Suo moto cancellation of GST registration – Reasons, Withdrawal & Actions to Activate

Under the Goods and Services Tax (GST) regime in India, the tax authorities may cancel a taxpayer's registration suo moto, i.e., without any request from the taxpayer. Suo moto cancellation of GST registration intro

Under the Goods and Services Tax (GST) regime in India, the tax authorities have the power to cancel a taxpayer's registration suo moto, i.e., without any request from the taxpayer. Suo moto cancellation of GST registration is typically initiated in case of non-compliance with the GST laws or failure to file GST returns or pay GST dues. When the tax authorities initiate the cancellation process, the taxpayer is notified and given an opportunity to respond to the notice. If the taxpayer fails to respond or rectify the non-compliance within the prescribed time limit, the tax authorities may cancel the registration. Suo moto cancellation of GST registration can have serious consequences for the taxpayer, such as disqualification from availing input tax credit and doing business with other registered taxpayers. Therefore, it is important for taxpayers to comply with the GST laws and file returns and pay taxes in a timely and accurate manner to avoid the risk of suo moto cancellation of registration.

The reasons for suo moto cancellation of GST registration, the process for withdrawal of cancellation, and the actions required to activate the registration are as follows:

Reasons for Suo Moto Cancellation of GST Registration:

1. Non-filing of GST returns: If a taxpayer fails to file GST returns for a continuous period of six months, the tax authorities may cancel the registration.

2. Non-compliance with GST laws: If a taxpayer violates any provisions of the GST law, such as evasion of tax or fraudulent transactions, the tax authorities may cancel the registration.

3. Non-payment of GST: If a taxpayer fails to pay the GST due, the tax authorities may cancel the registration.

Process for Withdrawal of Cancellation:

If a taxpayer's registration has been cancelled suo moto, the taxpayer may apply for the withdrawal of cancellation within 30 days from the date of receipt of the cancellation order. To apply for withdrawal, the taxpayer must file an application in Form GST REG-21 on the GST portal. The application must include the reasons for the delay in filing returns or payment of taxes, and the taxpayer must pay all the pending taxes and applicable interest.

Actions Required to Activate the Registration:

If the tax authorities accept the application for withdrawal of cancellation, the registration will be reactivated, and the taxpayer will be required to file all the pending returns and pay the pending taxes and applicable interest. The reactivated registration will be effective from the date of cancellation of registration.

If the application for withdrawal of cancellation is not accepted by the tax authorities, the taxpayer may file an appeal before the GST Appellate Tribunal within three months from the date of the cancellation order.

It is advisable for taxpayers to ensure timely compliance with the GST laws to avoid the cancellation of registration and related consequences.

Suo moto cancellation of GST registration FAQs

What is suo moto cancellation of GST registration?

A: Suo moto cancellation of GST registration is the cancellation of GST registration by the tax authorities without any request from the taxpayer. This typically occurs when a taxpayer fails to comply with the GST laws or fails to file returns or pay taxes for a continuous period of six months.

What is the process for suo moto cancellation of GST registration?

A: When the tax authorities initiate the cancellation process, a notice is issued to the taxpayer asking for an explanation for the non-compliance. If the taxpayer fails to respond or rectify the non-compliance within the prescribed time limit, the tax authorities may cancel the registration.

What are the consequences of suo moto cancellation of GST registration?

A: The consequences of suo moto cancellation of GST registration include disqualification from availing input tax credit and doing business with other registered taxpayers. The taxpayer may also face penalties and legal action for non-compliance with the GST laws.

Can a taxpayer apply for the withdrawal of cancellation of GST registration?

A: Yes, a taxpayer can apply for the withdrawal of cancellation of GST registration within 30 days from the date of receipt of the cancellation order. To apply for withdrawal, the taxpayer must file an application in Form GST REG-21 on the GST portal and pay all the pending taxes and applicable interest.

What actions are required to reactivate the GST registration after cancellation?

A: If the tax authorities accept the application for withdrawal of cancellation, the registration will be reactivated, and the taxpayer will be required to file all the pending returns and pay the pending taxes and applicable interest. The reactivated registration will be effective from the date of cancellation of registration.

Can a taxpayer whose GST registration has been cancelled apply for a new registration?