Intimation Of Suspension Of Gst Registration

Recently, the Central Goods and Services Tax Rules, 2017 were amended. The amendment was notified vide notification no. 94/2020-Central Tax dated 22

nd December 2020 introducing the Central Goods and Services Tax (Fourteenth Amendment) Rules, 2020. Vide the said amendment rules, sub-rule (2A) is inserted into rule 21A of the Central Goods and Services Tax Rules, 2017. Accordingly, the newly inserted rule introduces the intimation of suspension of GST registration. The present article briefly explains the new provisions.

Background of the suspension of GST registration

Rule 21A of the Central Goods and Services Tax Rules, 2017 covers the suspension provisions under GST. The gist of the applicable provisions is explained hereunder-

As per sub-rule (1) to rule 21A, during the pendency of the cancellation proceedings, the registration of the taxable person will be deemed to be suspended from later of the following dates-
- The date of submission of the registration cancellation application under rule 20; or
- The date from which the cancellation is sought.
As per sub-rule (2), if the proper officer has an appropriate reason to believe that the GST registration of the person is liable to be cancelled as per section 29 or rule 21. The proper officer can suspend the registration of the person.

New suspension provisions inserted vide the amendment rules

With effect from 22

nd December 2020, new sub-rule (2A) is inserted to rule 21A. As per new sub-rule, the registration of the person will be suspended if significant irregularities/ differences are observed while comparing-

The return filed by the registered person under section 39 and the details of outward supplies filed in Form GSTR-1; or
The return filed by the registered person under section 39 and the details of inward supplies derived on the basis of the outward supplies’ details filed in Form GSTR-1 by the supplier.
Such other analysis

Intimation of the

GST registration Cancellation, on the basis of any of the above difference, will be communicated to the registered person in Form GST REG-31. Notably, the suspension will be effective from the date of the communication of the same in Form GST REG-31 to the taxable person.

Receipt of Form GST REG-31 and action thereon

The significant differences/ irregularities as mentioned above and the counter suspension of GST registration will be intimated to the respective registered person in Form GST REG-31. Communication of the intimation in Form GST REG-31 will be by both or any of the following way-

Electronically, on the common portal i.e. GST portal; or
Via registered e-mail address of the taxpayer.

On receipt of intimation in Form GST REG-31, the registered person should appropriately reply explaining the specific differences/ irregularities. The registered person should file the said reply within a period of thirty days. On being satisfied, the proper officer will order the revocation of the suspension of registration. Accordingly, the proper officer will drop the proceedings by passing an order in Form GST REG-20. However, if the proper officer is not satisfied, the suspended registration will be canceled.

The consequence of the suspension of GST registration

During the suspension period, the registered person will face the following consequence-

The person cannot make any taxable supply as per GST provisions.
The person requires not to file applicable GST returns under section 39 of the Central Goods and Services Tax Act, 2017.
Grant of refund under section 54 is not possible to the person during the period of suspension.

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Frequently Asked Questions

Common questions about Suspension of GST Registration Rules and Impact.

The recent amendment, notified vide notification no. 94/2020-Central Tax dated 22nd December 2020, introduced the Central Goods and Services Tax (Fourteenth Amendment) Rules, 2020. This amendment inserted sub-rule (2A) into rule 21A of the Central Goods and Services Tax Rules, 2017, introducing the intimation of suspension of GST registration.

Rule 21A of the Central Goods and Services Tax Rules, 2017 covers the suspension provisions under GST. Sub-rule (1) states that during the pendency of cancellation proceedings, the registration of the taxable person will be deemed suspended from a specified date. Sub-rule (2) allows the proper officer to suspend the registration if they have reason to believe the registration is liable for cancellation under section 29 or rule 21.

The registration will be suspended if significant irregularities or differences are observed while comparing (a) the return filed by the registered person under section 39 and the details of outward supplies filed in Form GSTR-1, or (b) the return filed under section 39 and the details of inward supplies derived from the outward supplies filed in Form GSTR-1 by the supplier, or (c) any other analysis.

The intimation of the suspension of GST registration, on the basis of any of the above differences, will be communicated to the registered person in Form GST REG-31. The suspension will be effective from the date of communication of Form GST REG-31 to the taxable person.

Form GST REG-31 will be communicated to the registered person either electronically on the common GST portal or via their registered email address.

On receiving Form GST REG-31, the registered person should reply within 30 days, explaining the specific differences or irregularities mentioned in the form. If the proper officer is satisfied with the reply, they will revoke the suspension by passing an order in Form GST REG-20. Otherwise, the suspended registration will be canceled.

During the suspension period, the registered person cannot make any taxable supply under GST provisions, is not required to file GST returns under section 39, and cannot claim refunds under section 54.

Yes, if the proper officer is satisfied with the registered person's reply to Form GST REG-31, they will order the revocation of the suspension by passing an order in Form GST REG-20.

If the proper officer is not satisfied with the registered person's reply to Form GST REG-31, the suspended registration will be canceled.

The new suspension provisions introduced by the amendment aim to identify and address significant irregularities or differences in the returns and outward/inward supply details filed by registered persons, ensuring proper compliance with GST regulations.