the proceedings relating to cancellation of registration, the proper officer may suspend the registration for certain time period.
Clause (a) of Sub- Section (2) of Section 29 empowers the proper officer to cancel the registration of taxable person where the registered taxable person has contravened such provisions of the Act or the rules made thereunder as may be prescribed. Such contraventions are mentioned under Rule 21 of the CGST Rules, according to which the registration granted to a person would be liable to be cancelled.
Rule 21 provides Registration to be Cancelled in certain cases
The registration granted to a person is liable to be cancelled, if the said Person, –
(a) Does not conduct any business from the declared Place of business; or
(b) Issues invoice or bill without supply of goods or services or both in violation of the provisions of the Act, or the rules made thereunder; or
– Originally the words in clause “(b) issues invoice or bill without supply of goods or services in violation of the provisions of this Act, or the rules made thereunder.” Substituted by CGST Amendment) Rules, 2017 dated 27.06.2017 w.e.f. 22.06.2017 and the word “or both” has been inserted by CGST (14TH Amendment) Rules, 2020 dated 22.12.2020 w.e.f. 22.12.2020 Vide notification No 94/2020 dated 22nd Dec. 2020
(c) Violates the provisions of Section 171 of the Act or the rules made thereunder.
Section 171 prescribes measures for Anti profiteering.
(d) Violates the provision of Rule 10A. – Inserted by CGST (4th Amendment) Rules, 2019 dated 28.06.2019 vide Notification No 31/2019 dated 28th June, 2019. which makes taxpayer to Compulsory to furnish bank account information on GST portal within 45 days of grant of registration or the due date of first GSTR 3B, whichever is earlier by inserting Rule 10A of the CGST Rules’ 2017.
(e) Avails Input tax credit in violation of the provisions of section 16 of the Act or the rules made thereunder; or
(f) Furnishes the details of Outward Supplies in FORM GSTR-1 under section 37 for one or more Tax periods which is in excess of the outward supplies declared by him in his Valid return under section 39 for the said Tax periods; – So those who have shown more Outward Supplies and less in GSTR 3B of those Tax Period Registration can be Cancelled by issuing FORM REG-31 which is an Intimation for Suspension and Notice for Cancellation of Registration for the discrepancy in Filled GSTR-3B and GSTR-1 of Tax Period and details of inward supplies. This a system generated notice and Inserted by CGST (14TH Amendment) Rules, 2020 dated 22.12.2020 w.e.f. 22.12.2020 vide notification No 94/2020 dated 22nd Dec, 2020.
(g) Violates the provision of Rule 86B.- Rule has been regarding Payment of 1% tax if the turnover is more than 50 lacks in a tax period certain to subject exception prescribes in the rule.
➣ Clause e, f, g has been inserted by CGST (14TH Amendment) Rules, 2020 dated 22.12.2020 w.e.f. 22.12.2020 vide notification No 94/2020 dated 22nd Dec, 2020.
(h) being a Registered person required to file return under subsection (1) of section 39 for each month or part thereof, has not furnished returns for a continuous period of six months; (i) being a Registered person required to file return under proviso to subsection (1) of Section 39 for each quarter or part thereof, has not furnished returns for a continuous period of two Tax periods. Clause h has been inserted by CGST (Second Amendment) Rules, 2022 dated 28.09.2022 w.e.f. 01.10.2022 Vide Notification No 18/2022 dated 28th September, 2022.
Section 29(3) Cancellation doesn’t Affects liability
(3) The cancellation of registration under this section shall not affect the liability of the person to pay tax and other dues under this Act or to discharge any obligation under this Act or the rules made thereunder for any period prior to the date of cancellation whether or not such tax and other dues are determined before or after the date of cancellation.
➣ So, the cancellation of registration has no effect on the liability of the taxpayer for any acts of commission/omission committed before or after the date of cancellation.
➣ Therefore, for the tax period during which a tax payer was Registered though Registration has been cancelled the taxpayer is still liable to pay tax, interest or penalty if not paid by tax payer whose Registration is cancelled.
Section 29(4) Cancellation for both at once
(4) The cancellation of registration under The State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act, as the case may be, shall be deemed to be a Cancellation of Registration under this Act.
