Non existance of principal place of business, Goods and Services Tax - GST

[bk r]

I am registered with GST Haryna having a principal place of business at A with additional place of buisness at B . The additional place of business was earlier registered with the Central Excise as Registered dealer and we take handsome amount as transitional credit in respect of purchase made by Additional place of business. The department asked telephonicaly to submit the record we submit all the documents regarding stock receipt and invoices regarding puchase of material in respect of additional place of business. There is no physical business activity at the principal place of business and only documents kept here and file return . the business is now being done from additional place of business i.e. from B only. we never done business from principal place of business nor issued invoice from this place . The Central Excise official visited my principal place of business in March 2018.and found that the plot No registered as principal place of business is a vacant plot . This is fact as I vacated the same as the owner want to dismental that building and he dismental the same in August 17. As on date there is no construction on this plot. I kept all the record at my house situated . Department has issued SCN regarding cancellation of registration w.e.f. 01/07/2017 and also proposing disallowing of Trans 1 credit availed and other ITC availed during July to March 2018 in respect of additional place of business,as they proposed cancellation w.e.f. 01/07/2017. there is no activity at the principal place of business. Whether the department action for cancellation of registration w.e.f. 01/07/2017 is correct and proposal regarding recovery of Trans 1 credit and other ITC availed during 01/07/2017 to March 2018 is also correct. My additional place of business is working at the declared place. whether it is necessary to have premises for principal place of business when there is no physical business from that place. .

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Posts / Replies

[KASTURI SETHI]

Vacant plot found by the Department' s Officers is a very very serious matter. It indicates towards the future plan whatever may be the background or reason. It is a fact that it was detected as vacant. As per GST law , any such major change should have been brought to the notice of the department. Regarding your query look into definition of principal place of business. Your intention may not be mala fide but the fact of vacant plot goes against you.

[Alkesh Jani]

Sir,

In my point of view, you need to fight on the legal grounds, as denial of ITC may lead to huge loss. Please consult an expert to present your case before department.

Our experts may correct me if mistaken.

Thanks

[bk r]

Thanks for your reply. But I want to know that whether depaemt action is correct to issue SCN for cancel of registration and disallowed of tran 1 credit and ITC. However Additional place of business is exist. Is there any other channel to challange the deptt action

[KASTURI SETHI]

Dear Querist,

The Department's action is right but you will be given opportunity to defend yourself. Without affording an opportunity for personal hearing, registration cannot be cancelled. First issue is to save registration. Claiming ITC comes thereafter. Anyhow you will have to fight for your legal rights. You are to prove your bona fides.

In view of circumstances and facts explained by you, I think that you will be able to prove that you have acted in a bona fide manner. Once your bona fides are established, your registration will not be cancelled and accordingly, your substantive rights of ITC will not be forfeited.

[YAGAY and SUN]

Please write to Jurisdictional Officer in this regard.

[Ganeshan Kalyani]

Opportunity of being heard is given. You can justify at that time .