The taxpayers whose GST registrations have been cancelled are mandatorily required to apply for a new one. Without a GST registration, taxpayers will not be able to continue their businesses. Therefore, it is important to understand the significance of revoking a cancelled registration and the consequences of not doing so.
This article covers the following topics:
As per Section 29(2) of the Central Goods and Services Tax (CGST) Act 2017, GST authorities are empowered to cancel the GST registration of those taxpayers who fail to comply with the GST norms. If a registered person does not file GST returns or does not comply with the statutory provisions, s/he will lose his/her GST registration.
If the person, whose GST registration has been canceled by the proper officer for not filing GST returns, wants to continue his/her business, s/he will have to apply for a revocation of the cancelled GST registration. After applying for the revocation of GST registration, the said taxpayer will be required to pay all previous pending tax liabilities.
If the person, whose GST registration has been canceled by the proper officer for not complying with the statutory provisions of GST, wants to continue his/her business, s/he will have to apply for a new GST registration. Such a person will not have to make a payment if s/he does not have any pending liabilities.
The application for a new registration will be handled even more cautiously by the proper officer. Since the previous records of the taxpayer will have proven to be fraudulent, the proper officer will take extra measures for accurately verifying and processing the application.
In case the taxpayer already has a GST registration and is applying for a new one for the same State, the following points will be scrutinized by the proper officer:
- If the current GST registration is being continued or cancelled,
- Whether or not the taxpayer has filed an application for the revocation of his/her cancelled GST registration,
- If the registration was cancelled for non-compliance under provisions of Section 29(2) (b) (composition taxpayer didn’t file returns for three tax periods consecutively) or Section 29(2) (c) (normal taxpayer did not file returns for six months consecutively).
After the cancellation of GST registration, if the taxpayer does not apply for a revocation of the canceled GST registration, then s/he will face its consequences. If the conditions prescribed in Sections 29(2) (b) and (c) are still valid, then the application for a fresh GST registration will be deemed as ‘deficient’ as per Rule 9 of the CGST Rules 2017, and the proper officer will reject the application on that basis.
Therefore, those taxpayers who have been non-compliant with the GST provisions and the GST return filing process will face extreme difficulty in obtaining a new GST registration after cancellation of their previous one.