So, as per Sub-Section (4) of Section 29, the Cancellation of Registration under the SGST Act or UTGST Act shall be deemed to be a Cancellation of Registration under the SGST Act and CGST Act reason being CGST Act is Pari Maetria with SGST Act under GST Law.
Section 29(5) Payoff of debts
(5) Every Registered person whose registration is cancelled shall pay an amount, by way of debit in the Electronic credit ledger or Electronic cash ledger, equivalent to the credit of input tax in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock or Capital goods or plant and machinery on the day immediately preceding the date of such cancellation or the Output tax payable on such goods, whichever is higher, calculated in such manner as may be prescribed: in Rule 44
In terms of Para 8 of Circular No. 69/43/2018-GST, dt 26th OCT, 2018, for the purpose of this calculation, the stocks of inputs, semi-finished goods, finished goods and capital goods shall be taken as on the day immediately preceding the date w.e.f. which the cancellation has been ordered by the proper officer i.e. the date of cancellation of registration.
➣ It has been further stated that this requirement to debit the electronic credit and/or cash ledger by suitable amounts should not be a prerequisite for applying for cancellation of registration. This can be done at the time of submission of final return in Form GSTR-10. So, in cases where proper officer issues SCN in FORM REG-17 and states that Reversal of ITC required for the input held in stock whether finished or semi-finished or of finished goods, there the tax payer can submit their reply by quoting Circular No 69/43/2018-GST dated 26.10.2018 Para No 8 “ It is clarified that this requirement to debit the electronic credit and/or cash ledger by suitable amounts should not be a prerequisite for applying for cancellation of registration This can also be done at the time of submission of final return in FORM GSTR-10.”
➣ In any case, once the taxpayer submits the application for cancellation of his/her registration from a specified date, he/she will not be able to utilize any remaining balances in his/her electronic credit/ cash ledgers from the said date except for discharging liabilities under GST Act upto the date of filing of final return in FORM GSTR-10. Therefore, the requirement to reverse the balance in the electronic credit ledger is automatically met.
➣ In case it is later determined that the output tax liability of the taxpayer, as determined under sub-section (5) of section 29 of the CGST Act, was greater than the amount of input tax credit available, then the difference shall be paid by him/her in cash.
➣ As per sub-section (3) of section 29 of the CGST Act, the cancellation of registration does not, in any way, affect the liability of the taxpayer to pay any dues under GST law, irrespective of whether such dues have been determined before or after the date of cancellation.
➣ As per FAQs on GST dt. 15-12-2018, the requirement to debit the electronic credit and/or cash ledger by suitable amounts should not be a per-requisite for applying for cancellation of registration. This can also be done at the time of submission of final return in FORM GSTR-10.
Provided that in case of Capital goods or plant and machinery, the Taxable person shall pay an amount equal to the Input tax credit taken on the said Capital goods or plant and machinery, reduced by such percentage points as may be prescribed or the tax on the transaction value of such Capital Goods or Plant and Machinery under section 15, whichever is higher.
(6) The amount payable under sub-section (5) shall be calculated in such manner as may be prescribed in Rule 44 – Manner of reversal of credit under special circumstances.
➣ In term of proviso to Sub-Section (5) of Section 29, in case of capital goods, the taxable person, whose registration has been cancelled, is required to pay an amount equal to the ITC on the said Capital Goods reduced by the prescribed percentage points or the tax on the transaction value of such capital goods under 15, whichever is higher, as under:
➣ As per Rule 44(1)(b), for capital goods held in stock, the ITC involved in the, remaining useful life in months shall be computed on pro-rata basis taking the useful life as 5 years.
➣ Illustration: –
Capital Goods have been in use for 4 year, 6 months and 15 days The useful remaining life in months = 5 months Here, we are ignoring a part of the month Input tax credit attributable to remaining useful life = C multiplied by 5/60
The amount payable as above, shall be calculated in accordance with generally accepted accounting principles in the prescribed manner.
Rule 22. Cancellation of Registration.-
(1) Where 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 a period of seven working days from the date of the service of such notice, as to why his registration shall not be cancelled.
