Automatic cancellation of Goods and Services Tax (GST) registration refers to instances where a tax officer initiates the cancellation process independently. As per Section 29(2) of the CGST Act, the officer must provide clear reasons for this suo moto action before proceeding.

Criteria for Tax Officer Initiated GST Registration Cancellation

Suo moto cancellation can be initiated if any of the following conditions are met by the taxpayer:

• Non-compliance with the CGST Act or its associated rules by the taxpayer.
• Registration obtained through fraudulent means, suppression of information, or factual misrepresentation.
• Voluntary registrants failing to commence business operations within six months of obtaining GST registration.
• Failure to apply for GST enrollment within 90 days of the appointed date, or any extended period.
• Absence of business activities at the registered place of business.
• Consecutive failure to file GST returns for six months (for regular taxpayers) or two quarters (for quarterly filers). For composition taxpayers, this period is three months.
• Supplying goods or services without issuing invoices, in violation of the CGST Act, with the intent to evade taxes.
• Issuing invoices without actual supply of goods or services, thereby infringing the Act to illicitly claim input tax credit or tax refunds.
• Non-remittance of collected taxes to the government treasury within 90 days.
• Failure to pay due taxes, interest, or penalties to the government within 90 days.
• Engaging in misconduct during any official proceedings under the GST Act.
• Situations where a person is no longer obligated to deduct or collect taxes under GST laws, or was never liable.
• Cessation of the requirement for GST registration under legal provisions.
• In the case of a sole proprietorship, the demise of the sole proprietor.
• Business restructuring events such as amalgamation, transfer, merger, or demerger.
• Changes in business constitution that result in an alteration of the Permanent Account Number (PAN).
• Discontinuation or permanent closure of the business.
• Violation of Section 171 of the CGST Act or related rules, pertaining to anti-profiteering measures.
• Violation of Rule 10A of the CGST Rules, specifically providing incorrect or false bank account information.
• Claiming input tax credit in contravention of Section 16 of the CGST Act or its associated rules.
• Reporting higher outward supply details in GSTR-1 compared to GSTR-3B.
• Breaching Rule 86B of the CGST Rules, which restricts input tax credit utilization from the electronic credit ledger.
• Infringing the third or fourth proviso to Rule 23(1) of the CGST Rules, concerning the revocation of GST registration cancellation.

Steps for Tax Officer Initiated GST Registration Cancellation

• GST regulations require the tax officer to issue a show-cause notice, granting the taxpayer a chance to be heard. The taxpayer must reply to this notice within seven working days, explaining why their registration should not be cancelled.
• Taxpayers can respond to a suo moto cancellation show-cause notice by going to Services > Registration > Application for Filing Clarifications on the GST portal.
• Based on the submitted response, if the tax officer finds it satisfactory, they may discontinue the cancellation proceedings. The taxpayer will be notified of this decision via SMS or email.
• Should no response be received within seven working days, or if the officer deems the response inadequate, the GST registration may be cancelled.

Responding to a Show-Cause Notice for Automatic GST Registration Cancellation

To submit a reply for a suo moto GST registration cancellation show-cause notice, access the GST portal and select Services > Registration > Application for Filing Clarifications. This section will present the application form for submitting clarifications. The tax officer's stated reasons for cancellation will be visible, and the taxpayer must provide a specific response for each invoked reason.

Reactivating Automatically Cancelled GST Registration

To reactivate a cancelled GST registration:

1. Log in to the official GST portal (www.gst.gov.in).
2. From the dashboard, go to 'Services', then 'Registration', and choose 'Application for Revocation of Canceled Registration'.
3. Fill in the necessary details, specify the reasons for revocation, and attach supporting documents.
4. Tick the verification checkbox and select the authorized signatory.
5. Submit the application using either 'Submit with DSC' (Digital Signature Certificate) or 'Submit with EVC' (Electronic Verification Code), as appropriate.

Upon successful submission, a confirmation message will appear. If the GST officer approves the provided justifications, they will revoke the cancellation order within 30 days of receiving the application. The officer formalizes this by signing an order in Form GST REG-22, thereby reinstating the GST registration. Consequently, the assessee regains active taxpayer status, with full portal access restored, and their profile and registration certificate are updated.

