Under Section 25(8), when a person who is liable to get registration under the GST Act, but has failed to do so, for whatever reasons. And it comes to the notice of an officer, during a survey, inquiry, inspection, search or some other proceedings under the Act. Thereafter, that officer can take action to generate a Temporary ID, on his own initiative. This authority is available to the enforcement officers in Back Office GST Portal, in the manner as prescribed in rule 16 of the CGST Rules, 2017.
During enforcement proceedings, the Tax Officials may collect an amount from unregistered persons and start the Suo Moto GST Registration to get it deposited. For this, an order by FORM GST REG-12 is issued.
Cancellation of Suo Moto Registration
1) Tax Official may initiate for cancellation of Suo Moto GST registration?
The Tax Official can initiate for Suo Moto Cancellation of registration under any of the below provisions mentioned under the GST Act:
- The Taxpayer (or the Primary Authorized Signatory) has not applied for New GST Enrolment within 90 days from the appointed day or any such extended period as specified.
- Got the business registered by means of fraud, suppression of facts or intentional misstatement etc.
- If a Taxpayer has not filed returns for six months, consecutively. In the case of a Composition taxpayer, they have not furnished returns for three tax periods, continuously.
- The person has supplied goods and/or services without issuing an invoice. Violating the provisions of the Act, with an intention to evade tax.
- An issue or bill is issued without an actual supply of goods and/or services. Violating the provisions of the Act, with an intention to evade input tax credit or refund of tax.
- Collects tax but doesn’t deposit it with the respective Government, within 90 days.
- Hasn’t paid tax, interest or penalty to respective Government, within 90 days.
- Misconduct has been proved by the person during any proceeding under the GST Act.
- The Person is not liable to deduct or collect the tax, or even be registered, as per the GST Act.
- The Person has ceased to be liable to deduct or collect the tax, or even be registered, as per the GST Act.
- Death of the person, in case of Sole Proprietorship.
- Transfer, Amalgamation, Merger, Demerger, Discontinuation, Closure, Sale, Lease of Business.
2) Pre-requisite for Suo Moto Cancellation of Registration
The Tax Official has to have a valid reason to initiate Cancellation under Section 29(2) of the CGST/SGST Act.
3) Information of Suo Moto Cancellation of Registration?
A Show Cause Notice has to be given to the Taxpayer and an opportunity to be heard, or file clarification within 7 working days. This Notice is issued by the Tax Official/Proper officer.
4) This Show Cause Notice (SCN) is visible on the GST Portal
The Taxpayer can view the SCN by clicking on View Notices and Orders, under the User Services Tab.
5) Log-in on the GST Portal after the cancellation of Suo Moto Registration
The Tax-payer can still Log-in after Suo Moto Cancellation of Registration, with certain restrictions.
6) What can be amended on the GST Portal after Suo Moto cancellation of Registration?
E-mail ID & mobile number can be updated.
But no changes can be made in the Registration section.
An Application for Revocation (if applicable) is still open for the Cancelled GST Application.
7) What is the effective date of Cancellation of Registration?
The date on the Cancellation Order is the Effective Date.
8) What are the Liabilities of the Taxpayer after Cancellation of Registration?
All liabilities before the date of Suo Moto Cancellation are, still, required to be paid by the taxpayer. If the determining date is later than the date of the Order of Cancellation, still, as the liabilities were incurred before, the Taxpayer will have to pay.
9) When Registration has been Cancelled?
- The Taxpayer is informed by SMS and Email.
- The Order is available to view/print/download at the Taxpayer’s dashboard on the GST Portal.
- Status of the GSTIN will show as “Inactive” from “Proceeding for Cancellation initiated” and information will be sent to the concerned Govt Authorities.
- Returns or Invoices cannot be uploaded on the GST Portal, pertaining to the period after the effective date of cancellation. Also, the GST Payer (GSTP) will not be able to carry out any functions related to GST for any other GSTP after this date.
10) GST Refunds or filing Returns for an earlier period
The Returns can be submitted only for the period before the effective date of Cancellation. Also, another GSTP is not allowed to carry your GSTP functions after the date of Cancellation. GST Refund Procedure remains the same too, i.e. applicable for the earlier period only.
11) Replying to the SCN or filing Clarification
On the GST Portal, go to Services tab, select Registration. There’s an option of Application for Filing Clarifications. If the Taxpayer doesn’t file a Clarification within prescribed 7 working days, the Enforcement Official can proceed with Cancellation of the registration.
12) To view the date for the personal hearing for Clarification
This date is available to view on the GST Portal under the same tab of View Notices and Orders.
13) After the Clarification has been provided?
Ans: In case the Tax Official is satisfied with the response received from the taxpayer, on the SCN issued, the proceedings can be dropped.
a. The Taxpayer is informed by SMS & Email about dropping of the SCN.
b.Order for the dropping of SCN will also be sent by Email and SMS.
c. This Order will, also, be available on the Dashboard.
d. The GSTIN status will change from “Proceeding for Cancellation Initiated” to “Active”.
For more information, you can also check the GST Portal.