(2) The reply to the show cause notice issued under sub-rule (1) shall be furnished in FORM GST REG-18 within the period specified in the said sub-rule.
(3) Where 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 submitted under rule 20 or, as the case may be, the date of the reply to the show cause issued under sub-rule (1) [or under sub-rule (2A) of rule 21A], cancel the registration, with effect from a date to be determined by him and notify the taxable person, directing him to pay arrears of any tax, interest or penalty including the amount liable to be paid under sub-section (5) of section 29. Here the “or under sub-rule (2A) of Rule 21A” Inserted by CGST (14TH Amendment) Rules, 2020 dated 22.12.2020 w.e.f. 22.12.2020. Vide Notification No 94/2020 dated 22nd Dec, 2020.
(4) Where the reply furnished under sub-rule (2) [or in response to the notice issued under sub-rule (2A) of rule 21A] is found to be satisfactory, the Proper officer shall drop the proceedings and pass an order in FORM GST REG-20. Here the “or in response to the notice issued under sub-rule (2A) of rule 21A” Inserted by CGST (14th Amendment) Rules, 2020 dated 22.12.2020 w.e.f. 22.12.2020 Vide Notification No 94/2020 dated 22nd Dec, 2020.
The Proviso Provided that where the person instead of replying to the notice served under sub-rule (1) for contravention of the provisions contained in clause (b) or clause (c) of sub-section (2) of section 29, furnishes all the pending returns and makes full payment of the tax dues along with applicable interest and late fee, the Proper officer shall drop the proceedings and pass an order in FORM GST REG-20, has been inserted by CGST 18th Amendment Rules, 2018 dated 04.09.2018 vide Notification No 39/2018 dated 4th Sept, 2018
(5) The provisions of sub-rule (3) shall, mutatis mutandis which means with necessary changes apply to the legal heirs of a deceased proprietor, as if the application had been submitted by the proprietor himself.
Rule 21A Suspension of Registration
➣ Rule 21A Sub Rule (1) Deemed Suspension
➣ Rule 21A Sub Rule (2) Suspension done by Proper Officer
➣ Rule 21A Sub Rule (3) No supply can be made during the period of suspension
➣ Rule 21A Sub Rule (3A) No refund can be granted during the period of suspension.
➣ Rule 21A Sub Rule (4) Revocation of Suspension of Registration
The suspension of registration of a taxpayer shall be deemed to be revoked upon completion of the proceedings of cancellation of registration by the proper officer under Rule 22 and such revocation shall be effective from the date on which suspension had come into effect. It is also provided that the suspension of registration may be invoked by the proper officer, any time during the pendency of the proceedings for cancellation, if he deems fit.
➣ Rule 21A Sub Rule (5) Issuance of Revised Invoice After Invocation of Suspension Where Any Order having the effect of Revocation of Suspension of Registration has been Passed, the provision of clause (a) of sub section 31 (issuance of revised invoice after revocation of suspension) and Section 40 (furnishing of Final Return) is respect of supplies made during the period of suspension and the procedure specified therein shall apply.
For the Suspension of Registration, one should refer the SOP issued by Circular No 145/01/2021-GST, dt. 11-02-2021
Standard operating procedure (SOP) for Implementation of the Provisions of Suspension of Registration under Sub-Rule (2A) of Rule 21A of CGST Rules,2017.
Para 4 provides Actin to Be Taken By Dealer After Suspension of Registration
The taxpayer whose registration are suspended would be require to furnish reply to the jurisdictional tax officer within 30 days from the receipt of such notice/intimation, explaining discrepancy/anomalies if any and shall furnish the details of compliances made or/and the reasons as to why their registration should not be cancelled.
The said person would be required to reply to the jurisdictional officer against the notice for cancellation of registration sent to them, in Form GST REG-18 online through Common Portal with in time limit of 30 days from the receipt of notice/ intimation.
In case the intimation for suspension and notice for cancellation of registration is issued on ground of non-filling of returns, the said persons may file all the due returns and submit the response. Similarly, in other scenarios as specified under form GST REG-31, they may meet the requirements and submit the reply.
