Cancellation or Suspension of Registration in GST [ Section 29 ] - GST Ready Reckoner - GST

Cancellation or Suspension of Registration in GST Introduction: The registration granted under GST can be cancelled for specified reasons. The cancellation can either be initiated by The department on their own motion; or; The registered person can apply for cancellation of their registration. In case of death of registered person, the legal heirs can apply for cancellation. Reason for cancellation ( Section 29 of the CGST Act ) The registration can be cancelled for the following reasons: 1) Voluntary Cancellation of Registration :- Registration Certificate may be cancelled based, either on his own motion or on an application filed by the registered person or by his legal heirs, in case of death of such person, cancel the registration (a) The business has been Discontinued, or transferred fully for any reason including death of proprietor, or amalgamated with other entity, or demerged or otherwise disposed off. (b) There is any change in the constitution of the business (c) The taxable person other than the registered person having voluntary registration under section 25(3), is no longer liable to be registered under section 22 or section 24 . [Substituted vide Finance Act, 2020 dated 27-03-2020 ]. 2. Cancellation by Proper Officer (may be cancelled from any retrospective date, subject to providing opportunity of being heard) [ Rule 21 ] does not conduct any business from the declared place of business; issues invoice or bill without supply of goods or services or both in violation of the provisions of the Act, or the rules made thereunder; violates the provisions of section 171 (Anti-profiteering) of the Act or the rules made thereunder. avails input tax credit in violation of the provisions of section 16 of the Act or the rules made thereunder; furnishes the details of outward supplies in FORM GSTR-1 , [as amended in FORM GSTR-1A (Inserted vide N.N. 12/2024 dated 10.07.2024) ] under section 37 for one or more tax periods which is in excess of the outward supplies declared by him in his valid return under section 39 for the said tax periods; being a registered person required to file return u/s 39 for each month or part thereof, or for each quarter or part thereof has not furnished returns for a continuous period of six months or two tax quarter. a person paying tax under section 10 has not furnished the return for a financial year beyond 3 months from the due date of furnishing the said return. any person who has taken voluntary registration has not commenced business within six months from the date of registration; registration has been obtained by means of fraud, willful misstatement or suppression of facts. violates the provisions of third or fourth proviso to rule 23(1); [Inserted vide N.N. 12/2024 dated 10.07.2024] violates the provision of rule 86B . if during pendency of the proceedings relating to cancellation of registration, the proper officer may suspend the registration for such period and in such manner as may be prescribed under rule 21A . There are significant differences or anomalies indicating contravention of the provisions of the Act or the rules made thereunder, leading to cancellation of registration of the said person in the following cases a) Where; a comparison of the returns furnished by a registered person under section 39 with the details of outward supplies furnished in FORM GSTR-1, [as amended in FORM GSTR-1A (Inserted vide N.N. 12/2024 dated 10.07.2024) ] ; or the details of inward supplies derived based on the details of outward supplies furnished by his suppliers in their FORM GSTR-1, [as amended in FORM GSTR-1A (Inserted vide N.N. 12/2024 dated 10.07.2024) ] or such other analysis, as may be carried out on the recommendations of the Council. b) Violates the provision of rule 10A , regarding furnishing bank details with in 30 days, after granting registration certificate, c) The registration of such person shall be suspended and the said person shall be intimated in FORM GST REG-31 , electronically, on the common portal, or by sending a communication to his e-mail address provided at the time of registration or as amended from time to time, highlighting the said differences, anomalies or non-compliances and asking him to explain, within a period of 30 days, as to why his registration shall not be cancelled. [ Rule 21A(2A) ] 3) Suspension of Registration During pendency of the proceedings relating to cancellation of registration, the proper officer may suspend the registration for such period and in such manner as may be prescribed under rule 21A of GST Rules. [Inserted vide CGST(Amendment) Act, 2018 w.e.f. 01-02-2019]. Registration may be suspended in the following circumstances:- Where registered person has applied for cancellation of registration under rule 20 , the registration shall be deemed to be suspended from the date of application, or the date from which the cancellation is sought, whichever is later. [ Rule 21A(1) ] Where proper officer has reasons to believe that the registration of person is liable to be cancelled under section 29 or rule 21 , he may suspend the registration of such person w.e.f. a date to be determined by him, pending the completion of the proceeding for cancellation of registration under rule 22 . [ Rule 21A(2) ] Rule 21A(2A) state that, there are significant differences or anomalies indicating contravention of the provisions of the Act or the rules made thereunder, leading to cancellation of registration of the said person in the following cases a) Where; a comparison of the returns furnished by a registered person under section 39 with the details of outward supplies furnished in FORM GSTR-1, [as amended in FORM GSTR-1A (Inserted vide N.N. 12/2024 dated 10.07.2024) ] ; or the details of inward supplies derived based on the details of outward supplies furnished by his suppliers in their FORM GSTR-1,[as amended in FORM GSTR-1A (Inserted vide N.N. 12/2024 dated 10.07.2024) ] or such other analysis, as may be carried out on the recommendations of the Council. b) Violates the provision of rule 10A , regarding furnishing bank details with in 30 days, after granting registration certificate, c) The registration of such person shall be suspended and the said person shall be intimated in FORM GST REG-31 , electronically, on the common portal, or by sending a communication to his e-mail address provided at the time of registration or as amended from time to time, highlighting the said differences, anomalies or non-compliances and asking him to explain, within a period of 30 days, as to why his registration shall not be cancelled. Restrictions/obligation of the taxpayer during period of suspension Registered person shall not required to furnish any return u/s 39 and Registered person shall not make any taxable supply during the period of suspension. [ Rule 21A (3) ] Registered person shall not be granted any refund u/s 54 during the period of suspension of his registration. [ Rule 21A(3A) ] 4 ) Revocation of suspension of registration [ Rule 21A(4) ] The suspension of registration under Rule 21A(1) or (2) or (2A) shall be deemed to be revoked upon completion of the proceedings by the proper officer under rule 22 and such revocation shall be effective from the date on which the suspension had come into effect. Exceptions The suspension of registration under this rule may be revoked by the proper officer, anytime during the pendency of the proceedings for cancellation, if he deems fit. Where the registration has been suspended under rule 21A(2A) for contravention of the provisions contained in section 29(2)(c) or (b) and the registration has not already been cancelled by the proper officer under rule 22, the suspension of registration shall be deemed to be revoked upon furnishing of all the pending returns. Where the registration has been suspended under rule 21(2A) for contravention of provisions of rule 10A and the registration has not already been cancelled by the proper officer under rule 22, the suspension of registration shall be deemed to be revoked upon compliance with the provisions of rule 10A. Where any order having the effect of revocation of suspension of registration has been passed, the provisions of Section 31(3)(a) and section 40 in respect of the supplies made during the period of suspension and the procedure specified therein shall apply. [ Rule 21A(5) ] 5) Other provisions relating to the cancellation The cancellation of registration under SGST Act, or as the case may be, the UTGST Act shall be deemed to be a cancellation of registration under CGST Act and vice versa. The cancellation of registration shall not affect the liability of any person to pay tax or other dues/obligations for any period prior to the date of cancellation. Such tax/dues were determined prior to date of cancellation of registration of after cancellation do not affect such liability to pay. Cancellation in case of voluntary registration: With the omission of Proviso to Rule 20 vide N/N. 03/2018-CT dated 23.01.2018, w.e.f. 23 Jan, 2018 , such person could submit the application for cancellation at any time after the date of registration.