The present article covers the provisions relating to suspension of GST registration on the basis of discrepancies found while comparing various returns filed by the taxpayer. The article also covers the procedure according to which the suspension will be carried out.

Suspension of registration based on return comparison-

Rule 21A of the Central Goods and Services Tax Rules, 2017 deals with the provisions governing the suspension of GST registration. Recently, the Central Board of Indirect Taxes and Customs, vide notification no. 94/2020- Central Tax dated 22nd December 2020 inserted a new sub-rule (2A) to rule 21A.

The provisions of rule 21A(2A) states as under-

  • The GST registration is likely to be cancelled under any of the following cases-
    • Cases, wherein, there is significant discrepancy while comparing the details of outward supplies filed via GST return in Form GSTR-1 and Form GSTR-3B.
    • Cases, wherein, there is significant discrepancy while comparing the details of inward supplies reflected in Form GSTR-2B with Form GSTR-3B.
    • Cases, wherein, there is significant discrepancy/ anomalies observed during any other analysis.
  • However, under any of the above case, prior to cancellation of the GST registration, the taxpayer’s registration would firstly be suspended.
  • The said suspension of registration would be intimated to the taxpayer, in Form GST REG-31, in the following ways-
    • Electronically on GST portal, or
    • Via registered e-mail address.

Procedure for suspension of GST registration under rule 21A(2A)-

Recently, the Central Board of Indirect Taxes and Customs, vide circular no. 145/01/2021-GST dated 11th February 2021, came up with the standard operating procedure for implementation of the suspension provisions imposed vide rule 21A(2A) of the Central Goods and Services Tax Rules, 2017.

Accordingly, the suspension of GST registration will be carried out in the following manner-

  • Firstly, on account of differences, as mentioned above, the GST registration will be suspended.
  • System generated intimation for suspension of registration and notice for cancellation thereon in Form GST REG-31 will be made available to the taxpayer.

Notably, currently the Form GST REG-31 is not available on the GST portal and accordingly the suspension notice/ intimation, for the time being, will be available in Form GST REG-17.

  • On receipt of notice/ intimation, the taxpayer is required to submit an appropriate reply in Form GST REG-18. Such reply is to be submitted within a period of thirty days from the date of receipt of the notice/ intimation.
  • Based on the reply received, the proper officer will take any of the following action-
    • Issue order dropping the suspension proceedings in Form GST REG-20; or
    • Issue order cancelling the GST registration in Form GST REG-19.
  • On the basis of the action taken by the proper officer, the status of the taxpayer would be changed to any of the following-
    • Active – when the suspension proceeding is dropped; or
    • Cancelled Suo-moto – when the GST registration is cancelled.

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