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Suspension of GST Registration

  • Posted By SuperCA
  • On 31 August

Suspension of GST Registration



With an intention to ease up GST for the taxpayer, the government is continuously amending and inserting various provisions under the GST regime. Suspension of GST registration is a new concept the government has come up with the Central Goods and Service Tax (Amendment) Act, 2019 and the Central Goods and Service Tax (Amendment) Rules, 2019. GST Suspension provision was inserted as sub-rule 2A wasin Rule 21A of the Central Goods and Services Tax (CGST) Rules.


With the introduction of the suspension of GST registration, taxpayers who have applied for the cancellation of GST registration will not be required to comply with GST return filing provisions during the suspension period. Thus, they would be freed up from the requirement of complying with the GST return filing provision during the suspension period, thereby reducing the compliance cost of the taxpayer. Further, any significant differences or oddity observed between the GSTR-3B and the GSTR-1 or 2B could lead to suspension of GST registration by the tax officer. This could also lead to the cancellation of  GSTIN if these differences remain unexplained.


Provision related to suspension

A new proviso was inserted to section 29 (1) which read as follows


‘Provided that during the pendency of the proceedings relating to the cancellation of registration filed by the registered person, the registration may be suspended for such period and in such manner as may be prescribed’


Also, Rule 21A(1) provides deeming provision of suspension that says if a registered person applies for cancellation of registration under Rule 20, the registration shall be deemed to be suspended from the date of submission of the application or the date from which the cancellation is sought, whichever is later, pending the completion of proceedings for cancellation of registration under rule 22. A registered person, whose registration has been suspended under rule 21A(1) of CGST Rules, shall not make any taxable supply during the period of suspension and shall not be required to furnish any return under section 39 of CGST Act.


➤ Suspension of GST registration by the proper officer

Rule 21A (2) provides the proviso for Suspension of GST registration by the proper officer which says that where the proper officer has reasons to believe that the registration of a person is liable to be cancelled u/s 29 or under rule 21, he may after affording the said person a reasonable opportunity of being heard suspend the registration of such person with effect from a date to be determined by him, pending the completion of the proceedings for cancellation of registration under rule 22.

The officer has to issue Form GST REG-31 to intimate the taxpayer of the discrepancies. He also has to mention that the GST registration may be cancelled, if the proper explanation is not given.


The officer can order for suspension under Rule 21A (2A), if he is not satisfied with the furnished information. The suspension can be lifted upon the receiving of a satisfactory reply from the taxpayer.


Things to do after Suspension of GST Registration


In case the taxpayer hasn’t applied for the cancellation of GST registration & who get notice of suspension of GST need to follow these things -


➤ Notice related to Discrepancies


After the issuance of the notice, the taxpayer would be required to furnish a reply to the jurisdictional tax officer within 30 days from the receipt of such notice, explaining the discrepancies or anomalies, if any, and shall furnish the details of compliances made or / and the reasons as to why their registration should not be cancelled.


➤ Notice of cancellation of registration

The respective person would be required to reply to the jurisdictional officer against the notice for cancellation of registration sent to them, in FORM GST REG-18 online through GST Portal within the time limit of 30 days from the receipt of notice or intimation.


➤ Due to non-filing of returns

In case the notice for suspension or notice for cancellation of registration is issued on ground of non-filing of returns the said person may file all the due returns and submit the response.


Likewise, in other scenarios as specified under FORM GST REG-31, they may meet the requirements and submit the reply.


Revocation of suspension of GST registration

Once the proceeding of cancellation of GST registration is being completed by the proper officer, the suspension of GST registration shall be revoked.

The revocation of suspension of GST registration shall be effective from the date on which the suspension had come into effect. It may be revoked by the proper officer, anytime during the pendency of the proceedings of the cancellation, if he deems fit.


Final Words

The recent amendments related to suspension of registration are designed to provide an immediate recourse to the Government against any anomaly or violation of GST laws so that there is no misuse of the online system. As GST is the only indirect tax applicable since 2017 ,it is necessary to know the intricacies of the concept, its suspension, its grounds, effect and the duration. It also talks about the process by which GST Registration can be suspended by the officer.


The rules governing Suspension also provides certain relief to the genuine taxpayer who has applied for cancellation of registration, the same is more inclined towards the department as it provides a ample range of powers to initiate suo-moto cancellation proceedings and to suspend the registration for the time being.