Suspension of GST Registration

Introduction:

Nowadays the GST department has come up with all new weapons to mitigate non-compliances under GST. The suspension of GST registration under GST helps the GST officer to identify the fraud-causing circumstances and prevent it before it actually takes place. There are certain parameters and criteria on the basis of which GST officers suspend GST registration.

Rule 21A of CGST Rules, 2017 lists out such circumstances or parameters on the basis of which the registration shall stand suspended.

Brief about Rule 21A of CGST Rules, 2017:

• According to sub-rule (1) of rule 21A, when any registered person applies for the cancellation of GST registration then the GST registration shall be deemed to be suspended from the date of submission of the application of cancellation or from the date from which the cancellation is sought until the whole cancellation process gets completed. This means that once you file the application for cancellation, the GST number shall be deemed to be suspended from the date of submission of the cancellation application until the cancellation application gets approved and the cancellation order is served to the applicant.
• There are a few other circumstances also where the GST department thinks it necessary to suspend the GST registration. Such circumstances are listed below.

1. When the GST officer has a reason to believe that the GST registration of a person is liable t be cancelled then he may suspend the GST registration until the whole process f cancellation gets completed.
2. When there are significant differences between the outward supplies furnished in GSTR-1 and GSTR-3B.
3. When there are significant differences between the ITC taken in GSTR-3b and the details of outward supplies furnished in the GSTR-1 of the suppliers.
4. Significant contravention of law noticed on comparison of documents by a proper officer which may lead to cancellation of GST registration. Such persons shall be intimated the suspension of their GST registration either electronically on GST common portal or through Email at the address provided by them at the time of registration. Such notice cum intimation issued by the proper officer contains the differences or anomalies noticed and the assessee is asked to provide justification or clarification as to why his/her registration should not be cancelled.

• The person whose registration gets suspended shall not make any taxable supplies during the period of suspension and cannot furnish any returns during the period of suspension. This means that the registered person cannot collect the tax on their outward supplies during the period of suspension.
• The registered person whose registration has been suspended shall not be granted a refund during the period of suspension.
• As per sub-rule 4 of Rule 21A, the suspension of registration shall be deemed to be revoked upon completion of proceedings by the proper officer.

But, practically it is not getting deemed revoked if the suspension was imposed due to non-filing of GST returns. Since the powers to remove the suspension vests are with the jurisdictional Assistant Commissioner, you need to visit the GST department and get it revoked.

Concluding remarks:

The suspension of GST registration is generally imposed due to the non-filing of GST returns within the due dates. So, it is well-accepted practice to file all necessary GST returns on time. Moreover, there are even certain cases where GST registration gets suspended due to filing of “NIL” returns for a continuous period of more than 6 months. So, it is most advisable to take GST registration only when you actually start running the business.