Under GST, Notices act as a medium to communicate to the taxpayers by the GST Authorities. These are sent to the taxpayers specifically to remind or caution them of any defaults being noticed, specifically for not following the GST laws and provision. Taxpayers must promptly act or reply to notices within the prescribed time limit. Any failure to do so can land the taxpayer in a legal soup.
In this article, we’ll talk about the process to reply to the GST registration cancellation notice issued by the proper officer and the reasons which can give rise to such situations. Form GST REG-18 is used when a registered taxpayer has to file a reply to the show cause notice issued by authorities for cancellation of his/her GST registration .The form can be filed online on the GST Portal.
Reasons for receiving notice in Form GST REG-17
If the proper officer has valid reasons to believe that the GST registration of a person is liable to be canceled under section 29, he shall issue a notice to such person in Form GST REG-17, requiring him to show cause, within a period of seven working days from the date of the service of such notice, citing reason on why his registration shall not be canceled.
The proper officer can initiate the cancellation proceedings if any of these circumstances arise:
↪ In case of non filing of returns by a taxpayer registered under the composition scheme for three straight years.
↪ Non-filing of returns for six continuous periods by a taxpayer other than composition taxpayer.
↪ In case an individual has taken voluntary GST registration but has not started a business within six months of registration.
↪ Violation of any provisions of the GST Act or Rules by a taxpayer.
↪ Using fraud or falsification methods to obtain GST registration
↪ Taxpayer avails input tax credit in violation of the provisions of section 16 of the Act or actions related to tax evasion
↪ In case a taxpayer fails to pay tax, interest or penalty to the GST department within three months from the date of such payment.
↪ Closure of business of the taxpayer.
↪ Death of sole proprietor.
↪ Change in constitution of the taxpayer leading to change in PAN.
↪ The concerned person is no longer required to be registered under GST or required to collect or pay tax.
↪ Transfer of business due to merger or amalgamation.
Responding to the notice issued in Form GST REG-17
Form GST REG-18 is to be filed in response to a notice received by the taxpayer for the cancellation of his/her GST registration. Taxpayers must reply to the notice within 7 days of issuance of the notice giving the explanation or citing valid reasons of safeguarding the cancellation of registration.
Coverage of reply in Form GST REG-18
The reply in Form GST REG-18 shall covers the following details-
↪ The reference Number of the notice issued in Form GST REG-17.
↪ Date of issue of notice in Form GST REG-17.
↪ GST registration number of the person.
↪ Legal name Trade name(if any) of the business
↪ Reply to the notice including supporting documents.
↪ Verification box.
Filing online reply in Form GST REG-18
According to the provisions, on receipt of the notice in Form GST REG-17, if aggrieved, the taxpayer needs to file the appropriate reply. Such reply is to be filed online and in Form GST REG-18.
Following steps should be followed for filing an online reply in Form GST REG-18-
STEP 1 – Visit the GST Portal site www.gst.gov.in and log into your taxpayer account by entering your username and password details.
STEP 2 – Select as given- Services > Registration > Application for Filing Clarifications.
STEP 3 – Enter the available Reference Number of Notice or Application Reference Number (i.e. ARN).
STEP 4 – By clicking the ‘Search’ button, Form GST REG-18 will be displayed on the page.
STEP 5 - Provide your reply on the page, including relevant supporting documents.
STEP 6 - Click ‘Submit’ when you’re done.
The proceedings will be dropped by the officer if the reply is found to be acceptable and he/she’ll pass an order in form GST REG–20. But if the registration is no longer liable or the person’s GST registration is liable to get canceled, the proper officer shall issue an order in Form GST REG-19, within a period of thirty days from the date of application submitted or the date of the reply to the show cause, cancel the registration, with effect from a date to be determined by him and notify the taxable person, directing him to pay tax, or any interest or penalty including the amount liable to be paid under sub-section (5) of section 29.