Proceedings for Cancellation of Registration can not be kept Pending for Long Time
Avon Udhyog v. State of Rajasthan [2021] 87 GST 25 (Rajasthan HC)
The Rajasthan High Court observed that suspension of a registration of an assessee has its own consequences- it brings the entire business to a stand still. In a way it is worse than cancellation. Against cancellation, an assessee can take legal remedies but against suspension pending an enquiry, even if the assessee can chooses to take remedies, the authorities or the court(s) would normally show reluctance.
The high court held that proceedings of cancellation of registration cannot be kept handing of fire on any pretext, hence, where SCN was issued to assessee, proposing to cancel suspension with immediate effect, even though assessee failed to file reply within time allowed, Authority issuing notice was statutorily bound to pass order cancelling registration in terms of sub-rule (3) of Rule 22 of the CGST Rules.
Final Return Required to be Filled
Every registered taxable person who applies for cancellation of registration is required to furnish a final return in FORM GSTR-10 within 3 months of the date of cancellation or date of cancellation order, whichever is later.
The purpose of final return is to ensure that the taxpayer discharges liability that he/she may have incurred under Sub-section (5) of section 29 of the CGST Act.
Revocation of Cancellation of GST Registration
Introduction: –
A taxpayer whose GST registration has been cancelled by the proper officer within the relevant provisions of CGST Act, 2017 (for example, non- filing of GST returns for a certain period of time) faces consequences in form of a total cessation of his/her business activities as the taxpayer cannot make taxable supply, e- way bills and collect tax from the customers. As a result, all of the business activity comes to a total halt.
In such situations, the government has given facility to the taxpayer to file a revocation application before the proper officer and ask for restoration of his/her GST registration by showing sufficient cause. The revocation application, if accepted by the officer, reinstates the GST registration of the taxpayer from the very same date from where the registration was cancelled by the officer.
The Revocation of GST registration allows the taxpayer to file the pending returns and pay the due taxes. Relevant Forms for Revocation of Cancellation of Registration:
| FORM GST | Relevant Rule | Description |
| REG-21 | Application for Revocation of Cancellation of Registration | |
| REG-22 | Order For Revocation of Cancellation of Registration | |
| REG-23 | 23(3) | Show Cause Notice for rejection of application for revocation of cancellation of registration |
| REG-24 | 23(3) | Reply to the notice for rejection of application for revocation of cancellation of registration |
| REG-05 | Order of Rejection of Application for Revocation of Cancellation |
Important Things While Applying Revocation of Cancellation of Registration Kept in Mind
➣ Aadhar authentication of the authorized signatory/ proprietor/partner/ director is mandatory before filing a revocation application in terms of Section 30 of the CGST Act, 2017. From 1st Jan, 2022, CBIC has made the Aadhaar Authentication mandatory to apply for revocation of cancelled GST registration under the CGST Rule 23 in while filling Form REG-21. – Inserted by CGST (8th Amendment Rules, 2021 dated 24.09.2023 w.e.f. 01.01.2022 by Notification No. 38/2021-Central Tax dated 21.12.2021.
➣ Where the cancellation has been done due to non- filing of returns, the taxpayer is required to file all the said returns along with payment of tax, interest & late fee before filing revocation application. Practically, the system itself does not allows one to file revocation application, if the returns are pending or can say not filed.
In what cases can a Registered Taxable Person may apply for Revocation of Cancellation of his Registration?
➣ In terms of sub-section (1) of section 27 i.e. Registration of Casual Taxable person and Non -Resident Taxable person, any registered taxable person, whose registration is cancelled by proper officer on his own motion, may apply to such officer for revocation of cancellation of the registration.
➣ Sub-section (1) of section 27 i.e., Registration of Casual Taxable person and Non -Resident Taxable person so whose registration is cancelled by proper officer on his own, apply to such officer for revocation of cancellation of the registration.
➣ But where a registration is cancelled at the request of the taxable person or his legal heirs, the same can-not be revoked. Option of withdraw is available on GST portal untill and unless cancellation order not issued by proper officer. In such a case where the cancellation order issued, fresh GST Registration is the option available to the taxpayer.
