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Suo Moto Cancellation of GST Registration

Meaning of the term “Suo Moto”:

The term “Suo Moto” is a Latin legal term which literally means “on its own motion”. It implies that an action was taken by a group or persons on their own. Hence, when a government entity or a court takes up a matter suo moto, it is taking up the matter “on its own motion” meaning of its own accord or on its own initiative.

Suo Moto cancellation of GST Registration:

If a tax payer does not comply with the provisions laid down under Goods and Service Tax, the proper officer is empowered to initiate cancellation of GST registration of such defaulting tax payer.

This type of cancellation of registration initiated by proper officer is called suo moto cancellation of registration.

Reason for Suo Moto Cancellation of Registration:

Section 29(2) of Central Goods and Service Tax Act, 2017 (“CGST Act, 2017”) provides for various grounds of suo-moto cancellation of GST registration by proper officer such as:

Communication Suo Moto Cancellation of GST Registration:

Application for Revocation of Cancellation of GST Registration:

Steps to Submit Application for Revocation:

Following are the steps to be followed to apply for revocation online through the GST Portal:

Action by Proper Officer:

Upon receipt of application for revocation of cancellation of GST Registration, the proper officer may take following action:

(A) Acceptance of Application:

a. When the proper officer is satisfied that the reason being provided for revocation of cancellation of registration is appropriate, then, the officer will revoke the cancellation of registration.

b. On approval by the Tax Official, the system generates an approval order and notification is sent to the applicant, Primary Authorized Signatory of the taxpayer via e-mail and SMS, about the same.

c. Consequent to the approval of the Application for Revocation of Cancelled Registration, the taxpayer’s GSTIN Status will be changed from Inactive to Active status with effect from the effective date of cancellation.

(B) Rejection of Application:

a. When the Tax Official rejects an application for revocation of cancelled registration then the rejection order will be generated.
b. The GSTIN status will remain “Inactive” on the GST Portal, and the Primary Authorized Signatory will be intimated via SMS and email of the rejection of the application.
c. The Rejection Order receipt will be made available on the taxpayer’s dashboard.

Ineligible Applications:

Appeal to Appellate Authority:

In addition to above, section 107(1) provides that any person aggrieved by order of any adjudicating authority may file an appeal with appellate authority within 3 months from date of communication of order of GST Registration cancellation.
Further, appellate authority may extend such time limit of 3 months by further period of 1 month.

Compliance in case of Cancellation of GST Registration with Prospective Date:

The department has notified vide notification no. 20/2019-central taxes that all GST return for such period (i.e., from date of order of cancellation of GST registration till date of order of revocation of cancellation of registration) should be furnished within 30 days from date of order of revocation of cancellation of registration.

Compliance in case of Cancellation of GST Registration with Retrospective Date:

Where registration is cancelled with retrospective effect, return filing should be completed for the period from effective date of cancellation of GST Registration till date of order of revocation of cancellation.

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