GST Return Filings

How does Suo Moto GST Cancellation work

Suo moto cancellation of a GST registration refers to the tax officer's decision to terminate a GST registration. Read on to learn all about Suo Moto GST cancellation in this blog.

When registration for the Goods and Services Tax (GST) is canceled suo moto, it means at the tax officer’s own initiative. To start the cancellation proceedings, the tax officer must have a good cause as defined by Section 29(2) of the CGST Act.

Reasons for Suo Moto GST Cancellation

Suo Moto The officer may initiate the cancellation of registration for any of the grounds listed in the GST law’s provisions, such as:

  • Without issuing an invoice, or providing any goods or services to avoid paying taxes.
  • Any taxpayer who isn’t a composition taxpayer and who hasn’t filed any returns for a continuous six months
  • The dealer in compositions has not provided returns for three consecutive tax periods.
  • Issues any invoice or bill without supply of goods and/ services in violation of the GST law leading to wrongful availment or utilization of input tax credit or refund of tax.
  • Regardless of the amount, collects tax but fails to pay it to the federal or state government within three months of the date the payment is due.
  • Refuses to reimburse the Central or State Government for any taxes, interest, 

or penalties within three months of the date that they become due.

  • No longer necessary for a person to be GST registered
  • A GST Practitioner is found to have violated the GST Law in connection with any proceeding.
  • Business discontinuation or shutdown Constitutional change resulting in PAN change

ceased to be subject to taxation

  • A business that is sold, leased, combined with another business, or otherwise disposed of.
  • Death of Sole Proprietor 
  • Registration was obtained through deception, deliberate false statements, or the omission of information. Etc.

How will the taxpayer be informed about Suo Moto Cancellation under GST?

The taxpayer will receive notification of this by email and SMS. The primary authorized signatory will get an email and SMS containing an order to revoke the GST registration.

The order will be made viewable, printable, and downloadable on the taxpayer’s dashboard.

The Opportunity of Being Heard

Registration cannot be revoked without providing the taxpayer with a Show Cause Notice (SCN) and a reasonable opportunity to be heard by the officer. 

Thus, the Tax Official must serve the taxpayer with an SCN before Suo Moto cancellation proceedings take place. Officials will be asking why his/her registration should not be canceled.

What Effects would the Cancellation of Suo Moto have?

  • The status of the GSTIN/UIN/GSTP ID will change from “Proceeding for Cancellation initiated” to “Inactive,”  and the other relevant Tax Authority will be informed.
  • After the cancellation date specified in the cancellation order, the taxpayer will not be able to file the return or upload invoices during that time.
  • Following the issuance of the cancellation order, the taxpayer will not be able to change the registration details. Email and mobile numbers, however, can still be updated up until the time that the debt or refund is paid.

The facility to apply for revocation will be available for the canceled registration.

After getting a notice of cancellation, what choices does the taxpayer have?

7 working days from the date of receipt of the Show Cause Notice, the Taxpayer must respond within the statutory time frame (SCN).

If the officer is satisfied with the taxpayer’s response,

  • Proceedings may be terminated.
  • By SMS and email, the primary authorized signatory will be informed that SCN has been dropped.
  • Order will be made accessible to the taxpayer’s dashboard for viewing, printing, and downloading.
  • GSTIN’s “Suspended” status will become “Active.”

The official may continue with the cancellation of registration if no response is provided within the allotted 7 working days.

What Actions are Permitted on the GST portal after the Suspension of the GSTIN?

When a taxpayer requests to have their registration canceled or When a Suo Moto cancellation has been started by the Tax Officer, the status of the GSTIN will show as “Suspended”.

A taxpayer can carry out the following actions on the GST website after GST is suspended:-

  • Filing of appeal
  • Making payment
  • Filing for refunds
  • Only for the time frame before the registration suspension may you file a return or upload invoices.
  • Response to orders/notices related to assessment/recovery/enforcement/related matters, non-core amendment, etc.

When does the suspension of the GST take effect?

If a taxpayer requests to have their registration canceled. The date that their registration was suspended is the day that their cancellation request was submitted.

The date of suspension will be the date on which SCN for cancellation of registration is issued if Suo Moto GST Cancellation has been initiated by the GST officer.

Can earlier period returns be filed after a Suo Moto cancellation of the GST registration?

After Suo Moto GST Cancellation, returns for the prior period. it should be done before the cancellation date specified in the cancellation order) may be filed. 

The taxpayer will not, however, be permitted to submit returns or upload invoices for the period.

following the cancellation date specified in the cancellation order. 

Additionally, GSTP will not be able to perform GSTP duties on your behalf for a certain amount of time following the cancellation date specified in the cancellation order.

How can the GSTIN’s “Suspended to Active” status be changed?

Only when the officer denies the application for cancellation of registration or when the Suo Moto cancellation process is abandoned after a hearing will the GSTIN’s status change from “Suspended” to “Active.”

A taxpayer will once again be treated as an active taxpayer and will have immediate access to all of the features provided to active taxpayers on the GST Portal once the status of his GSTIN is changed from “Suspended” to “Active.”

Conclusion

We hope that after reading the information above, one has a better understanding of how the Suo Moto GST Cancellation works.

For more information you can contact Vakilsearch, their legal professionals with decades of experience can help you in any legal matter.

FAQs

 

  1. Where can one find the show cause notice for the registration cancellation?

To read any show-cause notice issued for Suo Moto cancellation of registration, click on Services > User Services > View Notices and Orders.

  1. After the Suo Moto revocation of the GST registration, what adjustments can be made to the GST portal?

Only information about the taxpayer’s mobile number and email ID can be changed.

  1. After the registration was canceled, would taxpayers be able to file returns for a previous period?

Yes. The taxpayer would be eligible to submit returns for periods before the registration’s suo moto cancellation date. 

However, it should be noted that for some time following the date of registration cancellation specified in the cancellation order, the taxpayer will not be allowed to file returns or upload invoices.

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