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15 Reasons Why Your GST Registration Can Be Suspended

GST laws in India provide a comprehensive compliance framework. In case a taxpayer does not abide by the provisions of the GST law or rules issued thereunder, the GST registration of such taxpayer may be cancelled or suspended. In this article, we will look at the most common situations when the GST registration of a taxpayer can be suspended:

Sl.No.Provision of the Act or RulesReason for suspension
1Section 29 (1) (a)If the business is discontinued, merged or demerged, transferred, or disposed of entirely for any reason (including the death of sole proprietor).
2Section 29 (1) (b)If there is a change in the constitution of the business undertaking.
3Section 29 (1) (c)If the taxpayer is no longer required to be registered under the GST provisions or has the intention to opt-out of voluntary GST registration.
4Section 29 (2) (a)If the taxpayer has flouted the provision of the CGST Act, 2017 or CGST Rules, 2017.
5Section 29 (2) (b)If the taxpayer paying tax under Composition Levy has not filed returns for three consecutive quarters.
6Section 29 (2) (c)If the taxpayer paying tax under any other provisions other than Composition Levy has not filed returns for six consecutive months.
7Section 29 (2) (d)If the taxpayer has undertaken voluntary registration under GST but not commenced business within six months from the date, the registration is granted.
8Section 29 (2) (e)If the registration has been obtained via fraudulent means, willful suppression of facts, or wilful misstatement.
9Rule 21(a)If the taxpayer does not conduct business from the place of business declared in the GST registration.
10Rule 21(b)If the taxpayer issues an invoice without the supply of goods or services and violates the CGST Act, 2017 or Rules thereunder.
11Rule 21(c)If the taxpayer violates the antiprofiteering measure under Section 171 of the CGST Act, 2017.
12Rule 21(d)If the taxpayer violates Rule 10A of the CGST Rules, 2017 for furnishing of bank account details.
13Rule 21(e)*If the taxpayer avails Input Tax Credit (ITC) in violation of provisions of Section 16 of the CGST Act, 2017 (Eligibility and conditions for taking ITC) or the rules made thereunder
14Rule 21(f)*If the amount of outward supplies furnished in Form GSTR-1 (under Section 37 of the CGST Act, 2017 – Furnishing details of outward supplies), for one or more tax periods is more than the amount of outward supplies declared in the GST return Form GSTR-3B (under Section 39 of the CGST Act, 2017 – Furnishing of returns) for the said tax periods.
15Rule 21(g)*If the taxpayer violates the provisions of Rule 86B of the CGST Rules 2017 (Restrictions on use of amounts available in electronic credit ledger), i.e., does not pay the output tax liability in cash

During the pendency of the proceedings of cancellation of GST registration, the registration will be considered suspended. The proper officer will provide an opportunity to be heard to the taxpayer before proceeding to cancel the registration.*

*Changes notified via Notification No. 94/2020-Central Tax dated 22-12-2020. You can refer to our detailed article on this notification here.

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