Suo Moto GST Cancellation: Reasons & Frequently Asked Questions
GST Cancellation can be conducted voluntarily as well as Suo moto. What’s the meaning of Suo Moto? According to the dictionary, Suo moto means “relating to an action taken by a court of its own accord, without any request by the parties involved”.
GST Registration Cancelled Suo Moto means cancellation of GST by the authorities involved in GST. The cancellation is conducted in Suo moto by the officials. We might wonder for what reasons the department can cancel GST Registration Suo moto?
Reasons for Suo Moto Cancellation of GST Registration
The GST Registration can be canceled Suo moto in case of the following contraventions by the registered persons.
- The business has been discontinued (reason may be the death of the proprietor, transfer of business in form of amalgamation, demerger)
- Change in constitution of business
- GST Registered person is not mandatorily, liable to get registered under GST, (reason may be turnover of business goes below the threshold limit)
- A registered person has not filed returns for consecutively 6 months and in the case of composition dealers three tax periods.
- A voluntarily registered person has not commenced business within 6 months from the date of registration.
- Registration was obtained by means of fraud, willful misstatement, suppression of facts.
- The registered person does not conduct business from the declared place of business.
- He issues Tax Invoice/ Bill of Supply without a supply of Goods or Services or both in violation of the provisions of this Act/Rules.
- If he violates the provisions of Section 171 of CGST Act (Anti Profiteering measures).
- Violated Rule 10A Furnishing of Bank Account in GST after obtaining GST Registration within the time specified.
- Avails Input Tax Credit in violation of Section 16 of CGST Act and Rules (Section 16 specifies conditions to claim ITC)
- Furnishes the details of outward supplies in Form GSTR-1 Under Section 37 for one or more tax periods which is in excess of outward supplies declared by him in his valid return under Section 39 for the said tax periods.
- Violates the provision of Rule 86B
New GST registration after Suo moto cancellation or How to activate GST Registration after the expired time limit
Here, we will not discuss revocation of GST Registration, because revocation can be conducted within the time limit provided for revocation. Can we obtain GST Registration after expiry?
The answer is “Yes” and our team has done it also but it’s not easy to get back GST Registration. A fresh application needs to be filed on the same PAN but after clearing all the pending dues and liabilities. GST Department will send the show cause notice and discuss the previous registration. The officer will need proof of discharge of liabilities and a declaration to pay the liabilities if any arise in the future of previous registration.
Then, only he will accept the fresh GST Registration and grant a new GSTIN, different from the earlier one.
Can I cancel GST registration without filing returns?
Often we are not able to start our business and forget to file GST Returns (GSTR-1 or GSTR-3B) after obtaining GST Registration. This primarily happens when are unaware of GST Returns provisions. Hence, after the due date, late fees are applicable which becomes a huge amount to discharge.
After six months, GST Registration will be canceled Suo moto by the GST officials. So what’s the problem if we didn’t file the returns. The problem will come when you again need the GST Registration for any other reason. At that time GST officer will send you the notice to recover previous late fees and penalties. At that time you need to pay otherwise it will be hard to obtain GST Registration a second time.
Whether any intimation will be sent for Suo moto GST Cancellation?
A show-cause notice will be issued to the registered person which will be considered as intimation and in case of failure to respond to the notice. GST Registration will be canceled Suo moto without any further intimation. In the show-cause notice, the GST officer will provide the reasons for which his registration shall be canceled.
There must be a precondition (reasons) as specified for initiating Suo moto cancellation of GST Registration.
Time Limit & How to respond to the GST Cancellation Show Cause Notice
The time limit to reply to GST Show Cause Notice is 7 working days from the date of issue of notice. To file the response to the GST Cancellation Show Cause Notice. One shall go to Services> Registration> Application for filing show-cause notice. Same way as we respond to GST Registration Show Cause Notice.
Dropping of proceedings for Suo moto cancellation of registration
In case, the response is filed to the issued GST Cancellation Show Cause Notice and GST Officer has accepted the clarification. The officer shall drop the proceedings in the case, which means registration will not be canceled.
Also, the authorized signatory will be intimated about the dropping of the case on the registered email id and phone. An order will also be issued regarding the dropping of the case which can be viewed on the registered person dashboard. The status of GST Registration will change from ‘Suspended’ to ‘Active’.
Frequently Asked Questions on GST Cancellation
The date mentioned in the Order of cancellation will be considered as the effective date of Cancellation.
All liabilities existing before the date of Suo moto GST Cancellation needs to be paid by the registered person, irrespective of cancellation. The amount can be recovered after the cancellation of GST Registration also.
The registered person will be able to login into the GST portal. However, will not be able to amend any details or file returns after the issuance of the GST Cancellation order. But before the issuance of a cancellation order noncore amendment can be made.
Cancellation of GST Registration in CGST Act, SGST Act, or IGST Act will be considered as a cancellation of registration in all of the acts.
Yes, GST Returns can be filed after the order of cancellation only of the prior period. Returns will stop from the effective date of cancellation. When you will try filing the return for the prior period, the option to file subsequent returns after the order of cancellation will be disabled.
Can a registered person file a Cancellation request once the cancellation has been initiated by the GST officer?
No, the registered person cannot file a cancellation request once, the cancellation has been initiated Suo moto by the GST officer.
Akash Arora is a Chartered Accountant. His domain areas include Indirect Tax (GST), Direct tax, Internal Auditing as well as Statutory Auditing. He is a business advisor to FMCG, Construction, and Automobile Entities all over India. Feel Free To Contact Him. 🙂