Suo Moto Cancellation of GST Registration – Meaning, Process & Revocation under GST

When Can a Tax Officer Initiate Suo Moto Cancellation of GST Registration?

Suo Moto Cancellation of registration may be initiated by the Tax Official for various situations as mentioned in the provisions of GST law like: -

• Any Taxpayer other than composition taxpayer has not filed returns for a continuous period of six months
• Supplies any goods and / or services without issue of any invoice, in violation of the provisions of the Act or rules made thereunder, with the intention to evade tax
• Issues any invoice or bill without supply of goods and/or services in violation of the provisions of this Act, or the rules made thereunder leading to wrongful availment or utilization of input tax credit or refund of tax
• Collects any amount as representing the tax but fails to pay the same to the account of the Central/State Government beyond a period of three months from the date on which such payment becomes due
• Fails to pay any amount of tax, interest or penalty to the account of the Central/State Government beyond a period of three months from the date on which such payment becomes due
• Person is no longer liable to deduct tax at source as per the provisions of GST Law
• Person is no longer liable to collect tax at source as per the provisions of GST Law
• Person no longer required to be registered under provisions of GST Law
• GST Practitioner is found guilty of misconduct in connection with any proceeding under the GST Law.
• Discontinuation/Closure of Business
• Change in Constitution leading to change in PAN
• Ceased to be liable to pay tax
• Transfer of business on account of amalgamation, merger/demerger, sale, lease or otherwise disposed of etc.
• Death of Sole Proprietor
• Composition person has not furnished returns for three consecutive tax periods,
• Registration has been obtained by means of fraud, willful misstatement or suppression of facts. Etc.

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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.

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What will happen once Registration is cancelled?

• Once registration is cancelled by the Tax Authority, the taxpayer will be intimated about the same via SMS and Email. Order for Cancellation of Registration will be issued and intimated to the Primary Authorized Signatory by Email and SMS.
• Order will be made available on taxpayer’s dashboard to view, print and download.
• Status of the GSTIN/UIN/GSTP ID from ‘Proceeding for Cancellation initiated’ to ‘Inactive’ and will be intimated to the other concerned Tax Authority.
• Taxpayer would not be allowed to file return or upload invoices for the period after date of cancellation mentioned in the cancellation order. Also, GSTP will not be able to carry out GSTP functions for any Taxpayer for the period after the date of cancellation mentioned in the cancellation order.
• Taxpayer will not be able to amend registration details after issuance of cancellation order. However, email address and mobile number can be updated till dues/ refund are cleared. The facility to file application for revocation (if applicable) will be open for the Cancelled Registration.

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How to Reactivate 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.

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How to Avoid Suo Moto Cancellation of GST

Suo Moto cancellation of GST registration happens when the tax officer cancels your registration on their own due to certain reasons. Here's how you can avoid it:

File Your GST Returns Regularly:

• Non-filing of returns is a major reason for Suo Moto cancellation. If you're a regular taxpayer, ensure you file GSTR-1 and GSTR-3B monthly. Composition taxpayers should file GSTR-4 annually.
• Maintain accurate records of your sales and purchases to avoid errors in your returns.

Follow GST Laws and Regulations:

• Do not engage in activities that violate GST laws, such as issuing fake invoices, tax evasion, or fraudulent activities.
• Ensure accurate details are provided in your registration application. Any misleading information can lead to cancellation.

Respond to Notices and Communications:

• If you receive a show cause notice from the tax officer, respond to it promptly and provide all necessary clarifications and documents within the given time frame.
• Ignoring notices can lead to cancellation of your registration.

Maintain Accurate Records:

• Keep proper records of all your business transactions, including invoices, bills, and other relevant documents.

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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.

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