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When GST can be cancelled?

When the GST registration of a tax payer is cancelled they can not be able to collect GST or avail other benefits that comes with the registration and hence would not be liable to file GST returns. The registration can be cancelled by the tax payers themselves or could be cancelled by the tax officer. The tax officer may cancel a registration under the following conditions. If: –

  •      The tax payer does not conduct any business from the declared place of business.
  • The taxpayer issues invoice or bill without supply of goods or services, that is in violation of the provisions of the CGST Act, 2017.
  • The tax payer violates the provisions regarding anti – profiteering. Such as not passing on the benefit of Input Tax Credit to the customers.
  • The tax payer fails to file GSTR 3B for more than two consecutive months.
  • The tax payers utilises Input Tax Credit (ITC) from electronic credit ledger to discharge more than 99% of the tax liability for specified taxpayers violating Rule 86B.
  • The tax payer avails ITC in violation of the provisions of section 16 of the Act.

In other case where a tax payer can cancel their registration if their business has been discontinued or it has been transferred fully or amalgamated, demerged or otherwise disposed of. The tax payer can cancel the registration when the business ceases to exist. The application for GST registration cancellation shall be initiated through Form GST REG 16. The details regarding inputs, semi-finished, finished goods held in stock on the date on which cancellation of registration is applied and liability thereon and the details of payment shall be mentioned on the Form.

The taxpayer who has registered for GST may also send a letter requesting cancellation of registration in GST REG-21 format to the GTS centre or a local facilitation centre if the local Commissioner of GST has established one.

What is revocation of cancellation?

Revocation means the official cancellation of a decision or promise. Revocation of cancellation of registration means that the decision to cancel the registration has been reversed and the registration is still valid.

Revocation of cancellation is applicable only when the tax officer has cancelled the registration of a taxable person on his own motion. Such taxable person can apply to the officer for revocation of cancellation within thirty days from the date of the cancellation order.

A new proviso was inserted in Section 30 of the CGST Act, with effect from 1st January 2021, allowing extension in the due date to apply for revocation if approved by the Additional/Joint Commissioner or the Commissioner for 30 days each.

Conditions when tax payer can apply for revocation of GST cancellation

The tax payer shall file GST returns and submit all or any outstanding dues. The tax payer must make the necessary tax payments and cover any accrued interest and late fees against them. They shall obtain all documents such as Digital Signature Certificate Number, GST Registration Certificate, GSTIN, and PAN Card.

Procedure for revocation of cancellation –

A registered tax payer can submit an application for revocation of cancellation, in form GST REG 21, if his registration has been cancelled suo moto by the proper officer.

They must submit it within 30 days from the date of service of the cancellation order at the Common Portal. The application taxpayer is provided with an automated approval order and communication. The primary authorised signatory is notified by text message and email when an order requires approval.

  • If the officer in– charge is satisfied he can revoke the cancellation of registration by an order in form GST REG 22 within 30 days from the date of receipt of the application. The reason for revocation of cancellation of GST registration must be recorded in writing.
  • If in case the officer in – charge is not satisfied, he may reject the application for revocation of cancellation of GST registration by a tax officer. The order for rejection will be in Form GST REG 05.
  • Before rejecting, the officer in – charge must issue a show-cause notice in form GST REG 23 for the applicant to show why the application should not be rejected. The applicant must reply in form GST REG 24 within 7 working days from the date of the service of notice. Th officer will take a decision within 30 days from the date of receipt of clarification from the applicant.

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