Categories: GST Filling

Avoidance of GST Registration Suspension

Way of Avoid GST Suspension Registration

  • The Government of India through the Goods and Services Tax Network (GSTN) has recently begun to send SMS messages to taxpayers notifying them of the differences between the GST returns they have filed.
  • As per the recent Notification 94/2020 of 22 December 2020, a new sub-rule 2A has been added to Rule 21A of the Central Goods and Services Tax (CGST) Rules.
  • Any big variations or anomalies measured between the GSTR-3B and the GSTR-1/2B could result in the suspension of GST registration.
  • Furthermore, if these differences remain unexplained, the Goods and Services Tax Network could be canceled.

No opportunity to be heard by taxpaying citizens for suspension of registration.

  • In addition, if the taxpayer has applied for cancellation, the tax officer may suspend the registration until the cancellation procedure has been completed as per the provisions of new Rule 21A as introduced by notification 94/2020.

Also read: Taxpayers should keep in mind while GST Returns filing

What is indicated by the suspension of registration of the GST?

  • The Govt has come up with a new framework of suspension of registration of GST. Rule 21A has been added to the CGST Rules 2019.
  • With the implementation of this rule, the taxpayer who has implemented the cancellation of the GST registration will not be needed to comply with the requirements of the GST return filing during the period of suspension.

For whom GST or GSTIN registration can be suspended?

  • The GSTIN of a registered person may only be canceled by a proper officer if he has grounds to suppose that the registration must be canceled.
  • The competent authority shall give the registered person a sensible chance to be heard and shall apply the proper cancellation process referred to in Rule 22 of the CGST Rules 2017.
  • The competent authority may suspend the registration during the time frame during which such cancellation hearings actually occur.
  • In accordance with the provisions of Rule 21(2A) of the CGST Rules 2017, the GST Officer has the power to suspend your registration. If GSTR-3B has significant differences with GSTR 1 or GSTR 2A/2B.

The Standard Operating Procedure (SOP) has been notified by the Central Board of Indirect Taxes and Customs (CBIC) for implementation of the suspension provision under sub-rule (2A) of Rule 21A of the 2017 CGST Rules.

Standard operating procedure in accordance with Circular 145/01/2021-GST in the case of suspension of registration. How it will be starting are as bellow:

Suspension Intimation in Form REG 31:

  • In the case that a taxpayer’s registration is suspended, the taxpayer would receive a system-generated intimation of suspension and notice of cancellation of registration in FORM GST REG-31.
  • This notice will include the reasons for the suspension and would be sent to the registered email address of the taxpayer.
  • In this scenario, the taxpayer is required to explain why the registration should not be suspended within 30 days.

Respond to Form REG 18 within 30 days of receipt of the intimation:

  • After receiving the notice, the taxpayer will be required to respond to the Legal Tax Officer in GST REG 18 explaining the reasons for the differences/anomalies.
  • The taxpayer would also be expected to provide the details of the compliance requirements rendered and/or the reason why their registration should not have been cancelled.
  • On the other side, if the notification of suspension and notification of cancellation of registration is issued on the ground of non-filing of the returns, the taxpayer should have to file all the outstanding returns before submitting the reply.

Issuance of an order by the GST Officer either under Form REG 20 or Form REG 19:

  • GST Officer has the authority to issue an order either to drop the suspension/cancellation of registration proceedings in FORM GST REG-20 or to cancel registration in FORM GST REG-19.
  • Depending on the actions of the GST Officer, the status of GSTIN will be adjusted to “Active” or “Cancelled Suo-moto.” suspension or cancellation of registration can be problematic for any business. Therefore, it is always best to be cautious to avoid going down a dangerous path.

What is the timeframe of suspension of registration of the GST?

The suspension of the GST registration shall take days from the date on which the registered person has applied for the cancellation of the GST registration. The start date of suspension shall be the later of the below:

  • Submitting the application for cancellation of registration date
  • Cancellation is the requested date

          Whichever is later.

Impact of suspension of registration of GST:

The person for whom the registration has been suspended shall:

  1. Cannot make any taxable supply after suspension of payment.
  2. No returns are needed, as required by section 39 of the Central Goods and Service Tax Act, 2017. Decrease of the responsibility of adherence is the biggest advantage appreciated by the taxpayer until the GST registration has been suspended.

Here are a few suggestions from Rajput Jain Associates (RJA) to every taxpayer in India:

  • Implement a Proactive and Preventive approach to filing and reconciling GST returns. Measures of remedial can be costly.
  • Rely on Automated Return Reconciliation Software for GST that uses artificial intelligence (AI) and Business intelligence (BI) to keep up-to-date and way ahead.

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Rajput Jain & Associates

Rajput Jain & Associates is a Chartered Accountants firm, with it's headquarter situated at New Delhi (the capital of India). The firm has been set up by a group of young, enthusiastic, highly skilled and motivated professionals who have taken experience from top consulting firms and are extensively experienced in their chosen fields has providing a wide array of Accounting, Auditing, Taxation, Assurance and Business advisory services to various clients and their stakeholders. Rajput jain & Associates, a professional firm, offers its clients a full range of services, To serve better and to bring bucket of services under one roof, the firm has merged with it various Chartered Accountancy firms pioneer in diversified fields. We have associates all over India in big cities. All our offices are well equipped with latest technological support with updated reference materials. We have a large team of professionals other than our Core Team members to meet the requirements of our prospective clients including the existing ones. However, considering our commitment towards high quality services to our clients, our team keeps on growing with more and more associates having strong professional background with good exposure in the related areas of responsibility.

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