24/12/2020
เดเตเดฑเตเดฃ เดชเตเดฐเดคเดฟเดธเดจเตเดงเดฟ เดฎเตเดฒเดฎเต เดฎเดฑเตเดฑเต เดเดพเดฐเดฃเดเตเดเตพ เดเตเดฃเตเดเต เดเดฐเตเดชเดพเดเต เดฌเดฟเดธเดฟเดจเดธเตโ เดธเตเดฅเดพเดชเดจเดเตเดเดณเตเดเต GSTR-3B เดเตเดคเตเดฏเดฎเดพเดฏเดฟ เดซเดฏเตฝ เดเตเดฏเตเดฏเดพเดคเตเดคเดคเต เดฎเตเดฒเด GST Registration Cancel เดเตเดฏเตเดฏเตเดจเตเดจ เดธเดพเดนเดเดฐเตเดฏเด เดเดฃเตเดเดพเดเตเดจเตเดจเตเดฃเตเดเต.....เด
เดคเต เดเดดเดฟเดตเดพเดเตเดเดพเดจเดพเดฏเดฟ เดคเดพเดดเต เดชเดฑเดฏเตเดจเตเดจ เดตเดฟเดตเดฐเดเตเดเตพ เด
เดฑเดฟเดเตเดเดฟเดฐเดฟเดเตเดเตเด.. ๐๐๐
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Cancellation of registration by GST authorities, When can GST Registration be suspended or cancelled by GST Authorities? and what is way Forward.
When can GST Registration be suspended or cancelled by GST Authorities?
Section 29(2) of the CGST Act empowers the proper officer to cancel the registration of a person from such date, including any retrospective date, as he may deem fit in the following scenarios:
a. contravention of certain prescribed provisions of the CGST Act or the rules made thereunder; or
b. non-furnishing returns for three consecutive tax periods by a composition dealer; or
c. non-furnishing returns for a continuous period of six months tax periods, by a person other than a composition dealers; or
d. non-commencement of business within six months from the date of registration by a person opting for voluntary registrationu/s 25(3); or
e. where the registration has been obtained by means of fraud, wilful misstatement or suppression of facts.
The proviso to Section 29(2) provides that the proper officer shall not cancel the registration without giving the person an opportunity of being heard, however he may suspend the registration during the pendency of the proceedings related to cancellation of registration.
Further, Rule 21 of the CGST Rules prescribes that the registration granted to a person is liable to be cancelled, if the said person:
a. does not conduct any business from the declared place of business; or
b. issues invoice or bill without supply of goods or services; orc. violates the provisions of Antiprofiteering mechanism; ord. does not furnishes its bank account details on the GST Common Portal
Further, Rule 21A(2) provides that where the proper officer has reasons to believe that the registration of a person is liable to be cancelled under section 29 or under rule 21, he may, after affording the said person a reasonable opportunity of being heard, suspend the registration of such person with effect from a date to be determined by him, pending the completion of the proceedings for cancellation of registration under rule 22.
Rule 22 provides for the procedure for cancellation of registration. It requires the proper officer, upon having reasons to believe that the registration of a person is liable to be cancelled u/s 29, issue a notice in Form GST REG-17 to the registered person, requiring him to show cause within a period of seven working days from the date of the service of such notice, as to why his registration shall not be cancelled. The reply to the said show cause notice is to be furnished by the said registered person in Form REG-18 within the prescribed time limit.
The proper officer shall drop the proceedings u/s 29 if the reply filed by the registered person is found to be satisfactory. It is to be noted that since what would qualify as satisfaction of the proper officer in such a case is not defined anywhere in the GST Law, a certain discretion may be exercised by the officers.
Where the notice for cancellation of registration is on account of non filing of returns, the said proceedings would be dropped by the proper officer where the registered person furnishes all the pending returns and makes full payment of the tax dues along with applicable interest and late fee.
Way Forward
1. A registered person should ensure that the latest particulars of its principal place of business and all the additional places of business in a state are updated in its registration certificate. Any change in place of business should be immediately updated by filing the relevant forms on the GST Portal. Where the same cannot be updated due to any reason, an intimation to that effect should be made to the jurisdictional officer to ensure that the events as transpired in the Cloudtail matter are not repeated.
2. Strict adherence should be made to the due dates of filing of GST Returns. Further, in no circumstance whatsoever, shall returns be allowed to remain pending for a consecutive period of 6 months/ 3 tax period as applicable.
3. Due to the business disruptions caused by Covid-19, it is possible that certain businesses are unable to generate funds to pay the taxes and file their respective returns. In such a situation, an application for payment in installments can be made. The Kerala HC has allowed relief in such cases.
4. Where any person receives Show Cause Notice for cancellation of registration, such person should check whether:
a. The SCN has been uploaded on the GST Portal; and
b. The violation for which cancellation of registration is properly mentioned; and
c. An opportunity of being heard has been provided to the registered person Where any of the above mentioned conditions is not met, the SCN is bad in law and void ab initio.
5. In all other cases, the reply to the said SCN shall be filed within the prescribed time in the prescribed form on the GST Portal giving out reasons as to why the registration shall not be liable for cancellation.
6. At times it may happen that adverse orders in such matters related to cancellation are passed without appreciating the facts of the case. In such cases, the impugned orders need to be challenged in the appropriate forums. Recently in a similar matter, the Allahabad HC has criticized the callous attitude of revenue authorities in exercising quasi-adjudicatory functions.
7. As suspension/ cancellation of registration of a key vendor or customer can have serious repercussions against any business, specific clauses should be negotiated in all vendor/ customer contracts to provide indemnity against any loss caused due to such suspension/ cancellation.
