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GST Suspension: Government is focusing on making the GST taxation laws more stringent than ever before. A failure to comply with GST regulations may lead to the cancellation/suspension of GST registration which one cannot afford to let happen as it is not lawful to make any taxable supply after the suspension of GST Registration. Many have questions like how to revoke GST suspension, the effects of GST Registration suspension, what to do when the GST number is suspended, and GST suspension revocation rules and procedure. So, let us take a more in-depth look at the reasons and possible measures to help you deal with this GST registration suspension situation.
How do I know if GST registration is suspended?
In simple terms, Suspension refers to "on hold". When a GST registration is suspended, GST registration, taxpayers cannot provide taxable supplies. Suspension of GSTIN is one of the steps before cancellation.
The reasons for cancellation or suspension from GST Registration
If you are a taxpayer If you are a taxpayer, you might be concerned about the reasons behind why you should be concerned that a GST registration might be cancelled, or the fear of being able to have your registration suspended. It is important to note that registration is cancelled without a reason. This is why it's crucial to be aware of any potential GST registration cancellation. Here are some reasons for why your GST registration might be suspended. The reasons are as follows:
1. In the event that there's a change in the structure of your company.
2. If an enterprise is shut down, either merged transferred or shut down.
3. It could be suspended if a taxpayer does not abide by the rules that are in the CGST Act.
4. The taxpayer can opt to apply for a voluntary cancellation of registration and in that instance the appropriate official may place the GST in suspension.
5. In the event that the GST application was made through fraud, the officer is entitled to cancel the registration.
6. Registration is also removed if it is discovered that the company is operated in a different place than the one listed.
7: As per GST regulations, a failure to start the business within six months of GST registration may lead to a cancellation/suspension of the registration.
8. In the event that the taxpayer turns out, issue invoices, without providing either goods or services.
9: If the taxpayer fails to provide accurate bank account details or provide valid bank account details, the registration could be suspended if he fails to comply with an alert.
10. If a person covered by the composition scheme hasn't provided his tax returns for three consecutive tax period.
11. In the event that an individual who is conducting business outside of the scheme of composite, hasn't provided the return for an amount that is six months.
12. If a composed tax-paying person does not file an annual return for a period of three months following the due date, which is 30th April in the following year.
13. If the competent officer discovers any differences:
- Comparing the information on outward supplies provided in Form GSTR-1 and Form GSTR 3B.
- In comparing the details of outward supplies reflected in the GSTR-2B Form with the GSTR-3B Form
- Any other investigation
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The GST Register Suspension
An authorized officer may only suspend registrations if he has grounds to believe that the registration may be liable to being cancelled. The officer could issue an opportunity to be warned or to correct the issue before the GST is removed.
Effects of Consequences GST Suspension
An individual whose membership was cancelled:
- It is not possible to purchase any taxable supplies following suspension.
- Does not have to file returns in accordance with Section 39 under the CGST Act, 2017. The reduction in the burden of compliance is the major benefit that the taxpayer enjoys until the end registration GST registration.
- There is no refund available pursuant to Section 54, during the suspension of registration.
The taxpayer will be informed by the form GST REG-31 of any differences. The form also states that GST could be canceled in the event that the taxpayer fails to give a reason. In addition, the officer could suspend the tax if, in his view the explanation is deemed not satisfactory or incomplete.
What to do after GST Registration Suspension?
If you believe your GST registration was suspended, you should immediately contact an assessor and request activation of your GSTIN. If you do not complete the process promptly it could result in the cancellation of your registration as well as additional penalties for non-compliance of GST regulations.
If the taxpayer hasn't voluntarily requested cancellation of registration but received a notice below are the options you could consider for consideration
1: Upon receiving an error notice
If a taxpayer is served with a notice of discrepancies the taxpayer must provide an explanation to the tax authorities within a month of being served with the notice. The response must include a description of the corrective measures and steps taken to comply with the non-compliances as well as the reason why the tax registration should not be canceled.
2: On receiving a notice of cancellation
In this scenario, one needs to reply to the tax officer using Form GST Reg 18 online through the official GST portal within one month of getting the notice.
3: Receiving a notice due to non-filling of returns
Non-filing of returns is the most common scenario. If the notice for suspension or cancellation of registration is issued on the ground of non-filing of returns, the said person may file all the due returns and submit the response.
