Once GST registration is obtained it cannot be canceled until taxpayer voluntarily apply for it or GST authorities canceled it on certain grounds. If GST registration is cancelled by GST authorities, then its mentioned on GST portal as “Suo Moto cancelled”. One cannot submit application for cancellation of registration in case Tax Officer has already initiated suo-moto cancellation of particular registration.
Suo moto cancellation of GST registration indicates that the taxpayer is not GST Registered person and his GSTIN will also become inoperative. Accordingly, taxpayer cannot pay the taxes, claim Input tax credit and also considered as carrying business without GSTIN which attract higher penalties.
Further, now GST department issuing notices via ASMT-10 to the purchasers from suo moto cancelled registrations for reversing the ITC availed on account of non-filling of GSTR-3B returns.
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A) Reasons for Suo moto cancellation of GST registration by GST Department
Suo moto cancellation of registration may be initiated by the Tax Officer for various situations as mentioned in the provisions of GST law like: –
- Any Taxpayer other than composition taxpayer has not filed returns for a continuous period of six months
- Supplies any goods and / or services without issue of any invoice, in violation of the provisions of the Act or rules made thereunder, with the intention to evade tax
- Issues any invoice or bill without supply of goods and/or services in violation of the provisions of this Act, or the rules made thereunder leading to wrongful availment or utilization of input tax credit or refund of tax
- Collects any amount as representing the tax but fails to pay the same to the account of the Central/State Government beyond a period of three months from the date on which such payment becomes due
- Fails to pay any amount of tax, interest or penalty to the account of the Central/State Government beyond a period of three months from the date on which such payment becomes due
- Person is no longer liable to deduct tax at source as per the provisions of GST Law
- Person is no longer liable to collect tax at source as per the provisions of GST Law
- Person no longer required to be registered under provisions of GST Law
- GST Practitioner is found guilty of misconduct in connection with any proceeding under the GST Law.
- Discontinuation/Closure of Business
- Change in Constitution leading to change in PAN
- Ceased to be liable to pay tax
- Transfer of business on account of amalgamation, merger/demerger, sale, lease or otherwise disposed of etc.
- Death of Sole Proprietor
- Composition person has not furnished returns for three consecutive tax periods,
- Registration has been obtained by means of fraud, willful misstatement or suppression of facts. Etc.
B) Withdrawal of order for Suo moto cancellation of GST registration
There must be a valid reason for initiation of proceeding for Suo moto cancellation as specified under Section 29(2) of the CGST/SGST Act and GST Registration cannot be cancelled without a show cause notice being given to taxpayer and a reasonable opportunity of being heard by the Tax Officer. Thus, in case of Suo moto cancellation of registration, a show cause notice shall be issued by the Tax Officer/ Proper officer to the taxpayer and taxpayer would be given a chance to file clarifications in the stipulated time limit.
For replying to the show cause notice issued taxpayer is required to provide response within the prescribed time limit of 7 working days’ time to file reply to the Show Cause Notice (SCN) using the Services > Registration > Application for Filing Clarifications link. If no response is given within prescribed 7 working days, the Tax Officer can proceed with Cancellation of registration.
In case the Tax Officer is satisfied with the response received from the taxpayer, on the Show Cause Notice issued, the proceedings can be dropped and taxpayer is continue with existing GSTIN benefits. Order for withdrawing SCN will be intimated to the Primary Authorized Signatory by SMS & Email also order copy will be made available on the taxpayer’s dashboard to view, print and download. Accordingly, status of GSTIN will change from “Suspended” to “Active”.
C) Cancellation of GST Registration
In case tax officer not satisfied with the submissions he will issue the cancellation order with effective date. Cancellation of registration under the CGST Act or SGST/UTGST or IGST Act shall be deemed to be a cancellation of registration under SGST Act / UTGST Act or CGST Act respectively and vice versa. Taxpayer can view the same by Navigate to Services > User Services > View Notices and Orders to view the Show Cause Notice regarding Suo Moto Cancellation of Registration.
Once registration is cancelled by the Tax Authority, the taxpayer will be intimated about the same via SMS and Email. Order for Cancellation of Registration will be issued and intimated to the Primary Authorized Signatory by Email and SMS and Order will be made available on taxpayer’s dashboard to view, print and download.
Status of the GSTIN/UIN/GSTP ID from ‘Proceeding for Cancellation initiated’ to ‘Inactive’ and will be intimated to the other concerned Tax Authority.
Taxpayer would not be allowed to file return or upload invoices for the period after date of cancellation mentioned in the cancellation order. Also, GSTP will not be able to carry out GSTP functions for any Taxpayer for the period after the date of cancellation mentioned in the cancellation order.
Taxpayer will not be able to amend registration details after issuance of cancellation order. However, email address and mobile number can be updated till dues/ refund are cleared. The facility to file application for revocation (if applicable) will be open for the Cancelled Registration.
D) Actions to Activate GST Registration
Important to note that, even thought registration is cancelled but any liabilities prior to the date of suo moto cancellation will have to be paid by the taxpayer, irrespective of the fact that when determination of liabilities are done.
Any liability which is related to that particular GSTIN is required to be paid by the taxpayer. It can be recovered later on even after the cancellation of GSTIN.
Taxpayer can login to the GST Portal after suo moto cancellation of registration and can submit returns of the earlier period (i.e. for the period before date of cancellation mentioned in the cancellation order), after suo moto cancellation of registration. However, you will not be allowed to file return or upload invoices for the period after date of cancellation mentioned in the cancellation order. Also, GSTP will not be able to carry out GSTP functions on your behalf for the period after the date of cancellation mentioned in the cancellation order.
E) Procedure to activate GST Registration canceled suo moto
- Go to the GST Portal.
- Enter the GST login credentials.
- Go to the Dashboard and then select services. Under the services section click on registration and under the registration section, select application for revocation of canceled registration option.
- Enter the reasons for revocation and attach the supporting documents. (Taxpayer required to complete the GST Return Filing Procedure, in case GST Registration was canceled due to non-compliance)
- Select the authorized signatory and “Submit” the application.
- If the respective GST officer is satisfied with the taxpayer’s justification for reversing the cancellation of registration, the officer will process the order for withdrawing the cancellation.
- The respective GST officer will be doing it within the 30 days from the application date to revoke the registration. The competent officer must sign an order in FORM GST REG-22 reversing the cancellation of GST registration.
- Once this done, taxpayer will be again treated as an Active taxpayer and all the accesses given to the Active taxpayers on GST Portal will be enabled immediately.
- Registration certificate and profile of taxpayer updated accordingly.
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