Cancellation and Revocation Of Cancellation under GST

Last Updated On: June 20, 2020, 2:50 p.m.
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CANCELLATION AND REVOCATION OF CANCELLATION UNDER GST

Goods and Sevices tax is an indirect tax levied on the supply of goods and services. It is essential for every taxpayer to know the registration and cancellation of registration under GST.

As per notification no. 35/2020- Central Tax Dated 03.04.2020, was issued under section 168A of CGST Act, 2017, time limit of any compliance which falls during the period from 20.03.2020 to 29.06.2020 shall be extended up to the 30.06.2020.

The Cancellation of registration under GST is explained detail in the below segment.

Under section 29(1) of CGST Act, the proper office may cancel the registration in the following cases:

  • On his motion; or
  • By filing the application in the form GST REG-16 by the registered person or his legal heirs ( in case of death of the person).

Circumstances where Cancellation of registration shall be carried out:

  1. When the closure of Business is done or transferred fully for any following reasons:
  • Death of the proprietor; or
  • Amalgamated with other legal entity; or
  • Demerged or otherwise disposed of;
  1.  If there is any in the constitution of any business
  2. The taxable person, other than the person who is registered voluntarily is no longer liable to be registered under section 22 or section 24.

 

Application for Cancellation of Registration where following details to be included:

  • The application should be filed in the Form GST REG-16.
  • Details of inputs held in stock or inputs contained in semi-finished or finished goods held in stock and details of capital goods held in stock on the date from which the cancellation of registration is sought.
  • Tax liability
  • The details of the payment if made against such liability.
  • Other relevant documents to be furnished thereon.
  • Application for cancellation of registration shall be made at the GST portal within a period of 30 days from the date of warranting the cancellation.

 

Rule 21: Registration to be cancelled in specified cases

  • the registered person does not conduct any business from the declared place of business; or
  • issues invoice or bill without supply of goods or services in violation of the provisions of the Act, or the rules made thereunder; or
  • Any registered person who violates the provisions of Section 171 of the Act (Anti -Profiteering) or the rules made under the section.
  • A registered person who does not furnish the details of the bank account within 45 days from the date of grant of registration or the date on which the return required under Section 39 is due to be furnished, whichever is earlier.

 

Section 29(2)– Cancellation of Registration by Proper Office:

  • The proper officer may cancel the registration of a person from such date, including any retrospective date-
  • A registered taxable person has contravened the provisions of Act or Rules: or
  • a person paying tax under Section 10 (composition dealer) has not furnished returns for three consecutive periods; or
  • any registered person other than composition supplier has not furnished the returns for a consecutive period of six months; or
  • a person who has taken voluntary registration has not commenced the business within six months from date of registration; or
  • If registration has been taken by means of fraud, willful misstatement or suppression of facts.

 

RULE 22: PROCEDURE FOR CANCELLATION OF REGISTRATION BY PROPER OFFICE:

  • Where the proper officer has certain reasons to believe that the registration of a person is liable to be cancelled, If the proper office is satisfied, then he shall issue a notice in FORM GST REG-17 requiring the person to show the cause as to why he wants to cancel the registration.
  • The registered person willing to cancel the registration should reply to this notice within 7 working days from the date of service of notice in FORM GST REG- 18.
  • If the reply to the notice is found to be satisfied by the proper office, then he/she shall drop the proceedings and pass an order in FORM GST REG -20.
  • If the registered person instead of filing a reply to the show-cause notice, furnishes all the returns and makes full payment of the tax dues along with applicable interest and late fee, the proper officer can drop the proceedings and pass an order in FORM GST REG-20.
  • Where the registration is liable to be cancelled, then the proper officer shall issue an order in FORM GST REG- 19 within 30 days from the date of reply to Show Cause Notice, cancelling the registration.

REVOCATION OF CANCELLATION OF REGISTRATION:

  • Revocation of cancellation of registration means that the decision to cancel the registration has been reversed and the registration is still valid.
  • Section 30(1) of CGST Act, with Rule 23(1)- Application for revocation of Cancellation of Registration:
  • Any registered person, whose registration is cancelled by the proper officer on his own motion, may apply to such officer for revocation of cancellation of the registration in the FORM GST REG-21 within thirty days from the date of service of the cancellation order at the common portal.
  • As per proviso to Rule 23(1), in case the registration has been cancelled due to non-filing of returns the application of registration can be filed only after furnishing of returns and payment of tax, interest, penalty and late fee.
  • As per the second proviso to Rule 23(1), the returns for the period from the date of order of cancellation of registration till the date of order of revocation of cancellation of registration shall be furnished within 30 days from date of such order.
  • third proviso to Rule 23(1), where the registration has been cancelled with retrospective effect, all returns relating to the period from the effective date of cancellation of registration till the date of order of revocation of cancellation of registration shall be furnished by a registered person whose registration is cancelled. Such returns shall be furnished within 30 days from the date of order of revocation of cancellation of registration.

Under section 29(3) of CGST Act-

A person shall still remain to pay tax and other dues

The cancellation of registration under this section shall not affect the liability of the person to pay tax and other dues under this act or to discharge any obligation under this Act or the rules made thereunder for any period prior to the date of cancellation whether or not such tax and other dues are determined before or after the date of cancellation.

Section 30(2) of CGST Act, 2017- Acceptance or Rejection of Application

  • The proper officer may by order either revoke cancellation of the registration or reject the application of revocation of registration. However, the application for revocation of cancellation of registration shall be rejected unless the applicant has been given an opportunity of being heard.
  • As per Rule 23(2) (a), where the proper officer is satisfied, for reasons to be recorded in writing, that there are sufficient grounds for revocation of cancellation of registration, he shall revoke the cancellation of registration by an order in FORM GST REG-22 within a period of thirty days from the date of the receipt of the application and communicate the same to the applicant.
  • Further Rule 23(2) (b), provides that the proper officer may reject the application for revocation of cancellation of registration by an order in FORM GST REG-05 and communicate the same to the applicant.
  • As per Rule 23 (3), before passing the order for rejecting the application for revocation of cancellation of registration, the proper officer shall issue a notice in FORM GST REG-23 requiring the applicant to show cause as to why the application submitted for revocation should not be rejected and the applicant shall furnish the reply within a period of seven working days from the date of the service of the notice in FORM GST REG-24.
  • As per Rule 23 (4), Upon receipt of the information or clarification in FORM GST REG-24, the proper officer shall proceed to dispose of the application by either revoking the cancellation of registration or rejecting the application, within 30 days from the date of receipt of such information or clarification from the applicant.
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