Suo moto cancellation of GST registration

Suo moto cancellation of GST registration means cancellation of registration under GST laws by the tax officer on his motion. However, the provisions of Section 29(2) of the CGST Act mandate that the officer provides his reasons for initiating such suo moto cancellation of registration.

Condition to be satisfied for suo moto cancellation of GST registration

Suo moto cancellation by the tax officer can be initiated if any one of the following conditions is satisfied:

1. The taxpayer has registered their business through fraud, suppression or misrepresentation of facts.
2. The taxpayer has failed to apply for GST enrolment within 90 days from the appointed date or any such extended date as may be prescribed.
3. The taxpayer has failed to file returns for six months consecutively. The criteria for filing returns is three months in the case of a composition taxpayer.
4. The taxpayer has indulged in supplying goods or services without the issue of an invoice in violation of the provisions of the CGST Act to evade taxes. 
5. It is observed that the taxpayer has issued an invoice without a supply of goods or services, thereby again violating the provisions of the Act to evade input tax credit or get a refund of tax.
6. Failure to deposit taxes collected with the treasury within 90 days.
7. Failure on the taxpayer’s part to pay taxes, interest or penalty to the government within 90 days.
8. Display of misconduct during any proceedings under the GST Act.
9. It is observed that a person is not liable or has ceased to become liable for deduction or collection of taxes under GST laws.
10. If the business constitution is a sole proprietorship, upon the death of the sole proprietor.
11. In the event of amalgamation, transfer, merger, demerger and the like of a business.
12. If there is a change in the constitution that leads to a change in PAN
13. In the event of discontinuation of closure of business

Procedure to be adhered to for suo moto cancellation

• GST law mandates that the tax officer serves show-cause notice to the taxpayer, providing him with an opportunity of being heard. The taxpayer, in response to the show-cause notice, needs to explain why the registration should not be cancelled. The taxpayer is bound to respond to this notice within seven working days.
• Basis the response received, the tax officer can choose to either drop the cancellation proceedings initiated if he is satisfied with the response provided, and the same would be intimated to the taxpayer by SMS or e-mail.
• If no response is received from the taxpayer within seven working days or the tax officer is not satisfied with the response received from the taxpayer, he can go ahead cancelling the registration.

Frequently Asked Questions

Where can one view the show cause notice relating to the cancellation of registration?

One could go to Services > User Services > View Notices and Orders to view any show-cause notice issued for suo moto cancellation of registration.

What is considered to be the effective date of GST suspension?

If the taxpayer himself has applied for cancellation of registration, the date of suspension would be the date on which the application for revocation was filed. In case the officer has initiated the cancellation, the date of issue of show cause notice is considered the effective date of suspension.

What changes can be carried out on the GST portal after suo moto cancellation of GST registration?

Only details relating to e-mail ID and taxpayer’s mobile number can be updated.

Would taxpayers be allowed to file returns for an earlier period after the cancellation of registration?

Yes. The taxpayer would be able to file returns for periods before the date of suo moto cancellation of registration. However, one may note that the taxpayer would not be permitted to file returns or upload invoices for a period falling after the date of cancellation of registration mentioned in the cancellation order. Further, the taxpayer has to file GSTR-10 within three months from the date of cancellation of registration of GST or from the date of issue of GST order, whichever falls earlier.

Can taxpayers submit an application for cancellation of registration in a case where suo moto cancellation of registration is already initiated?

No such application can be made once suo moto cancellation by tax officer is initiated.