GST needs no introduction as it is well-known among the masses. Nowadays, even a layman knows that GST is a goods and services tax that is levied on the transaction of goods and services of various natures in India. To fall under the ambit of GST, a business owner needs to do GST registration. Without getting this registration, they cannot take the various available advantages or benefits of the goods and services tax. The government is very strict about the GST in India. Even a small mistake is not tolerated. Under the GST laws, various grounds have been given for the cancellation or suspension of GST Registration; if any taxpayer falls under any of those grounds, then there will be a suspension or cancellation of GST Registration. Once the registration gets suspended or cancelled by the authorities, it is really difficult to get it back. Hence, one must take extra care when it comes to goods and services tax.
Key Reasons for the Suspension of GST Registration
Under section 29 of the Central Goods and Services Tax that came into action in 2017, various grounds for the suspension of GST Registration have been given. Some of the key reasons for the suspension or cancellation of GST Registration are given below:
On the Death of the Owner
- The business was discontinued
- Business got transferred fully
- Businesses got merged or amalgamated, and a completely new business was formed.
- Business got disposed of by the legal heir of the dead person
- Any kind of change, either minor or major, with the constitution of the business
- If the business is no longer liable to pay GST under section 22 and section 24 of the Goods and Services Act.
- Voluntary wants to come out of the registration obligation under section 25(1) of the Goods and Services Act
- Even during the pendency of the cancellation of GST, there may be a suspension of GST registration.
Miscellaneous Grounds for Suspension of GST Registration
- Registered individuals or organisations have done something that is against the Goods and Services Tax Act of 2017
- Registered individuals or organisations have done something that is against the Goods and Services Tax rules and regulations made under the GST laws.
- Three months beyond the due date of furnishing the returns, an individual or organisation did not furnish the GST returns.
- An individual or an organisation did not commence the business within six months of obtaining the registration of GST.
- Registration of the goods and services tax has been obtained by fraud or misstatement.
- If the registration of GST has been obtained through the suppression of the facts, then there are chances of suspension or cancellation of GST registration.
Important Points Regarding GST Suspension
Some of the crucial points regarding the suspension of GST registration are given or mentioned below for the reference of an individual or an organisation that got registered under the GST laws in India:
- Only on the basis of reasonable grounds a registration for GST can be cancelled
- The taxpayer will be informed regarding the cancellation or suspension of the registration of GST through form GST REG-31.
- After getting the notice, the GST holder must give reasonable justification within the prescribed time limit.
- Revocation applications within section 30 of the GST laws can be filed by the taxpayer. One thing taxpayers must be aware of is that this application must be filed within the prescribed time limit.
- Notice for cancellation and opportunity to be heard must be provided by the GST department before the cancellation of the registration of the GST.
- The liability and obligations of the taxpayer do not have any consequence due to the suspension or cancellation of the registration of GST
Consequences of Suspension or Cancellation of GST Registration
There are many impacts of cancellation or suspension of GST registration on the taxpayer as well as business. Some of the key consequences of the suspension or cancellation of registration for GST are given below:
- Unable to pay tax returns
- Unable to claim GST
- Harms the reputation of the business
- Negatively impact the business
- No rights under the GST laws
- Difficulty in getting registration for GST again
- Must have to re-apply for the registration under the GST laws
- Loss of credibility and reliability in the market
- Harms the goodwill of the business
Avoid GST Suspension or Cancellation
There are multiple ways through which you can avoid cancellation or suspension of GST registration in India. Some of such ways are prescribed below:
- Timely returns must be filed by the taxpayer on whose name registration of GST is taken
- Timely complete all the tax requirements under the GST law
- Whatever information provided to the Department of GST must be correct and accurate without any suppression of facts
- In any scenario, if you get any notice from the Department of Goods and Services, you must file a reply in a timely manner.
- No violation of GST laws, rules as well or regulations
How to get Back the GST Registration after Suspension?
After the suspension of GST registration, there are multiple steps to get it back. If your registration got suspended by the Department of GST, you can get it back by following the steps mentioned below:
- Visit the official web portal of the goods and services
- Login through the credential you have created during the time of the registration
- The home page will be open after the login
- From the left side, you will find the second option, “Services.” Click on the same
- Now, a tab with multiple options will open; you have to choose “user services” and then click on “View notices and orders.”
- Download the notice from the GST department for the cancellation of the GST from here.
- Read it carefully and figure out the issue due to which you got this notice of cancellation.
- Resolve the issue first and then file the reply to the same notice within the prescribed time limit with the help of a professional
- To file the reply to the notice, you have to go to the “user services” again, and you will again get the various options from which you have to choose the option of “application for filing of the clarification” and file the reply and ask for the re-activation of your registration for GST
- The department will examine the reply filed by the taxpayer and if satisfied, automatically your registration for GST will be activated
Conclusion
Registration of GST is a crucial obligation for businesses in India. Cancellation or suspension of GST registration can have far-reaching consequences. The reasons for such actions are diverse, ranging from changes in business ownership to non-compliance with GST rules. It’s imperative for taxpayers to be diligent and follow the regulations closely to avoid the suspension of their GST registration. Once suspended or cancelled, it can be a challenging process to reinstate, leading to disruptions in tax returns, business operations, and reputation. Therefore, businesses must adhere to GST laws and maintain the integrity of their registration to continue enjoying the benefits and credibility in the market.
