Cancellation & Suspension of Registration under GST

Cancellation & Suspension of Registration under GST

Due to the insertion of Rule 21A in the CGST Rules, there have been a lot of confusions regarding cancellation and suspension of registration. However, there is a huge difference between both the terms. Let us discuss each of them in detail.

Cancellation of registration under GST :-

Cancellation of Registration under GST means that the registered person will no more be registered under GST. Following may be the reasons for cancellation of registration :-

• The business has been discontinued, transferred fully for any reason including death of the proprietor, amalgamated with other legal entity, demerged or otherwise disposed of;
• There is any change in the constitution of the business;
  The taxable person (other than the person who has voluntarily taken registration under sub-section (3) of section 25 of the CGST Act, 2017) is no longer liable to be registered;
• A registered person has contravened such provisions of the Act or the rules made there under;
• A person paying tax under Composition levy has not furnished returns for three consecutive tax periods;
• Any registered person, other than a person paying tax under Composition levy has not furnished returns for a continuous period of six months; This also called as suo moto cancellation.
• 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;
• Registration has been obtained by means of fraud, willful misstatement or suppression of facts.

Suspension of registration – (Rule 21A inserted via N/N 3/2019 – CT dt 29/1/2019) :-

• Where a registered person applies for cancellation of registration under rule 20, the registration shall be deemed to be suspended from the date of submission of the application or the date from which the cancellation is sought, whichever is later, pending the completion of proceedings for cancellation of registration.
• In case of proceeding for cancellation initiated by department, the proper officer, may, after giving hearing, suspend the registration with effect from the date to be determined by him.
• The registered person whose registration has been suspended shall not make any taxable supplies the during suspension period & shall not be required to file any returns under sec 39 of CGST Act.
• The suspension of registration under sub-rule (1) or sub-rule (2) shall be deemed to be revoked upon completion of the proceedings by the proper officer under rule 22 and such revocation shall be effective from the date on which the suspension had come into effect.

From the above discussion, it is therefore clear that suspension of registration takes place before cancellation and the provisions regarding the former are different from the latter.

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