Ground for cancellation of registration: Under Section 29(2) of CGST Act proper officer of GST has power to cancel registration of a person on any of the following ground.
- Registered person has contravene certain provision of GST law as may be prescribed. Such prescribed ground are in rule 21.
- Composition Tax payer has not furnish GST return for 3 Consecutive tax periods.
- Regular tax payer (other than Composition tax payer) has not furnish return for a continuous period of 6 months.
- In the case of voluntary registration u/s 25(3) business not commenced within 6 months from date of registration.
- Registration obtained by means of fraud, willful misstatement or suppression of fact.
Ground for cancellation as per rule 21 prescribed in section 29(2) of CGST
| (a) | does not conduct any business from the declared place of business; or | |
| [(b) | 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 | |
| (c) | Violates the provisions of section 171(Anti profiteering) of the Act or the rules made thereunder.] | |
| (d) | Violates the provision of rule 10A( furnishing of bank account details) | |
| (e) | avails input tax credit in violation of the provisions of section 16 of the Act or the rules made thereunder; or | |
| (f) | 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 | |
| (g) | Violates the provision of rule 86B( credit utilization of ITC not exceeding 99% if value of taxable supply other than exempt supply and zero-rated supply, in a month exceeds ₹ 50 lakh except few exceptions. |
This power of cancellation of registration is discretionary and must be exercised judicially. Further this power may be exercised retrospectively also.
Limitation period for application for revocation of cancellation: Anyone who registration has been cancel by proper officer on his own (i.e. cancellation of registration without application of cancellation of registration) may apply to the proper officer u/s 30 of the CGST Act for revocation of cancellation of registration in form no GSTR REG-21 within 30 days from date of service of cancellation order.
Extended period: Further finance Act 2020 w .e .f 01-01-2021 has relaxed and empowered Additional/ Joint Commissioner / Commissioner to grant Condonation of above period of 30 days. This period of 30 days could be extended on sufficient cause for
- Up to further 30 days by Additional/Joint Commissioner
- Further up to 30 days by the commissioner beyond the above extended period of 30 days.
Due to Covid -19 business premises of the taxpayers as well as offices of the consultants remains closed due to lockdown and therefore in several cases revocation application could not be filed within prescribed period discussed above and therefore to remove hardship various notification has been issued extending the limitation period discussed above for filing of application for revocation of registration. earlier notification no. 35/2020 dated 3rd April 2020 has extended the period and further notification no. 14/2021 dated 1st May 2021 has extended the period of limitation which is further extended notification no. 34/2021 dated 29th of August 2021. As per this notification if registration has been cancelled invocation Sec29 (2)(b)and (c) discussed above such application for application could be filed up to 30th September 2021 where due date of filing of application for revocation of cancellation of registration between 1st March 2021 to 31st August 2021.
Further certain clarification required on the implementation issue of the above referred notification accordingly circular no. 158/14/2021-GST date 6th September 2021 issued clarify the issues of above referred notification.
Important portion of circular reproduce hereunder.
- Applications covered under the scope of the said notification
3.1 The said notification specifies that where the due date of filing of application for revocation of cancellation of registration falls between 1st March, 2020 to 31st August, 2021, the time limit for filing of application for revocation of cancellation of registration is extended to 30th September, 2021. Accordingly, it is clarified that the benefit of said notification is extended to all the cases where cancellation of registration has been done under clause (b) or clause (c) of sub-section (2) of section 29 of the CGST Ac, 2017 and where the due date of filing of application for revocation of cancellation of registration falls between 1st March, 2020 to 31st August, 2021. It is further clarified that the benefit of notification would be applicable in those cases also where the application for revocation of cancellation of registration is either pending with the proper officer or has already been rejected by the proper officer. It is further clarified that the benefit of notification would also be available in those cases which are pending with the appellate authority or which have been rejected by the appellate authority. In other words, the date for filing application for revocation of cancellation of registration in all cases, where registration has been cancelled under clause (b) or clause (c) of sub-section (2) of section 29 of CGST Act, 2017 and where the due date of filing of application for revocation of cancellation of registration falls between 1st March, 2020 to 31st August, 2021, is extended to 30th September, 2021, irrespective of the status of such applications. As explained in this para, the said notification would be applicable in the following manner:
(i) Application for revocation of cancellation of registration has not been filed by the taxpayer-
In such cases, the applications for revocation can be filed upto the extended timelines as provided vide the said notification. Such cases also cover those instances where an appeal was filed against order of cancellation of registration and the appeal had been rejected.