Withdrawal option if Cancellation of Registration made by Mistake available from 17/02/2022 on GST Portal
If the application for cancellation of GST registration is made by mistake and the applicant wishes to withdraw the application, then that may be withdrawn so now by following below mentioned steps: 1. Go to the Common Portal and post login navigate through Services → User Services → View My Submissions
2. Click on the “Withdraw” button available beside your Application for Cancellation of Registration
3. Click on Confirm and your application will be withdrawn.
Legal Provisions for Revocation of Cancellation of Registration
Section 30 of CGST Act, 2017 and Rule 23 of CGST Rules provides for Revocation of Cancellation of Registration
Section 30. Revocation of Cancellation of Registration.
Section 30(1) Filling Application for Revocation of Cancellation
(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 [such manner, within such time and subject to such conditions and restrictions, as may be prescribed,] – substituted by Finance Act, 2023 dated 31.03.2023 w.e.f. 01.10.2023 by Noti. No. 28/2023-Central Tax dated 31.07.2023 for “the prescribed manner within thirty days from the date of service of the cancellation order.”
“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).”– Omitted by Finance Act, 2023 dated 31.03.2023 by Notification No. 28/2023-Central Tax dated 31.07.2023
In view of the above, a total period of 90 days (normal period of 30 days+ additional 30 days by the additional commissioner or the joint commissioner+ additional 30 days by the commissioner) is available for filling application for revocation of cancellation of registration.
Section 30(2) Opportunity of Being Heard
(2) The Proper officer may, in such manner and within such period as may be prescribed, by order, either revoke cancellation of the registration or reject the application:
Provided that the application for revocation of cancellation of registration shall not be rejected unless the applicant has been given an opportunity of being heard.
Section 30(3) Revocation of Both at Once
(3) The revocation of cancellation of registration under The State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act, as the case may be, shall be deemed to be a revocation of cancellation of registration under this Act.
Rule 23. Revocation of cancellation of Registration. –
Rule 23 (1) application for revocation
(1) A Registered person, whose registration is cancelled by the Proper officer on his own motion, after by doing Aadhar Authentication submit an application for revocation of cancellation of registration, in FORM GST REG-21, to such Proper officer, within a period of ninety days from the date of the service of the order of cancellation of registration, at the common portal, either directly or through a Facilitation Centre notified by the Commissioner: – The words “within a period of ninety days from the date of the service of the order of cancellation of registration” substituted by CGST (2nd Amendment) Rules,2023 w.e.f. 01.10.2023 vide Notification No. 48/2023-Central Tax Dated 29th Sept, 2023
Earlier the words were “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” – Inserted by CGST (4th Amendment Rules,2021 dated 18.05.2021 w.e.f. 18.05.2021 vide notification no 15/2021 dated 18th May, 2021
➣ Initially, the time limit for filing a revocation application was only 30 days from the date of service of cancellation order. But now, this limit has been increased from 30 days to 90 days from the date of service of cancellation order. The time limit has been increased w.e.f. 01.10.2023 by Notification No. 48/2023-Central Tax Dated: 29th Sept, 2023. So, the taxpayers now have more time to apply for revocation of cancelled GST registration. The form in which such application is to be filed at common GST portal is Form GST REG-21.
Provided that such period may, on sufficient cause being shown, and for reasons to be recorded in writing, be extended by the Commissioner or an officer authorised by him in this behalf, not below the rank of Additional Commissioner or Joint Commissioner, as the case maybe, for a further period not exceeding one hundred and eighty days: – This proviso is substituted with effect from 01.10.2023 by Notification No-38/2023- Central Tax which is called Central Goods and Services Tax (Second Amendment) Rules, 2023.
➣ This proviso has given power to Commissioner or an officer authorised by him, Additional Commissioner or Joint Commissioner not below that rank for filling an application revocation of cancellation of registration up to180 days available by writing reasons in writing.
➣ Therefore, normal period of 30 days + additional 30 days by additional commissioner or joint commissioner +30 days by commissioner + 90 days by Commissioner or an officer authorised by him, Additional Commissioner or Joint Commissioner not below that rank is available with the taxpayer whose GST Registration has been cancelled.
