Suo moto cancellation of GST registration refers to the cancellation of GST registration under the GST Act by the tax officer in his motion. However, it is mandatory for the GST officer to provide valid reasons for initiating such suo moto cancellation under section 29(2) of the CGST Act. This guide covers all that you need to know about suo moto cancellation of GST registration.
What are the Pre-conditions for Suo Moto Cancellation?
Suo moto cancellation proceedings can be initiated upon the fulfillment of any one of the below-mentioned conditions -
If the business has been registered through fraud, misrepresentation, or suppression of facts.
If the taxpayer fails to apply for GST enrolment within 90 days of the appointed date.
If the taxpayer has not filed his returns for 6 months consecutively and for 3 consecutive months in the case of composition taxpayers.
The taxpayer has supplied goods or services without issuing an invoice, thus violating the provisions of the CGST Act and evading taxes.
If the taxpayer fails to deposit the tax collected with the treasury within 90 days.
If the taxpayer fails to deposit, interest, tax, or penalties to the government within 90 days.
If there is misconduct during the proceedings under the GST Act.
If a person is not liable or ceases to be liable deduction or collection of taxes.
If the sole proprietor of a sole proprietorship business dies.
In case of amalgamation, merger, demerger, and transfer of a business.
Change in the constitution that leads to a change in PAN.
If the business discontinues or closes.
What is the Procedure for Suo Moto Cancellation of GST Registration?
As per the GST law, the tax officer has to present a show-cause notice to the taxpayer and provide him/her with the opportunity to be heard. In response to the show-cause notice, the taxpayer has to explain the reason why the GST registration should not be canceled within 7 days of receiving the notice.
If the tax officer is satisfied with the taxpayer’s response, he/she can drop the cancellation proceedings and intimate the same to the taxpayer through e-mail or SMS.
If the taxpayer fails to respond to the notice within 7 days or the GST officer is not satisfied with the explanation, he/she can proceed with the suo moto cancellation of GST registration.
How to Activate Cancelled Suo Moto GST Registration?
Given below are the steps that you need to follow to activate the cancellation of Suo Moto GST registration -
Go to the GST portal
Enter the login credentials in the GST portal.
Click on ‘services’ on the dashboard. Then select registration > application for revocation of canceled registration option.
Enter the reasons for revocation and attach the necessary documents.
Select the authorized signatory and click on ‘submit’ to apply.
If the GST officer is satisfied with the justification filed, he/she can withdraw the cancellation order.
The GST officer shall do this within 30 days of receiving the application for revocation.
After the GST officer signs an order in Form GST REG-22, the assessee will be considered an active assessee and all the accesses provided to the assessees will be enabled.
The taxpayer’s profile and the registration certificate will also be updated.
What will be the Effect of Suo Moto GST Registration Cancellation?
The status of GSTIN will change from ‘proceeding for cancellation initiated’ to ‘inactive’.
Once the cancellation date is specified on the cancellation order, the taxpayer will not be able to file a return or issue invoices after that.
After issuing the cancellation order, the taxpayer cannot change the registration details. However, details like mobile number and email can still be updated until the payment of debt or refund.
Understanding the intricacies of suo moto Cancellation of GST Registration is crucial for businesses to comply with the GST Act. The process involves a detailed procedure where the taxpayer has the opportunity to respond to a show-cause notice. The activation of canceled Suo Moto GST registration demands a systematic approach through the GST portal. The consequences of the cancellation are significant. Therefore, it is a good idea to seek help from professional tax experts.
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