(ii) Application for revocation of cancellation of registration has already been filed and which are pending with the proper officer-
In such cases, the officer shall process the application for revocation considering the extended timelines as provided vide the said notification.
(iii) Application for revocation of cancellation of registration was filed, but was rejected by the proper officer and taxpayer has not filed any appeal against the rejection –
In such cases, taxpayer may file a fresh application for revocation and the officer shall process the application for revocation considering the extended timelines as provided vide the said notification.
(iv) Application for revocation of cancellation of registration was filed, the proper officer rejected the application and appeal against the rejection order is pending before appellate authority-
In such cases, appellate authorities shall take the cognizance of the said notification for extension of timelines while deciding the appeal.
(v) Application for revocation of cancellation of registration was filed, the proper officer rejected the application and the appeal has been decided against the taxpayer-
In such cases, taxpayer may file a fresh application for revocation and the officer shall process the application for revocation considering the extended timelines as provided vide the said notification.
- It may be recalled that, with effect from 01.01.2021, proviso to sub-section (1) of section 30 of the CGST Act has been inserted which provides for extension of time for filing application for revocation of cancellation of registration by 30 days by Additional/ Joint Commissioner and by another 30 days by the Commissioner. Doubts have been raised whether the said notification has extended the due date in respect of initial period of 30 days for filing the application (in cases where registration has been cancelled under clause (b) or clause (c) of sub-section (2) of section 29 of CGST Act, 2017) under sub-section (1) of section 30 of the CGST Act or whether the due date of filing applications for revocation of registration can be extended further for the period of 60 days (30 + 30) by the Joint Commissioner/ Additional Commissioner/ Commissioner, as the case may be, beyond the extended date of 09.2021. It is clarified that:
- Where the 30 days’ time limit falls between 1st March, 2020 to 31st December, 2020, there is no provision available to extend the said time period of 30 days under section 30 of the CGST Act. For such cases, pursuant to the said notification, the time limit to apply for revocation of cancellation of registration stands extended up to 30th September, 2021 only; and
- where the time period of 30 days since cancellation of registration has not lapsed as on 1st January, 2021 or where the registration has been cancelled on or after 1st January, 2021, the time limit for applying for revocation of cancellation of registration shall stand extended as follows:
- Where the time period of 90 days (initial 30 days and extension of 30 + 30 days) since cancellation of registration has elapsed by 31.08.2021, the time limit to apply for revocation of cancellation of registration stands extended upto 30th September 2021, without any further extension of time by Joint Commissioner/ Additional Commissioner/ Commissioner.
- Where the time period of 60 days (and not 90 days) since cancellation of registration has elapsed by 08.2021, the time limit to apply for revocation of cancellation of registration stands extended upto 30th September 2021, with the extension of timelines by another 30 days beyond 30.09.2021 by the Commissioner, on being satisfied, as per proviso to sub-section (1) of section 30 of the CGST Act
- Where the time period of 30 days (and not 60 days or 90 days) since cancellation of registration has elapsed by 08.2021, the time limit to apply for revocation of cancellation of registration stands extended upto 30th September 2021, with the extension of timelines by another 30 days beyond 30.09.2021 by the Joint/Additional Commissioner and another 30 days by the Commissioner, on being satisfied, as per proviso to sub-section (1) of section 30 of the CGST Act.
Conclusion: Although date for application for revocation of registration is extended till 30-09-2021 but no extension of payment of tax without interest, so taxpayer must ensure to deposit the due taxes along with interest. Further no waiver of late fee, so even if registration restored taxpayer have to pay late fee for delay in filing of GST return and this offence is continuing one. Further no extension of time limit for availing ITC which is last date of filing of GST return of September of next FY. Further on reporting of outward supply in GSTR-1 /IFF other party/purchaser eligible to avail ITC , so if GSTR-1 not filed within due time the recipient of supply /purchaser may not avail ITC so loss of credit of ITC forever. so even if there is time limit for application for revocation of registration, we must ensure to make application for revocation at earliest and effort to get registration restored at earliest , payment of tax and filing of GST return and GSTR-1/IFF at earliest. If readers have any query they may contact to CA P P SINGH @9711521060/9871229590 or can email to us at info@ppsingh.org
