29.2.1 Circumstances when RP may file an application for cancellation of Registration

Question-1 [ICMAI-I-J19-1d-1]

In case of death of a tax payer _____________ can request for cancellation of registration.

29.3.1 Circumstances where PO may cancel registration on his own motion

Quesiton-1 [ICAI-I-M22-8b-5] [Cancellation of registration by PO]

State any five circumstances under which the proper officer can cancel the registration on his own under the CGST Act, 2017.

Answer

Section 29(2) read with Rule 21

PO may cancel the registration from such date, including any retrospective date, as he may deem fit, where,–

(a) a RP has contravened such provisions of the Act or the rules made thereunder as may be prescribed [Rule 21]; or

(b) a Composition Dealer paying tax u/s 10 has not furnished the return for a FY beyond 3 months from the due date of furnishing the said return; or

(c) any RP, other than composition dealer, has not furnished returns for such continuous tax period as may be prescribed; or

(d) any person who has taken voluntary registration u/s 25(3) has not commenced business within 6 months from the date of registration; or

(e) registration has been obtained by means of fraud, wilful misstatement or suppression of facts:

Quesiton-1A [ICSI-P-D22-3b-4] [ICAI-I-Jan21-8b-5]

Explain circumstances when the Proper Officer can cancel registration under GST laws on his own.

Quesiton-1B [ICSI-P-D21-O-4b-5]

What are the circumstances under which GST registration may be cancelled by the proper officer u/s 29(2) of CGST Act, 2017 ?

Question-2 [ICSI-E-J22-52-1]

When can a registration be liable to cancellation:

(i) If the person does not conduct business from the declared place of business

(ii) Violates the provision of Rule 86B

(iii) Non-filing of returns for a continuous period of six months or for three consecutive tax period in case of composite dealer

(A) (i) & (ii) (B) (i) & (iii) (C) Only (i) (D) (i), (ii) & (iii)

Question-3 [ICAI-I-Ch7-Ex18] [Willful mis-statement, fraud]

What happens when the registration is obtained by means of willful mis-statement, fraud or suppression of facts?

Answer

In such cases, the registration may be cancelled with retrospective effect by the proper officer [Section 29(2)(e)].

Question-4 [ICAI-I-N18-11a(i)-1.5] [Not commenced business]

Determine with brief reasons, whether the following statements are True or False:

Registration under the CGST Act, 2017 can be cancelled by the proper officer, if the voluntarily registered person has not commenced the business within three months from the date of registration.

Answer

The said statement is False.

Registration under the CGST Act, 2017 can be cancelled by the proper officer, if the voluntarily registered person has not commenced the business within six months from the date of registration.

Question-4A [ICAI-F-N19-4b-4]

Dharma Dutta has taken voluntary registration and has not opted for the composition scheme of levy. He is aggrieved by the cancellation of his registration under GST, although he is filing Nil return, as he has not conducted any business for the past 8 months. He wants to know the circumstances under which proper officer can cancel registration on his own.

Question-4B [ICSI-E-D21-O-87-1] [ICSI-E-D22-78-1]

The proper officer may cancel the registration of a person from such date, including any retrospective date, he may deem fit, where any person who has taken voluntary registration under section 25(3) of CGST Act, 2017 has not commenced business within.............from the date of voluntary registration.

(A) 3 months; (B) 6 months; (C) 1 year; (D) 2 years

Quesiton-5 [ICSI-E-J19-O-90-1] [Non filing of return by composition dealer]

The proper officer may cancel the GST registration, if any registered person other than a person paying tax under section 10 of CGST Act, 2017 has not furnished the returns for a continuous period of:

(A) 12 months; (B) 9 months; (C) 6 months; (D) 3 months

Question-6 [ICMAI-I-J19-6b-3] [Cancellation of Registration]

Discuss the circumstances where registration is liable to be cancelled.

Answer

Section 29(1) of the CGST Act, 2017 provides that the proper officer may, either on his own motion or on an application filed by the registered person or by his legal heirs, in case of death of such person, cancel the registration, in such manner and within such period as may be prescribed, having regard to the circumstances where:

1. the business has been discontinued, transferred fully for any reason including death of the proprietor, amalgamated with other legal entity, demerged or otherwise disposed of; or

2. there is any change in the constitution of the business; or

3. the taxable person, other than the person registered under sub-section (3) of section 25, is no longer liable to be registered under section 22 or section 24

Further, section 29(2) of the CGST Act, 2017 provides that the proper officer may cancel the registration of a person from such date, including any retrospective date, as he may deem fit, where, —

A. a registered person has contravened such provisions of the Act or the rules made thereunder as may be prescribed; or

B. person paying tax under section 10 has not furnished returns for three consecutive tax periods; or

C. any registered person, other than a person specified in clause (b), has not furnished returns for a continuous period of six months; or

D. any person who has taken voluntary registration under sub-section (3) of section 25 has not commenced business within six months from the date of registration; or

E. Registration has been obtained by means of fraud, wilful misstatement or suppression of facts further, the proper officer shall not cancel the registration without giving the person an opportunity of being heard.

29.3.6.2 If person furnishes all pending returns and makes full payment

Question-1 [ICSI-E-D19-82-1]

The proper officer, if has reasons to believe that the registration of a person is liable to be cancelled under section 29 of CGST Act, then he shall issue a notice to such person in Form ...................... and after considering the reply furnished by such person shall pass on order to drop proceedings in Form........................

(A) GST REG-16, GST REG-17

(B) GST REG-17, GST REG-18

(C) GST REG-17, GST REG-19

(D) GST REG-17, GST REG-20

29.4.5 Provision of Revised Invoice and First Return shall apply on Revocation of Suspension

Question-1 [ICAI-I-Jan21-8b-5]

Under the provision of section 29(1) of CGST Act, 2017 read with rule 21A of CGST Rules, 2017 related to suspension of registration if the registered person has applied for cancellation of registration, what is the period and manner of suspension of registration?

Answer

Where a registered person has applied for cancellation of registration, the registration shall be deemed to be suspended from:

(a) the date of submission of the application or

(b) the date from which the cancellation is sought, whichever is later, pending the completion of proceedings for cancellation of registration. Such person shall not make any taxable supply during the period of suspension and shall not be required to furnish any return.

The expression “shall not make any taxable supply” mean that the registered person shall not issue a tax invoice and, accordingly, not charge tax on supplies made by him during the suspension period.

29.7 Reversal of ITC/Payment of Tax on cancellation of Registration

Question-1 [ICSI-E-D18-6c-3]

State when a registration granted under the CGST Act, 2017 to a taxable person can be cancelled and what should be done by such person after cancellation of registration in the electronic cash ledger or electronic credit ledger?                          

Answer

As per section 29 of CGST Act, 2017 the proper officer may either himself or on application filed by a registered person, or his legal heirs in case of a death of a registered person, cancel/revoke the registration of such person.

This cancellation could be from a prospective/retrospective date as the officer may deem fit. This cancellation would in no way interfere with the liabilities of the said person relating to the taxes and other dues.

A registered person whose registration is being cancelled will have to debit the electronic cash ledger or the electronic credit ledger equivalent to the credit of input tax in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock or capital goods or plant and machinery on the day immediately preceding the date of such cancellation or the output tax payable on such goods, whichever is higher.