Q: My GST registration is cancelled by GST department. What could be the possible reasons?
A: The order for cancellation of registration communicated by officer in Form REG-19. Once the GST number is cancelled the status of GST number reflects as Inactive. The order will reflect on your GST portal. Further, you need to log in at GST portal and check for earlier notice(s) served by GST officer. The proper officer before cancellation of GST registration will give you opportunity of being heard in Form REG-17 as per Section 29(2) of CGST Act.
The reasons of GST cancellation could be one or more out of following:
- Contravention of GST Act or rules by you.
- Non filing of three GST returns of three tax periods for composition dealer.
- Non filing of GST returns for six months for other dealers.
- Taken voluntary registration but business not commence within six months from date of registration.
- Fraud, willful misstatement, etc. while taking registration by dealer.
Q: How to reply GST REG-17 show cause notice for cancellation of registration.
A: Such notice is given to you for giving you the opportunity of being heard before the cancellation of GST registration. Reply of such notice should be submitted online on portal in Form REG-18 within seven working days from the date of service of notice. It is recommended that one should personally present the case to concerned GST officer along with the online submission against the notice.
Q: In case one misses to reply above notice in seven days or the reply submitted doesn’t addresses the concerns raised by officer, what will be the consequences?
A: The officer will decide next course of action on the basis of available records and facts with him. In most probable chances, he will issue GST cancellation notice in Form REG-19 as stated in above query.
Q: What are the implications of cancellation of GST registration?
A: The main implications are listed as under.
- You need to pay all the GST liabilities alongwith interest.
- You cannot claim GST input and you need to reverse all the GST input, proportionately reverse GST of capital goods as per life of asset
- You can’t issue tax invoices or charge GST from customers after the cancellation date.
- You are required to file Final return within three months of date of cancellation of GST registration as per Section 45 of CGST Act.
Q: How can I apply for reactivation of cancelled GST registration?
A: One needs to apply for revocation of GST cancellation within 30 days of from the date of service of cancellation order to proper office in Form 21. It is a must to file all the pending GST returns in case the cancellation was due to non-furnishing of returns. There is no statutory fee for applying for revocation of cancelled GST registration.
The applicable tax, interest and penalty needs to be discharged off before submission of revocation application. The period of 30 days is very limited time and aggrieved needs to act swiftly to be able to apply for reactivation.
It is recommended to visit the range office to meet the officers of the rank of AC/JC and explain the case.
Q: What would be next process after submission of revocation application?
A: The proper officer will examine the revocation application and may restore the GST registration and pass order in REG-22 within one month. In case the proper officer is not satisfied with the reasons of revocation filed, he may reject the revocation application after giving opportunity of being heard in Show cause notice Form GST REG-23 to the applicant. Applicant needs to file reply against the show cause notice in Form REG-24 within seven working days.
Q: In case the GST registration has been cancelled even after above efforts, what is the next resort available to taxpayer / aggrieved dealer?
Any such aggrieved person can appeal to GST appellate authority within three months of communication of such order as per Section 107 of CGST Act in Form GST APL-01. Appeal needs to be filed in manual mode. The appeal application should properly mention statement of facts, grounds of appeal and prayer.
Q: Are there any other conditions to be met apart from above time limits, before submitting Appeal application?
A: Yes, the appellant needs to pay the admitted amount of tax, interest and penalty in full and ten percent of disputed amount. This will also deemed to be grant of stay for balance tax payable.
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Saurabh Gupta is a practicing Chartered Accountant having qualified post qualification course in “Master in Business Finance” from ICAI. He has over 15 years of experience in finance and accounts domain. He specializes in strategic planning and implementation, financial control, fund raising, transfer pricing audits, tax planning & statutory compliances. He is having versatile corporate experience in retail sector and has worked in financial controller role with DLF Brands prior to joining practice.