Restoring Canceled GST Registration
This article explains the process for restoring a Goods and Services Tax (GST) registration that has been canceled by a tax officer. It details the steps for filing Form GST REG-21 to apply for revocation, including prerequisites like filing pending returns. The content also covers recent time extensions for such applications and outlines the procedures for responding to a show-cause notice (Form GST REG-23) with Form GST REG-24, leading to either approval or rejection of the revocation request.
When a tax official cancels a taxpayer’s GST registration on their own initiative, the affected taxpayer has the option to apply for its revocation or restoration through the GST portal.
Form GST REG-21: Request for Reversing GST Registration Cancellation
A taxpayer whose registration has been canceled by the proper officer can apply for its reversal by submitting Form GST REG-21. This application must be filed within 30 days of receiving the cancellation notice for the GST registration.
If the cancellation by the proper officer was due to the non-filing of returns, the reversal application (GST REG-21) can only be submitted after all outstanding returns are filed, along with any applicable interest and penalties.
Steps to Submit GST REG-21:
- Step 1: Access the GST portal, then navigate to ‘Services’ > ‘Registration’ > ‘Application for revocation of GST registration cancellation.’
- Step 2: Provide the necessary information and state the reasons for requesting the reversal of the GST registration cancellation. You can also attach supporting documents. After completing all details, check the verification box, select the authorized signatory, and specify the location.
- Step 3: Submit Form GST REG-21 using either a Digital Signature Certificate (DSC) or Electronic Verification Code (EVC). A confirmation message will confirm the successful submission of the application.
Extended Period for Applying for Revocation
The department released notification no: 03/2023, extending the deadline for applying to revoke GST registration cancellations. Key points include:
- GST registrations canceled on or before December 31, 2022, due to unfiled tax returns are eligible for revocation applications.
- This provision applies to taxpayers who missed the initial 30-day window for revocation after the cancellation order.
- Taxpayers could apply for revocation until June 30, 2023.
- The revocation application is contingent upon filing all pending GST returns up to the date of registration cancellation.
- Taxpayers are required to settle any tax liabilities, including interest, penalties, and late fees.
- Certain taxpayers whose appeals were rejected due to time limit restrictions are also eligible to apply for revocation, specifically those who appealed against:
- An order of cancellation.
- An order rejecting a previous revocation application.
On September 6, 2021, the CBIC issued CGST circular 158/14/2021-GST, clarifying the applicability of CGST Notification no. 34/2021, dated August 29, 2021. This notification temporarily extended the deadline for filing revocation applications for GST registration cancellations to September 30, 2021, if the original due date fell between March 1, 2020, and August 31, 2021.
Many taxpayers sought clarification on whether this relief applied to their specific situations. The CBIC's GST Circular subsequently clarified that the relief was available regardless of the revocation application's status (e.g., applied, under processing, rejected, or with an appellate authority), as detailed in the table below:
| S.No | Status of Application for Revocation of GST Registration Cancellation | Taxpayer's Required Actions |
|---|---|---|
| 1 | Yet to be filed by the taxpayer. | Submit application on or before September 30, 2021. |
| 2 | Application submitted but awaiting officer's decision. | No action needed from the taxpayer. The officer must process the application considering the extended deadlines. |
| 3 | Application filed but rejected by the officer, with no appeal lodged by the taxpayer against the rejection. | A new application can be filed on or before September 30, 2021. |
| 4 | Appeal filed against rejection of the revocation application and is pending with the appellate authority. | No action needed from the taxpayer. The appellate authority must process the appeal factoring in the extended timeline. |
| 5 | Application rejected by the officer and the appellate authority also ruled against the taxpayer. | The taxpayer must submit a new application on or before September 30, 2021. |
Effective January 1, 2021, a new proviso was introduced into Section 30 of the CGST Act, allowing for extensions of the revocation application due date. These extensions could be for 30 days, upon approval by an Additional/Joint Commissioner or the Commissioner.
Taxpayers questioned if further 30 or 60-day extensions, based on approval, could be taken beyond September 30, 2021, due to this provision. The CBIC provided the following clarifications:
| Sl No | Situation | Latest Date for Revocation Application |
|---|---|---|
| 1 | If the 30-day time limit for applying for revocation fell between March 1, 2020, and December 31, 2020. | September 30, 2021 |
| 2 | If the 30-day time limit had not yet expired by January 1, 2021, or if the GST registration was canceled on or after January 1, 2021. | |
| The 90-day period had lapsed by August 31, 2021. | September 30, 2021 | |
| The 60-day period had lapsed by August 31, 2021. | October 30, 2021 (If approved by the Commissioner after September 30, 2021) | |
| The 30-day period had lapsed by August 31, 2021. | October 30, 2021 (If approved by the Joint/Additional Commissioner after September 30, 2021) or November 29, 2021 (If approved by the Commissioner after October 30, 2021) |
This extension is exclusively available for cancellations arising from:
- A composition dealer failing to file returns for three consecutive quarters.
- A regular taxpayer failing to file returns for six consecutive periods.
Form GST REG-23: Notice for Proposed Rejection of Revocation Application
The appropriate officer will review the revocation application submitted in Form GST REG-21. If the officer is not satisfied with the application, a show-cause notice will be issued to the taxpayer in Form GST REG-23. This notice will explain the reasons for the proposed rejection and ask the taxpayer to demonstrate why their application should not be refused.
The taxpayer is given an opportunity to provide reasons against the proposed cancellation of their GST registration. An assessee who receives a notice in Form GST REG-23 must respond in Form GST REG-24 within seven working days from the notice's issue date.
If the officer is satisfied with the revocation application: The officer will record the reasons in writing and issue an order for the revocation of GST registration using Form GST REG-22 within 30 days of receiving a reply to Form GST REG-21.
Form GST REG-24: Responding to a Show-Cause Notice (Form GST REG-23)
If an assessee receives a notice in Form GST REG-23, they must submit a reply in Form GST REG-24 within seven working days from the date the Form GST REG-23 notice was served.
Form REG-24 requires the following information:
- Reference number and date of the notice.
- Reference number and date of the original application.
- GSTIN.
- Reasons justifying the revocation request.
- Any supporting documents to be attached.
The tax officer will verify the response provided in Form GST REG-24.
If satisfied: The officer will issue an order for the revocation of GST registration in Form GST REG-22 within 30 days of receiving the reply in Form GST REG-24.
If unsatisfied: Should the tax officer deem the provided reasons inadequate, they can reject the application by issuing an order in Form GST REG-05.