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GST Revocation

In the Goods and Services Tax (GST) regime in India, revocation of cancellation is a critical process that allows a taxpayer to reinstate their GST registration after it has been cancelled by the tax authorities. It essentially means reversing the decision of cancellation.

 

When is Revocation of Cancellation Applicable?

The revocation process is applicable only when the GST registration has been cancelled by the proper officer on their own motion (suo-moto cancellation). It is NOT applicable if the taxpayer voluntarily applied for cancellation of their GST registration. Once a voluntary cancellation is processed, the GSTIN cannot be reactivated; a new registration would be required if the business becomes liable for GST again.

Common Reasons for Suo-Moto Cancellation by Officer:

  • Non-filing of Returns:

    • Regular Taxpayer: Not furnishing returns for a continuous period of six months (or more than six months).

    • Composition Dealer: Not furnishing returns for three consecutive tax periods (quarters).

  • Non-Commencement of Business: If a taxpayer who has taken voluntary registration (i.e., not liable for mandatory registration) does not commence business within six months from the date of registration.

  • Violation of GST Provisions: Contravention of provisions of the GST Act or Rules (e.g., issuing invoices without supply of goods/services, availing ITC fraudulently).

  • Obtaining Registration by Fraud: If registration was obtained by means of fraud, willful misstatement, or suppression of facts.

  • Non-payment of Tax: Failure to pay tax, interest, or penalty within three months from the due date.

When a GST officer initiates cancellation, they typically issue a show-cause notice (Form GST REG-17) to the taxpayer, giving them an opportunity to explain why their registration should not be cancelled. If the officer is not satisfied with the reply or if no reply is received, an order for cancellation (Form GST REG-19) is issued.

 

The Revocation Process (Form GST REG-21)

Once the GST registration is cancelled by the officer, the taxpayer can apply for revocation of cancellation to reinstate their registration.

1. Eligibility and Pre-conditions:

  • Cancellation by Officer: The registration must have been cancelled by the proper officer on their own motion.

  • File Pending Returns: If the cancellation was due to non-filing of returns, the taxpayer must first file all pending GST returns (GSTR-1, GSTR-3B, etc.) up to the date of cancellation and pay all outstanding taxes, interest, late fees, and penalties. The system will not allow the filing of the revocation application (Form GST REG-21) until all such dues are cleared.

  • Adhere to Time Limit: This is crucial.

2. Time Limit for Application (FORM GST REG-21):

  • The application for revocation of cancellation must be submitted in FORM GST REG-21.

  • The standard time limit for filing this application is within 90 days from the date of service of the cancellation order (Form GST REG-19) at the Common Portal.

  • Extension by Commissioner: This 90-day period can be further extended by the Commissioner or an officer authorized by him (not below the rank of Additional Commissioner or Joint Commissioner) for a further period not exceeding 180 days, provided sufficient cause for the delay is shown and reasons are recorded in writing. This means a maximum possible window of 90 + 180 = 270 days.

3. Step-by-Step Online Process:

  1. Login to GST Portal: Go to www.gst.gov.in and log in with your GSTIN and credentials.

  2. Navigate: Go to Services > Registration > Application for Revocation of Cancellation of Registration.

  3. Fill Form GST REG-21:

    • The form will auto-populate some details like GSTIN, Legal Name, Trade Name, Principal Place of Business address, and the Cancellation Order Number and Date.

    • Reason for Revocation: Provide clear and detailed reasons for the cancellation and why the registration should be revoked. This is where you explain the circumstances that led to the non-compliance and steps taken to rectify it.

    • Last Return Filed Details: Provide the period and ARN of your last filed return before cancellation.

    • Upload Documents: Attach any supporting documents that substantiate your reasons for revocation (e.g., evidence of business operations, proof of return filing, payment challans).

  4. Verification and Submission:

    • Check the verification box, select the Authorized Signatory, and the Place.

    • Submit the application using a Digital Signature Certificate (DSC) (mandatory for companies and LLPs) or Electronic Verification Code (EVC) (for other taxpayers like proprietorships and partnerships).

    • An Acknowledgement Reference Number (ARN) will be generated upon successful submission.

4. Officer's Action After Application:

  1. Review by Officer: The proper officer will review the application and the reasons provided.

  2. Order of Revocation (FORM GST REG-22): If the officer is satisfied that there are sufficient grounds for revocation, they will issue an order in FORM GST REG-22 revoking the cancellation of registration. This order should ideally be issued within 30 days from the date of receipt of the application (FORM GST REG-21). The reasons for revocation must be recorded in writing.

  3. Show Cause Notice for Rejection (FORM GST REG-23): If the proper officer is NOT satisfied with the application, they cannot simply reject it. They must first issue a show-cause notice in FORM GST REG-23, asking the applicant to explain why their application for revocation should not be rejected.

  4. Reply to Show Cause Notice (FORM GST REG-24): The applicant must respond to the show-cause notice in FORM GST REG-24 within 7 working days from the date of service of the notice.

  5. Final Decision (FORM GST REG-22 or REG-05): After considering the reply in FORM GST REG-24, the officer will make a decision:

    • If satisfied, they will issue an order in FORM GST REG-22 (revocation granted).

    • If still not satisfied, they will issue an order in FORM GST REG-05 rejecting the application for revocation, stating the reasons for rejection. This decision should also be made within 30 days from the date of receiving the clarification from the applicant in FORM GST REG-24.

5. Post-Revocation Compliance:

  • Filing Pending Returns: If the registration was cancelled retrospectively, the taxpayer will be required to furnish all returns for the period from the effective date of cancellation till the date of revocation order within 30 days from the date of the revocation order.

  • Compliance Resumes: Once the revocation is successful, the GSTIN becomes active again, and the taxpayer must resume normal GST compliance, including filing regular returns and paying taxes.

Importance of Revocation:

Successful revocation of GST registration is crucial for businesses as it restores their ability to:

  • Legally collect GST from customers.

  • Issue GST-compliant invoices.

  • Claim Input Tax Credit (ITC) on their purchases.

  • Continue business operations without disruption and avoid penalties for unregistered supplies.

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