In this blog, we will take a look at what can be the reasons when the GST registration of a taxpayer can be suspended or canceled.
GST regulations offer a robust foundation for compliance. They are often changed to simplify the GST regime and make the law impartial for everyone. The GST registration of a taxpayer may be cancelled or suspended if they fail to follow the GST law or its related requirements.
To help you deal with this GST registration suspension scenario, let’s look more closely at the reasons and possible alternatives.
Reasons For Suspension of GST Registration
You as a taxpayer might be concerned about having your registration suspended or wondering why a GST registration could be cancelled. It should be noted, however, that no registration is terminated without good reason. Therefore, it is crucial to exercise extreme caution and keep an eye out for any potential reason for the termination of your GST Registration.
The following are a few reasons why your GST registration could be suspended:
1: In the event that your company’s organisational structure changes.
2: In the event that a company is dissolved, sold, merged, or closed.
3: If the taxpayer disregards the CGST Act’s rules, it might be suspended.
4: The taxpayer has the option to voluntarily request the termination of their registration, in which case the authorised officer suspends the GST.
5: The officer has the authority to suspend the registration if the GST registration was obtained fraudulently.
6: If it is discovered that the company is actually operating from a location other than the one specified, registration will also be suspended.
7: In accordance with GST regulations, if a firm is not launched within six months following GST registration, the registration may be cancelled or suspended.
8: If the taxpayer is discovered to have issued bills for services or items that have not been rendered
9: After issuing a warning, the registration may be suspended if the taxpayer fails to provide accurate bank account information.
10: If a member of the composition plan has spent three consecutive tax periods without submitting his returns.
11: In the event that a person conducting business who is not covered by the composite scheme hasn’t filed the returns for six months.
GST Registration Suspension
Only when there are valid reasons for the authorised authority to believe that the registration should be cancelled, can the registration be suspended. Before suspending the GST, the officer may provide a warning or give the offender a chance to make things right.
Form GST REG-31 is used to notify the taxpayer of discrepancies. The form also states that if the taxpayer does not offer a reasonable justification, GST may be cancelled. If the officer determines that the justification is insufficient or inadequate, he can nonetheless impose a suspension.
What Are The Consequences of GST Registration Suspension?
Once a taxpayer’s GST registration has been terminated, they are no longer eligible to make tax payments or submit GST returns.
It should be noted that if your GST registration has been cancelled or suspended and you come under the obligatory category of taxpayer, you must apply for a new GST registration. If this is the case, do not reapply for GST registration. Infringements of the GST laws will result in penalties from the GST authorities.
What To Do After Suspension Of GST Registration?
Here are some points to consider if the taxpayer has received a warning but has not voluntarily requested for cancellation of registration:
1: On receiving a notice for discrepancies
If a taxpayer receives a notice of discrepancies, he has one month from the date of receipt to provide the tax office with a response. The response should explain why the registration shouldn’t be cancelled as well as all the corrective activities and steps taken to address the non-compliances.
2: On receiving a notice of cancellation
Within one month of receiving the notification, the tax officer must get a response from the taxpayer using Form GST Reg 18 through the official GST portal.
3: Receiving a notice due to non-filling of returns
The most classic example is the non-filing of returns. If a notice of suspension or cancellation of registration is given for failure to file required returns, the person named in the notice must file all required returns and submit a response.
How To Activate Suspended GST Registration?
As a registered taxpayer, you have 30 days to request the reactivation of your GST registration in accordance with the applicable laws. However, this can only be done if the registration is suspended by an authorised GST officer. A registration that has been voluntarily suspended cannot ever be revoked. There is no denying that the suspension regulations offer some relief to taxpayers.
Although the government has simplified the procedure, it is still advisable to get expert assistance when restoring a suspended GST registration. You can avoid major hassles and stay in compliance while receiving potential remedies to cope with the suspension of your GST registration by consulting a top-tier legal service provider like Vakilsearch.
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Conclusion
In order to prevent abuse of the online system, the provisions controlling suspension of registration, particularly the most recent modifications, are created to offer the Government: https://www.gst.gov.in/ an instant remedy in the event of any irregularity or GST law infringement. Additionally, any additional violations by the defaulters are forbidden.
Although the rules offer some relief to the legitimate taxpayer who requests cancellation of registration, they are more favourable to the department because they give it a wide range of authority. If you are someone who does not have much experience of the legal formalities involved in the GST registration processes, then Vakilsearch can help you with the best in class legal service to make the process smooth & hassle-free for you.
Frequently Asked Questions
Who can suspend a GST registration?
A GST officer can suspend a GST registration. As per Rule 22 of the CGST Rules 2017, the registered person must be given the opportunity to present their case before the officer can proceed.
Will my GST registration get suspended for non-compliance immediately?
No, it will not be suspended immediately; you will receive a notice and an opportunity to respond.
What to do when my GST registration is suspended due to errors in GST form details?
Correct the errors in the form details and respond to the suspension notice. If required, get in touch with our experts.
What happens if I don’t submit a response to the GST suspension order?
Within 30 days of the date the cancellation order was issued, you have the chance to reply to a suspension or cancellation order. The suspension or cancellation order will take effect immediately if you don't provide an explanation and answer to it. Form GST REG 21 can be used to request the revocation of a GST cancellation.
What can I do to reinstate my GST registration?
You have the chance to reply to a suspension or cancellation order within 30 days of the date the cancellation order was issued. The suspension or cancellation order will take effect immediately if you don't provide an explanation and answer to it. Form GST REG 21 can be used to request the revocation of a GST cancellation.
What is the difference between cancellation and suspension of GST registration?
Suspension is temporary and can be lifted, whereas cancellation is permanent and requires a new application for reinstatement.
How will I know if my GST is suspended?
On the GST Portal, the status of the GSTIN for which cancellation is requested will be displayed as ‘Suspended.’ In the case of GST REG 16 and GST REG 17/08, the generation of an ARN and a Reference Number is associated with the state of suspension.
Can I reinstate GST registration cancellation?
No, once cancelled, you must apply for a new GST registration.
Can I continue running my business if my GST registration is suspended?
No, you cannot legally continue business operations if your GST registration is suspended.
What if I disagree with GST registration suspension?
You can appeal the suspension by providing a valid justification to the GST authorities.
