Suo Moto Cancellation of GST Registration: Meaning

Suo moto cancellation of GST registration means that the tax officer himself cancels the registration of a taxpayer under GST. The reasons for initiating suo moto cancellation of registration of a taxpayer are to be recorded by such tax officer and these reasons are required to be mentioned in the show cause notice issued to the taxpayer as per the provisions of Section 29(2) of the CGST Act.

Conditions to be Satisfied for Suo Moto Cancellation of GST Registration

Suo moto cancellation by the tax officer can be initiated if any one of the following conditions is satisfied:

1. The taxpayer has violated the provisions of the CGST Act or the rules made thereunder. 
2. The taxpayer has registered their business through fraud, suppression or misrepresentation of facts.
3. The taxpayer has taken voluntary registration under the GST law and not commenced business within six months from the date of registration. 
4. The taxpayer has failed to apply for GST enrolment within 90 days from the appointed date or any such extended date as may be prescribed.
5. The taxpayer does not conduct any business from the declared place of business.
6. The taxpayer has failed to file returns for six months consecutively, or for two quarters in the case of quarterly filers. The criteria for filing returns is three months in the case of a composition taxpayer.
7. The taxpayer has indulged in supplying goods or services without the issue of an invoice in violation of the provisions of the CGST Act to evade taxes. 
8. It is observed that the taxpayer has issued an invoice without a supply of goods or services, thereby again violating the provisions of the Act to evade input tax credit or get a refund of tax.
9. Failure to deposit taxes collected with the treasury within 90 days.
10. Failure on the taxpayer’s part to pay taxes, interest or penalty to the government within 90 days.
11. Display of misconduct during any proceedings under the GST Act.
12. It is observed that a person is not liable or has ceased to become liable for deduction or collection of taxes under GST laws.
13. The taxpayer is no longer required to be registered under provisions of GST Law.
14. If the business constitution is a sole proprietorship, upon the death of the sole proprietor.
15. In the event of amalgamation, transfer, merger, demerger and the like of a business.
16. If there is a change in the constitution that leads to a change in PAN.
17. In the event of discontinuation of closure of business.
18. In the event the taxpayer violates the provisions of Section 171 of the CGST Act or the rules made thereunder i.e. violate the anti-profiteering measures in place.
19. In the event the taxpayer violates the provision of Rule 10A of the CGST Rules i.e. if the taxpayer furnishes incorrect or false bank account details.
20. In the event the taxpayer avails input tax credit in violation of the provisions of Section 16 of the CGST Act or the rules made thereunder.
21. In the event the taxpayer furnishes details of outward supplies in their GSTR-1 which is higher than the details of outward supplies reported in their GSTR-3B.
22. If the taxpayer violates the provision of Rule 86B of the CGST Rules i.e. restriction of input tax credit utilisation from the electronic credit ledger
23. If the taxpayer violates the provisions of the third or fourth proviso to Rule 23 (1) of the CGST Rules i.e. the rules in regard to revocation of cancellation of GST registration.

Procedure to be Adhered to for Suo Moto Cancellation of GST Registration by Tax Officer.
As per the GST laws, the tax officer needs to issue show cause notice to taxable person and also specify the reasons for intention of tax officer for suo moto cancellation of registration of taxable person.

The taxable person has to reply the show cause notice issued by tax officer within 7 working days. The reply to show cause notice issued by tax officer can be provided through Services > Registration> Application for Filing Clarifications basis nature of show cause notice raised by tax officer in suo moto cancellation of registration case.

Step to reply show cause notice issued for suo moto cancellation of GST registration is same as replied for show cause notice issued for reasons to cancel GST registration on application of taxpayer. Taxpayer can reply for show cause notice for suo moto cancellation of GST registration by Services > Registration> Application for Filing Clarifications.

Tax Officer shall proceed as per information received and show cause notice issued to registered person and his reply thereto either drop the proceedings for cancellation of registration and intimate the registered person through SMS or email or cancel the registration in terms of section 30 of CGST/SGST Act, 2017 as the case may be.

If no reply is received from the Taxpayer within seven working days from the date of issue of show cause notice or the Tax Officer is not satisfied with the reply of Taxpayer, then Tax Officer can cancel the GST Registration of Taxpayer.

Steps To Reply Show Cause Notice For Cancel GST Registration Suo Moto !
A show cause notice for suo moto cancellation of GST registration has been generated. Taxpayer can reply to the show cause notice by clicking on Services > Registration > Application for Filing Clarifications. Application for Filing Clarifications will be displayed for filing clarification. The reason for cancellation of registration as provided by the tax officer in the show cause notice will be displayed in the Application for Filing Clarifications and taxpayer can provide his response as required.

Taxpayer can add reply for all the reasons mentioned by tax officer in show cause notice for cancellation of GST registration.

How to Activate Cancelled Suo Moto GST Registration?
Step 1: Login to GST portal at http://www.gst.gov.in

Step 2 – Click on Service > Registration > Application for Revocation of Canceled Registration.

Step 3 – Fill the application for cancellation of registration and give reasons for revocation along with supporting document(s).

Select Authorized Signatory.

On successful submission of the application, a message will be displayed as “Application successfully submitted”.

On successful submission of the application a message will be received saying that application has been successfully submitted.

The GST officer shall withdraw the cancellation order, if he is satisfied with the justifications filed by the assessee, within a period of thirty days from the date of receipt of the application for revocation of cancellation of registration. The GST officer shall issue an order in FORM GST REG-22 for revocation of cancellation of registration of the taxable person. On revocation of cancellation of registration, the taxable person shall stand activated on GST portal. His profile and registration certificate shall stand updated on GST portal. All the accesses available to active taxpayers would get enabled on GST portal.

Effect of Suo Moto GST Registration Cancellation

• Once GST registration is cancelled by Tax Authorities then intimation of such cancellation shall be sent to Taxpayer through SMS and Email.
• A Cancellation Order of Registration shall be generated and sent through email/SMS to the Primary Authorized Signatory of taxpayer.
• The order for cancellation of registration shall be available on Taxpayer’s dashboard to view, print and download.
• The status of GSTIN/UIN/GSTP ID will change from ‘Proceeding for Cancellation initiated’ to ‘Inactive’ and intimation of the same shall be provided to the concerned tax authorities.
• After GST registration has been cancelled by tax authorities, a taxpayer will not be able to file returns or upload invoices for the period after the date of cancellation specified in the cancellation order. Additionally, after GST registration has been cancelled by tax authorities, a taxpayer will not be able to carry out GSTP functions for any taxpayer for the period after the date of cancellation specified in the cancellation order.
• No amendments to registration details shall be allowed except for updating email and mobile number of taxpayer until all dues/ refund if any are paid by taxpayer.
• Option to apply for Revocation of Cancellation of GST registration (if applicable) shall be available for cancelled GST registration.