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How do I enable GST suspension of Registration?
As a taxpayer registered If you are a registered taxpayer, you may request to renew your GST registration according to GST law in the period of 30 days. However, this can only be granted when a designated GST official suspends your registration. It is not a doubt that the suspension rules give relief to taxpayers to a certain degree, in comparison to the removal of GST number.
The government has simplified the procedure; however, it is still recommended to consult an expert to revoke the suspension of GST registration. Consultation with an GST expert or an accredited CA will help you remain within the law and discover options to resolve being suspended GST registration without any hassle.
Application to Revoke GST Suspension registration
To cancel or revoke or cancel their GST online registration Taxpayers must follow the steps listed below.
- Go to the GST site and log in with "Username" and "Password".
- Go to Services, click GST Registration and then apply for revocation of Cancelled Registration.
- You will be redirected to a new webpage, please give the reason in the "Reason for cancellation box.
- After that, to add any additional documents to the document, select on the "Choose File" option.
- Check for the checkbox next to Verification.
- In the Authorized Signatory drop-down list, select your name as the signatory, then enter the address.
- Utilize the Submit using DSC or Submit using EVC buttons in order to send your application.
- The system will create the ARN and show an acknowledgement message. The registered mobile number as well as e-mail address will also receive an acknowledgement message via the GST Portal.
- You can also save the form you fill out and access it later using the "save" option.
Approval from the Tax Office
- Once they have the information and proven satisfied the appropriate authorities could decide to cancel an exclusion from the GST registration.
- With the approval of the Tax Official the system creates an approval order. The system then sends an email to the applicant and SMS.
- In the event that an Application to Revocation of Cancelled Registration is approved the status of the taxpayer's GSTIN changes from Active to Inactive at the time of the cancellation's date of effect.
Rejection by the Tax Office
- A Tax Official issues the rejection order in response to a refusal to reissue a cancelled registration.
- The taxpayer will be informed through their Primary Authorized Signatory via SMS and emails that inform them that the application was denied and that the GSTIN Status in GST Portal will remain "Inactive". GST Portal remains "Inactive."
- You can access the Rejection Order Receipt accessible from the taxpayer's dashboard.
Functionality of “Automated Drop Proceedings”
Recently, a functionality of “Automated Drop Proceedings” of GSTINs suspended due to non-filing of returns has been implemented on the GST Portal. This functionality is applicable to the taxpayers whose GSTINs have been suspended after December 01, 2022. This functionality is available for the taxpayers who have filed their pending returns i.e. 6 monthly or 2 Quarterly returns.
1. If such taxpayers have filed all their pending returns, the system will automatically drop the proceedings and revoke suspension.
2. If the status of the GSTIN does not automatically turn ‘ACTIVE’, then taxpayers are advised to revoke the suspension once the due returns have been filed, by clicking on ‘Initiate Drop Proceeding’ for which navigation is as follows:
“Log on to GST Portal > Services > User Services > View Notices and Orders > Initiate Drop Proceeding”
3. In case the system does not automatically drop the proceedings or taxpayer is unable to revoke the suspension by clicking on ‘Initiate Drop Proceeding’, then taxpayer is advised to contact Jurisdictional Officer.
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The functionality for "Automated Drop Proceedings"
Recently, a feature called "Automated Drop Proceedings" of GSTINs that have been suspended because of filing of returns not being filed was added to GST Portal. GST Portal. This feature is available to taxpayers whose GSTINs were suspended on or after December 01 2022. This feature is available to taxpayers who have submitted their unfinished returns i.e. six monthly or two quarterly returns.
1. If these taxpayers have submitted all of their tax returns that are pending the system will then end the process and cancel the suspension.
2. In the event that the status for the GSTIN is not immediately changed to 'ACTIVE' then taxpayers should remove the suspension after the tax returns due are filed. This can be done by clicking "Initiate Drop Proceeding" for which the navigation is as follows:
"Log on to GST Portal > Services > User Services > View Notices and Orders > Initiate Drop Proceeding"
3. If the system is unable to immediately end the proceedings, or if the taxpayer is not able to cancel the suspension clicking Initiate Drop Proceeding and then 'Initiate Drop Proceeding', the taxpayers should get in touch with the Jurisdictional Officer.
