Revocation of Cancellation of Registration under GST: A Comprehensive Guide

Revocation of Cancellation of Registration under GST is a process that allows a taxpayer to restore their GST registration if it has been canceled by the tax authorities. This guide provides a comprehensive overview of the revocation process, including the grounds for cancellation, the procedure for applying for revocation, and the conditions for approval.

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).

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 officerwill verify the application and documents submitted.
3. Order for Revocation: If satisfied with the application, the officer willrevoke 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-23and 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:

Step 1: File an Application for Revocation

• Log in to the GST portal (gst.gov.in).
• Navigate to Services > Registration > Application for Revocation of Cancelled Registration.
• Fill out Form GST REG-21and provide the required details, including:
  • Reason for cancellation.
  • Steps taken to rectify the issues.
  • Supporting documents (e.g., proof of filing pending returns, payment of dues).

Step 2: Submit Supporting Documents

• Attach the necessary documents, such as:
  • Proof of filing pending returns.
  • Proof of payment of dues (if applicable).
  • Any other documents requested by the tax authorities.

Step 3: Verification by Tax Authorities

• The tax authorities will verify the application and the supporting documents.
• If satisfied, they will issue an order for revocation of cancellation in Form GST REG-22.
• If not satisfied, they will issue a notice in Form GST REG-23, asking for additional information or clarification.

Step 4: Respond to Notice (if applicable)

• If a notice is issued, the taxpayer must respond within 7 working daysusing Form GST REG-24.
• Provide the required information or documents to address the concerns raised by the tax authorities.

Step 5: Final Order

• After reviewing the response, the tax authorities will either:
  • Approve the revocation and issue an order in Form GST REG-22, or
  • Reject the application and issue an order in Form GST REG-05.

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-21within the prescribed 30-day period.
3. Verification: The Proper officerreviews 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.