Consequences of Automatic GST Registration Cancellation

• When tax authorities cancel a GST registration, the taxpayer receives notification via SMS and email.
• A formal cancellation order is issued and communicated to the primary authorized signatory via email and SMS.
• This order is also accessible on the taxpayer’s dashboard for viewing, printing, and downloading.
• The status of the GSTIN/UIN/GSTP ID changes from ‘Proceeding for Cancellation initiated’ to ‘Inactive’, and other relevant tax authorities are informed.
• After the cancellation date specified in the order, the taxpayer can no longer file returns or upload invoices. A GST Practitioner (GSTP) also loses the ability to perform GSTP functions for any taxpayer for periods following this date.
• Post-cancellation order issuance, taxpayers are restricted from amending registration details, apart from updating their email address and mobile number, until all outstanding dues or refunds are resolved.
• The option to file an application for revocation, if eligible, remains accessible for such cancelled GST registrations.

Frequently Asked Questions

Where can one view the show cause notice relating to the cancellation of registration?

Taxpayers can view any show-cause notice issued for suo moto cancellation of registration by navigating to Services > User Services > View Notices and Orders.

What is considered to be the effective date of GST suspension?

If the taxpayer initiated the cancellation, the suspension date is the application filing date. If the officer initiated it, the suspension date is when the notice for Cancellation of registration (Form GST REG-17) is issued.

What changes can be carried out on the GST portal after suo moto cancellation of GST registration?

Only details relating to the e-mail ID and the taxpayer’s mobile number can be updated.

Would taxpayers be allowed to file returns for an earlier period after the cancellation of registration?

Yes, taxpayers can file returns for periods before the suo moto cancellation date. However, they cannot file returns or upload invoices for periods after the cancellation date. Additionally, GSTR-10 must be filed within three months from the cancellation date or the GST order issue date, whichever is earlier.

Can taxpayers submit an application for cancellation of registration in a case where suo moto cancellation of registration is already initiated?

No, once suo moto cancellation by a tax officer is initiated, such an application cannot be made.

What is suo moto cancellation of registration under GST?

Suo moto cancellation of GST registration means that a tax officer cancels the registration under GST laws on their own initiative.

How to check suo moto cancellation in GST?

The taxpayer can log in to the GST portal and navigate to Services > User Services > View Notices and Orders to view the show-cause notice regarding suo moto cancellation of GST registration.

How do you respond to suo moto cancellation of GST registration?

To reply to a show-cause notice related to suo moto cancellation, a taxpayer can navigate to Services > Registration > Application for Filing Clarifications.

How to reactivate GST number after suo moto cancellation?

A taxpayer must file an application on the GST portal by logging in and navigating to ‘Services’ on the dashboard, then selecting the ‘Registration’ > ‘Application for Revocation of Cancelled Registration’ option. If the GST officer is satisfied with the justification, they will sign an order in Form GST REG-22, revoking the GST registration cancellation.

What is GSTR 10 for suo moto cancellation?

If a taxpayer's GST registration has been cancelled, they must file GSTR-10 within three months of the cancellation date or the date of the cancellation order, whichever comes first.

What is a suo moto notice?

The GST law mandates that a tax officer serves a show-cause notice to a taxpayer in the case of suo moto cancellation of GST registration, providing them with an opportunity to be heard. The taxpayer, in response to the show-cause notice, needs to explain why the registration should not be cancelled.

What happens after suo moto cancellation?

Once a GST registration is cancelled by the tax authorities, the taxpayer will be intimated via SMS and Email. An order for cancellation will be issued and sent to the primary authorised signatory. The order will be available on the taxpayer’s dashboard. The GSTIN/UIN/GSTP ID status will change to ‘Inactive’. The taxpayer cannot file returns or upload invoices for the period after the cancellation date, nor amend registration details (except email/mobile) until dues/refunds are cleared. The facility to file a revocation application remains available.

What is the time limit to apply for revocation of suo moto cancellation?

As per CGST notification no: 38/2023, the time limit for taxpayers to apply for the revocation of a cancelled GST registration is now 90 days from the date of the service of the cancellation order, effective from 1st October 2023, instead of the previous 30 days.