What if GST Registration is Cancelled?

What if GST is Cancelled

What if GST Registration is Cancelled?

In recent times we have seen cancellation of GST registration. What to do in such a case? How to renew canceled registration? Before knowing the things, let’s know the reasons for cancellation of original registration.

Cancellation of registration under GST is of two types. First. It can happen at the request of the businessman. That means they can apply for GST waiver when their business is fully exempted from tax, when the business is closing down or when the business is being merged with another company. The authorities will cancel the registration after conducting an inquiry on issues such as tax arrears, need to rework Input Tax Credit (ITC), pending returns etc.

Apart from that, the authorities also have the power to cancel the registration of the business establishments in case of certain types of violations. For example if ITC is drawn without eligibility, invoices are issued without supply, business is not carried on from the declared address, voluntary registration is not commenced within six months, person registered under composition scheme does not file return within three months after the due date, monthly filers for six consecutive months, If the return is not filed for two periods, the registration will be cancelled. In the meantime, most of the cases that are canceled are due to non-filing of returns. So besides taking proper precautions in other matters, it should be ensured that returns are filed on time.

If the registration is canceled by the authorities, an application can be made for restoration. This is known as ‘Revocation of Cancellation of Registration’. It has some conditions. Application for revocation should be made within 90 days from the date of order of cancellation of registration. Additional time of 180 days can be obtained from concerned authorities by showing proper reasons. However, if the registration is canceled due to non-filing of returns. Along with filing the respective returns, the related tax, interest, penalty and late fee have to be paid. Only then application for revocation should be made. Also, if any returns are pending from the date of cancellation to the date of revision, they should be filed within one month from the date of revision.

Another thing is that there is no requirement that every application for revocation be approved. The authorities have the power to reject the application if the reasons shown are not satisfactory. But a notice has to be issued first. Another thing to note here is that even if the registration is cancelled, one must pay all dues to the government till the time of cancellation. Further, if ITC is taken, the credit should be reversed in the prescribed manner on inputs and capital goods remaining with him at the time of cancellation. So everyone who has registration in GST should have full knowledge about these things.

Note: Some key points are mentioned in this only for creating awareness. The relevant laws should be carefully examined for complete details.

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