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The GSTN has recently started sending out SMS to taxpayers informing them about discrepancies between the GST returns filed by them. According to the recent Notification 94/2020 dated 22nd December 2020, a new sub-rule 2A has been inserted in Rule 21A of the Central Goods and Services Tax (CGST) Rules. Any significant differences or anomalies observed between the GSTR-3B and the GSTR-1/2B could lead to suspension of GST registration. Further, if these differences remain unexplained, the GSTIN could get cancelled.
Besides, if the taxpayer has applied for cancellation, the tax officer can suspend the registration till cancellation proceedings are completed as per the provisions of new Rule 21A as introduced by notification 94/2020.
The government has come up with a new concept of suspension of GST registration. Rule 21A has been inserted into the CGST Rules 2019. With the introduction of this rule, a taxpayer who has applied for cancellation of GST registration will not be required to comply with GST return filing provisions during the suspension period.
The GSTIN of a registered person can be cancelled only by a proper officer if he has a reason to believe that the registration needs to be cancelled. The proper officer must give the registered person a reasonable opportunity of being heard and then follow the appropriate procedure for cancellation as mentioned under Rule 22 of the CGST Rules 2017.
During the period in which such cancellation proceedings are being carried out, the proper officer can suspend the registration.
Suspension of registration due to differences between GST returns:
Rule 21A(2A): A new sub-rule 2A has been inserted via notification 94/2020 which states that if a proper officer finds any discrepancies:
He can issue form GST REG-31 for intimating such discrepancies to the taxpayer. He will also mention that if a proper explanation is not provided on these discrepancies, the registration may get cancelled.
He can also suspend the registration as per Rule 21A(2A) with effect from the date of this communication to the taxpayer. Further, the proper officer can lift the suspension on receiving a satisfactory reply from the taxpayer.
This provision related to the suspension of GST registration till cancellation was welcomed by the taxpayers as it reduced the compliance burden of the taxpayers till the completion of cancellation proceedings.
The suspension of GST registration will be effective from the date the registered person has applied for the cancellation of GST registration. The effective date of suspension is the later of the following:
A person whose registration has been suspended:
The suspension of GST registration can be revoked after the completion of GST registration cancellation proceedings. The revocation of suspension of GST registration will be effective from the date the suspension has come into effect.
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