Cancellation of GST Registration By Tax Official: Everything You Need To Know

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Suo Moto Cancellation of registration may be initiated by the Tax Official 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.

Intimated before the Suo Moto Cancellation of Registration

Registration cannot be cancelled without a Show Cause Notice being given to the taxpayer and a reasonable opportunity of being heard by the Tax Official. Thus, in case of Suo Moto cancellation of registration, a Show Cause Notice shall be issued by the Tax Official/ Proper officer to the taxpayer and taxpayer would be given a chance to file clarifications in the stipulated time limit.

Precondition for Suo Moto Cancellation of 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.

Section 29(2) of the CGST/SGST Act states that the proper officer may cancel the registration of a person from such date, including any retrospective date, as he may deem fit, where, (a) a registered person has contravened such provisions of the GST Act or the rules made thereunder as may be prescribed.

Time Limit For Replying To Show Cause Notice Under GST

You need to provide a 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 Official can proceed with Cancellation of registration.

Dropping of Show Cause Notice

In case the Tax Official is satisfied with the response received from the taxpayer, on the Show Cause Notice issued, the proceedings can be dropped.

  1. Primary Authorized Signatory will be intimated about dropping of SCN by SMS & Email.
  2. Issuance of Order for dropping of SCN will also be intimated to the Primary Authorized Signatory by Email and SMS.
  3. Order will be made available on the taxpayer’s dashboard to view, print and download.
  4. Status of GSTIN will change from “Suspended” to “Active”.

Read More: Draft Reply To Show Cause Notice Under GST

Mariya Paliwala
Mariya Paliwalahttps://jurishour.in/
Mariya is the Senior Editor at JurisHour. She has 5+ years of experience on covering tax litigation stories from the Supreme Court, High Courts and various tribunals including CESTAT, ITAT, NCLAT, NCLT, etc. Mariya graduated from MLSU Law College, Udaipur (Raj.) with B.A.LL.B. and also holds an LL.M. She started as a freelance tax reporter in the leading online legal news companies like LiveLaw & Taxscan.

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