➣ So, one can apply up to 180 days from the date cancellation order issued by showing sufficient cause for the delay with delay condonation application after 1st Oct,2023.
Provided further that no application for revocation shall be filed, if the registration has been cancelled for the failure of the Registered person to furnish returns, unless 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.
Provided also that all returns due for the period from the date of the order of cancellation of registration till the date of the order of revocation of cancellation of registration shall be furnished by the said person within a period of thirty days from the date of order of revocation of cancellation of registration:
Provided also that where the registration has been cancelled with retrospective effect, the Registered person shall furnish all returns relating to period from the effective date of cancellation of registration till the date of order of revocation of cancellation of registration within a period of thirty days from the date of order of revocation of cancellation of registration.– This proviso is substituted with effect from 01.10.2023 by Notification No-38/2023- Central Tax which is called Central Goods and Services Tax (Second Amendment) Rules, 2023.
Procedure for Revocation of Cancelled Registration
(2) (a) Where the Proper officer is satisfied, for reasons to be recorded in writing, that there are sufficient grounds for revocation of cancellation of registration, 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.
(b) The Proper officer may, for reasons to be recorded in writing, under circumstances other than those specified in clause (a), by an order in FORM GST REG-05, Reject the application for Revocation of Cancellation of Registration and communicate the same to the applicant.
(3) The Proper officer shall, before passing the order referred to in clause (b) of sub-rule (2), issue a notice in FORM GST REG-23 requiring the applicant to show cause as to why the application submitted for revocation under sub-rule (1) should not be rejected and the applicant shall furnish the reply within a period of seven working days from the date of the service of the notice in FORM GST REG-24.
(4) Upon receipt of the information or clarification in FORM GST REG-24, the Proper officer shall proceed to dispose of the application in the manner specified in sub-rule (2) within a period of thirty days from the date of the receipt of such information or clarification from the applicant.
The above time limit can also be extended by the Commissioner (on proving sufficient cause resulting in delay of filing application) for a further period of upto 180 days.
The officer, if satisfied with the reasons mentioned in the application, will revoke the cancelled GST registration within 30 days from the date of receipt of revocation application filed by the taxpayer by passing his order in Form GST REG-22.
The officer may also issue a notice in Form GST REG-23 as to why the registration of tax payer be revoked. In this scenario, the tax payer will get 7 days’ time to respond to this notice. Reply by the tax payer shall be filed in Form GST REG-24. If the reply is found satisfactory by the proper officer, he/ she will accept the revocation application and reinstate the registration.
If the officer is not satisfied with the reply filed by the taxpayer, he may reject the application by issuing Form GST REG- 05. If this rejection order is issued, then the registration cannot be reinstated and stands permanently cancelled.
Circular No. 148/04/2021-GST dated the18th May, 2021
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 SOP is for Applying for Extension of Time Limit for Revocation of Cancellation
Till the time an independent functionality for extension of time limit for applying in Form REG-21 is developed on the GSTN portal the CBIC has issued by this circular the guideline for Applying for Revocation of Cancellation of Registration
4.1. Where a person applies for revocation of cancellation of registration beyond a period of 30 days from the date of service of the order of cancellation of registration but within 60 days of such date, the said person may request, through letter or e-mail, for extension of time limit to apply for revocation of cancellation of registration to the proper officer by providing the grounds on which such extension is sought.
The proper officer shall forward the request to the jurisdictional Joint/Additional Commissioner for decision on the request for extension of time limit.
4.2. The Joint/Additional Commissioner, on examination of the request filed for extension of time limit for revocation of cancellation of registration and on sufficient cause being shown and for reasons to be recorded in writing, may extend the time limit to apply for revocation of cancellation of registration. In case the request is accepted, the extension of the time limit shall be communicated to the proper officer. However, in case the concerned Joint/Additional Commissioner, is not satisfied with the grounds on which such extension is sought, an opportunity of personal hearing may be granted to the person before taking decision in the matter. In case of rejection of the request for the extension of time limit, the grounds for such rejection may be communicated to the person concerned, through the proper officer.
