In the article entitled ‘Cancellation of registration under GST’ published on 04.05.2018 in the TMI discusses the general procedure for cancellation of registration by the tax officers, revocation of cancellation of registration. In this article the detailed procedure on the cancellation of registration suo motu by tax officials of a registered person, as provided in the GST website.

Initiation of cancellation of registration

The tax officials may initiate suo motu cancellation of registration of a registered person under GST provisions under the following circumstances-

•  Failure to furnish Application for Enrollment within 3 months from the appointed day or such extended period specified;
• 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 there under, 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 there under 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.,

Pre-condition for suo motu cancellation

There shall be valid reason among the above for the initiation for suo motu cancellation of registration.

Show cause notice

The certificate of registration cannot be cancelled by the tax officials unless the registered person is given reasonable opportunity of being heard. A show cause notice is to be issued in this regard by the tax official by the proper officer to submit the clarifications/reply by the registered person.

The registered person can view navigate to Services > User Services > View Notices and Orders to view the Show Cause Notice regarding suo motu Cancellation of Registration.

The registered person should provide response to the show cause notice as viewed above within the prescribed time limit of seven working days. The response may be given using the Services > Registration > Application for Filing Clarifications link.

Personal hearing

The proper officer on submission of reply will fix the hearing the date for giving the opportunity to the registered person for hearing. The registered person is to navigate to Services > Registration> View Notices and Orders to view the Show Cause Notice regarding suo motu Cancellation of Registration. The notice may be downloaded to view the personal hearing date.

Ex-parte order

If no response is given within prescribed 7 working days, the Tax Official can proceed with Cancellation of registration.

Dropping of show cause notice

In case the Tax Official is satisfied with the response received from the taxpayer, on the Show Cause Notice issued, the proceedings can be dropped. The same may be intimated as detailed below-

• Primary Authorized Signatory will be intimated about dropping of SCN by SMS & Email.
• Issuance of Order for dropping of SCN will also be intimated to the Primary Authorized Signatory by Email and SMS.
• Order will be made available on the taxpayer’s dashboard to view, print and download.
• Status of GSTIN will change from “Proceeding for Cancellation Initiated” to “Active”.

Cancellation of registration

If the proper officer is not satisfied with the response provided by the registered person he may order for cancellation of registration. The registered person whose registration is cancelled is to navigate to Services > User Services > View Notices and Orders to view the order regarding suo motu Cancellation of Registration.

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.

The registered person whose registration is cancelled can login to the GST Portal after suo motu cancellation of registration. He can submit returns of the earlier period (i.e. for the period before date of cancellation mentioned in the cancellation order), after suo moto cancellation of registration. However, he will not be allowed to file return or upload invoices for the period after date of cancellation mentioned in the cancellation order. Also, GST Practitioner will not be able to carry out GSTP functions on his behalf for the period after the date of cancellation mentioned in the cancellation order.

Liability

Any liabilities prior to the date of suo moto cancellation will have to be paid by the taxpayer, irrespective of the fact that when determination of liabilities are done. Any liability which is related to that particular GSTIN is required to be paid by the taxpayer. It can be recovered later on even after the cancellation of GSTIN.

Cancellation under other Act

Cancellation of registration under the CGST Act or SGST/UTGST or IGST Act shall be deemed to be a cancellation of registration under SGST Act / UTGST Act or CGST Act respectively and vice versa.

Source: www.gst.gov.in