Revocation of Cancellation of Registration under GST: A Comprehensive Guide

Introduction

Goods and Services Tax (GST) is a unified indirect tax system implemented to streamline tax administration and enhance the ease of doing business in India. Under GST, businesses are required to register themselves to comply with tax regulations. However, there are instances where a GST registration may be cancelled either by the tax authorities or voluntarily by the taxpayer. Revocation of such cancellation is a crucial process that allows businesses to restore their GST registration and continue their operations without any legal or tax-related hindrances. This article delves into the provisions, procedures, and implications of revocation of cancellation of GST registration.

Legal Framework

The process of revocation of cancellation of GST registration is governed by the following sections and rules under the GST law:

• Section 30 of the CGST Act, 2017: This section provides the legal framework for revocation of cancellation of registration.

• Rule 23 of the CGST Rules, 2017: This rule outlines the procedure for applying for revocation of cancellation.

Reasons for Cancellation of GST Registration by the Proper officer-

GST registration may be cancelled by the Proper officer for various reasons, including:

(a) a Registered person has contravened such provisions of the Act or the rules made thereunder as may be prescribed; or

(b) a person paying tax under section 10 has not furnished the return for a financial year beyond three months from the due date of furnishing the said return; or

(c) any Registered person, other than a person specified in clause (b), has not furnished returns for continuous Tax period of 6 months; or

(d) any person who has taken voluntary registration under sub-section (3) of section 25 has not commenced business within six months from the date of registration; or

(e) registration has been obtained by means of fraud, wilful misstatement or suppression of facts:

(f) does not conduct any business from the declared Place of business; or

(g) 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; or

(h) violates the provisions of section 171 of the Act or the rules made thereunder (Anti-Profiteering).

(i) violates the provision of rule 10A (furnishing of Bank Account with 30 days of obtaining registration).

(j) avails Input tax credit in violation of the provisions of section 16 of the Act or the rules made thereunder; or

(k) furnishes the details of outward supplies in FORM GSTR-1 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; or

(l) violates the provision of rule 86B (payment of 1% liability in Cash).

Revocation of Cancellation: Key Provisions

Section 30 of the CGST Act, 2017

Section 30 allows for the revocation of cancellation of GST registration under specific conditions:

Application Timeline: An application for revocation must be made within 90 days from the date of service of the cancellation order. (See Rule 23)

Rule 23 of the CGST Rules, 2017

Rule 23 specifies the detailed procedure for revocation:

1. Application Process: The application for revocation must be submitted electronically in Form GST REG-21.

2. Verification by Tax Officer: Upon receipt, the Proper officer will verify the application and documents submitted.

3. Order for Revocation: If satisfied with the application, the officer will revoke the cancellation by issuing an order in Form GST REG-22 within 30 days of receiving the application.

4. Rejection of Application: If the application is not satisfactory, the officer will issue a notice in Form GST REG-23 and provide an opportunity to the taxpayer to present their case.

Procedure for Revocation of Cancellation

The step-by-step procedure for revocation of cancellation of GST registration is as follows:

1. Filing the Application: The taxpayer must file an application for revocation of cancellation in Form GST REG-21 within the prescribed time limit.

2. Submission of Returns: Ensure that all pending returns are filed, and any outstanding dues are paid to avoid rejection.

3. Verification by Proper officer: The proper officer will review the application and the compliance status of the taxpayer.

4. Issuance of Order: If the officer is satisfied, they will issue an order in Form GST REG-22 to revoke the cancellation. If not, a notice in Form GST REG-23 will be issued, requiring the taxpayer to respond within a stipulated time.

5. Response to Notice: If a notice is issued, the taxpayer must respond adequately, providing necessary clarifications or rectifying any discrepancies.

6. Final Decision: Based on the response, the officer will make a final decision to either revoke the cancellation or reject the application. Where the registration has been cancelled for the reason of non-filling of returns, such person shall furnish all returns relating to period from the effective date of cancellation of registration till the date of order of revocation of cancellation of registration within a period of thirty days from the date of order of revocation of cancellation of registration.

Example

Let`s consider a practical example to understand the revocation process:

ABC Pvt. Ltd., a registered taxpayer under GST, fails to file returns for six consecutive months. As a result, the tax officer cancels their GST registration. ABC Pvt. Ltd. realizes the importance of GST registration for their business operations and decides to apply for revocation.

Steps to be taken by ABC Pvt. Ltd.:

1. File Pending Returns: ABC Pvt. Ltd. files all pending returns and clears any outstanding dues.

2. Submit Application: They submit an application for revocation of cancellation in Form GST REG-21 within the prescribed 30-day period.

3. Verification: The Proper officer reviews the application and verifies the compliance status.

4. Issuance of Order: Satisfied with the compliance, the officer issues an order in Form GST REG-22, revoking the cancellation of registration.

ABC Pvt. Ltd. can now continue its business operations with a valid GST registration, ensuring compliance with GST laws and availing Input tax credit benefits.

Conclusion

Revocation of cancellation of GST registration is a critical provision that helps businesses restore their GST registration and continue their operations seamlessly. Understanding the legal framework, procedural steps, and practical implications is essential for businesses and tax professionals to navigate this process effectively. By ensuring timely compliance and addressing any discrepancies promptly, businesses can avoid the adverse effects of GST registration cancellation and maintain a smooth and compliant tax regime.

Staying updated with the latest provisions and notifications from the GST authorities will further enhance the ability of businesses to manage their GST compliance efficiently.