4.3. On receipt of the decision of the Joint/Additional Commissioner on request for extension of time limit for applying for revocation of cancellation of registration, the proper officer shall process the application for revocation of cancellation of registration according to the law and procedure laid down in this regard.
5. The above Procedure shall also be followed in case a person applies for revocation of cancellation of registration beyond a period of 60 days from the date of service of the order of cancellation of registration but within 90 days of such date.
6. The circular shall cease to have effect once the independent functionality for extension of time limit for applying in FORM GST REG-21 is developed on the GSTN portal
➣ By Issuing Form GST REG-23 Show Cause Notice for Rejection of Application for Revocation of Cancellation of Registration The proper officer demands certain documents which are:
1. Trading A/C, Profit & Loss A/C & Balance Sheet or Provisional Balance Sheet of Defaulting Year,
2. Month wise figures of GSTR-1, GSTR-2A Credit, GSTR-3B Liability, Late Fees in table.
3. Discharge liability in Cash Ledger and Paid Challan
4. Latest sale/purchase bill copy
5. Latest and Original Proof of Principal Place of Business, Rent Agreement/ “Before me” Notarized Consent Letter Whichever Applicable
6. Bank Statement for Defaulting Period
➣ These documents have to be uploaded on GST Portal when demanded by issuing SCN and copy of the same must be submitted to the SCN issuing officer within 7 Working Days and Opportunity of Personal Hearing also provided. After doing Spot Visit. i.e., Physical Verification of Business Premises Under Rule 25 Sub Rule 1 at the Registered Principal Place of Business Order for Revocation of Cancellation of Registration in the FORM REG-22 This is how GST Registration which is cancelled can be Activated Again Practically.
➣ But I am having the view that bank statement of defaulting period, Trading A/C, Profit & Loss A/C & balance sheet or provisional Trading A/C, Profit & Loss A/C & balance sheet of defaulting period, latest sale/purchase bill copy, latest and original proof of principal place of business, Rent Agreement/ “Before me” Notarized Consent letter whichever Applicable is demanded by proper officer issuing SCN in Form REG-23 is beyond the law because Act and Rules does not prescribe that. So, the proper officer’s act of demanding this document is beyond the power of law. This is my personal view.
➣ If the FORM GST REG-05 Order of Rejection of Application for Revocation of Cancellation has been issued in such case First Appeal can be filled at First Appellate Authority under section 107 of CGST Act, 2017.
➣ Writ can be filled in Jurisdictional High court under article 226 as fundamental right of Freedom of trade and practice under Article 19(1)(g) violated by challenging SCN and Order if any issued.
Conclusion:-
Application of Revocation of Cancellation of GST Registration provides taxpayer an Opportunity to Again continue the business activity by completing compliance of GST Law by filling returns of GST and payment of Tax, Interest, Late Fees and this compliance of GST has great significance when one wants to avoid cancellation of GST Registration.
One should take benefit of 180 Days’ time period for applying Revocation of Cancellation by showing sufficient cause for delay of filling revocation application which is given by the law from 01.10.2023 and after completion of 180 days one should file appeal before First Appellate authority the Appeal against Order of Cancellation of Registration.
****
Author: Miss Zalak Sohil Dalal – Advocate| B.com, LL.B., LL.M. | Advocate & Tax Consultant, Surat.
Miss Zalak Sohilkumar Dalal, a 28-year-old practicing advocate and tax consultant based in Surat, specializes in GST and Income Tax. With over seven years of experience, she has been enrolled with the Bar Council of Gujarat and Bar Council of India since 2020. She holds a Master of Law in Human Rights from VNSGU, Surat, and has a strong academic background, including certifications in cyber law. Miss Dalal has achieved notable milestones, such as serving as a managing committee member for the Western Zone of the All India Federation of Tax Practitioners (AIFTP) for 2024-25 and delivering lectures on GST-related topics. She has also published multiple articles in reputed tax journals, focusing on GST provisions and procedural nuances. Her professional engagements extend to active participation in legal study circles and refresher courses. Additionally, she represented VNSGU in basketball at the university level during her undergraduate studies.
