Suo Moto GST Registration Cancellation to GST Revocation – Never to Miss Opportunity

Dear friends, in past few months GST Department has Suo Moto cancelled GST Registration of many dealers which creates a very harsh situation for MSME Sector which are already struggling with cash crunch and other business-related problem created by National lockdown due to Covid situation. There are many reasons due to which GST Registration of a dealer can be Suo Moto cancelled by the officer. In this article we will discuss about that situations which may led to GST Registration cancellation and practical ways to Revocate the cancelled GST Registration.

Process of GST Cancellation (or suspension) of registration is governed by Sec-29 of CGST Act, 2017. GST Cancellation may be suo motto by GST Officer or against in response to an application filed by GST Registered person. GST registration may be cancelled in following situations:

> The business has been discontinued (reason may be death of proprietor, transfer of business in form amalgamation, demerger)

> Change in constitution of business

> GST Registered person is not mandatorily, liable to get registered under GST, (reason may be turnover of business goes below the threshold limit)

> When GST Registered person contravene the provisions of the Act

> When GST Registered person does not file his GST Return

> When GST Registration has been obtained by means of fraud, willful misstatement or suppression of facts

> When a person takes Voluntary GST Registration and after registered under GST, does not commence business within 6 months from the date of GST Registration, then GST Officer has power to cancel the GST Registration

Further, as per Rule 21 of Central GST Rules, 2017 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 in violation of the provisions of this Act, or the rules made thereunder; or

[(c) violates the provisions of section 171 of the Act or the rules made thereunder]

[(d) violates the provision of rule 10A]

As per Rule 21A (2) of Central GST Rules 2017, where the proper officer has reasons to believe that the registration of a person is liable to be cancelled under section 29 or under rule 21, he may, after affording the said person a reasonable opportunity of being heard, suspend the registration of such person with effect from a date to be determined by him, pending the completion of the proceedings for cancellation of registration under rule 22

As per Rule 22 of Central GST Rules 2017, the proper officer has to issue show cause notice to the dealer stating the reason due to which he wants to Suo Moto cancel GST registration and asking the reason why his GST Registration shall not be cancelled and GST registered dealer has to respond against this notice within specified time period. If no reply is being received from dealer or proper officer is not satisfied with the reply submitted by the dealer, he may Suo Moto cancel the GST Registration.

In past 1.5 years, a large number of GST Registration has been Suo Moto cancelled by GST Officers due to above mentioned reasons. And due to cash crunch situation and other family issues a large number of genuine GST Registration has been cancelled and they are facing many challenges in running their business.

As per Rule 23 of Central GST Rules 2017, in case of Suo Moto GST Registration Cancellation, the dealer has the right to file GST Revocation request within 30 days from the date of the service of the order of cancellation of registration at the common portal. The dealer has to give proper reason at time of Filing GST Revocation request, why his Cancelled GST registration should be revocated.

After receipt of revocation request, the proper officer will verify dealer’s application and if satisfied then revocate the cancelled GST Registration.

Now come to Practical Situation

As explained above, as per rule 23 of Central GST Rules 2017, revocation request shall be filed within 30 days, however from January 2021 GST portal is accepting GST Revocation request within 90 days instead of prescribed period of 30 days. Still a large number of dealers missed this time period and struggling a lot to revocate the GST Registration.

In recent Supreme Court Judgement due to COVID Situation across the country, they have extended the limitation period of filing cases under all general and special laws across the country until further orders. After this judgement, now GST Portal has started to accept GST Revocation request even after the lapse of 90 days but must be filed within 180 days from date of cancellation order. However, when we apply for revocation request, a message is shown by GST portal which is as follows:

This is a good step taken by GST Portal to help MSME Sector which is struggling to survive from past few months. If your GST Registration has been Suo Moto cancelled by GST Officer then it is a golden opportunity for all dealers to revocate there cancelled GST Registration

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This article is for the purpose of information and shall not be treated as solicitation in any manner and for any other purpose whatsoever. It shall not be used as legal opinion and not to be used for rendering any professional advice. This article is written on the basis of author’s personal experience and provision applicable as on date of writing of this article. Adequate attention has been given to avoid any clerical/arithmetical error, however; if it still persists kindly intimate us to avoid such error for the benefits of others readers.

The Author “CA. Shiv Kumar Sharma” can be reached at mail –[email protected] and Mobile/Whatsapp – 9911303737/ 9716118384