Suo Moto Cancellation of GST Registration – Reasons, Withdrawal & Actions to Activate

Goods and Services Tax (GST) registration is mandatory for businesses with an annual turnover of more than Rs. 20 lakhs. However, there may be instances where the GST registration may be cancelled suo moto by the authorities. In this article, we will take a closer look at the reasons for suo moto cancellation of GST registration, the process for withdrawal of cancellation and the actions required to activate a cancelled GST registration.

Reasons for Suo Moto Cancellation of GST Registration

There are several reasons why the authorities may choose to cancel GST registration of a business suo moto. These include:

Non-filing of returns: One of the primary reasons for cancellation of GST registration is failure to file returns. GST returns are required to be filed monthly, quarterly or annually depending on the type of business. Failure to file returns for a continuous period of six months could result in suo moto cancellation of GST registration.
Non-compliance: Businesses registered under GST are required to comply with various provisions of the GST law. Non-compliance with the provisions of the GST law could result in suo moto cancellation of GST registration.
Incorrect details: Businesses are required to provide accurate details while registering for GST. In case the details provided are incorrect or incomplete, the authorities may choose to cancel GST registration suo moto.
Non-operational status: GST registration is meant for businesses that are operational. In case a business is non-operational for a continuous period of six months or more, the authorities may choose to cancel GST registration suo moto.

Withdrawal of Cancellation of GST Registration

In case the GST registration of a business is cancelled suo moto, the business can apply for withdrawal of cancellation. The process for withdrawal of cancellation is as follows:

The business needs to file an application for withdrawal of cancellation within 30 days of the cancellation order.
The application needs to be filed in Form GST REG-21 along with the required documents.
The authorities will process the application and may ask for additional documents or information.
Once the authorities are satisfied with the information provided, they may issue an order for withdrawal of cancellation.

Actions to Activate Cancelled GST Registration

Once the GST registration of a business is cancelled suo moto, it cannot be used for any transactions. In order to activate the cancelled GST registration, the following steps need to be taken:

The business needs to file an application for revocation of cancellation in Form GST REG-21 within 30 days of the cancellation order.
The application needs to be accompanied by the required documents.
The authorities will process the application and may ask for additional documents or information.
If the authorities are satisfied with the information provided, they may issue an order for revocation of cancellation.
Once the order for revocation of cancellation is issued, the business can start using the GST registration for transactions.

Conclusion

It is important for businesses to comply with the provisions of the GST law in order to avoid cancellation of GST registration suo moto. In case the registration is cancelled, businesses should apply for withdrawal of cancellation and revocation of cancellation as soon as possible to avoid any disruptions in their operations.