GST Registration can not be canceled for non-filing of GST Returns

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However, as per the recent judgment from the Madras High Court, GST Registration can not be canceled for non-filing of GST Returns. This article guides you all about the latest news of GST Registration can not be canceled for non-filing of GST Returns.

What is GST Cancelation?

GST Cancelation simply means that the taxpayer will no longer be registered under GST. As a result, the taxpayers will not be able to pay or collect GST. Furthermore, he or she will not be able to claim an input tax credit under GST. The taxpayer’s GSTIN (GST Number) will also become unvalid and will not be able to do GST Return Filing.

Taxpayers who have to mandatorily get GST Registration will not be able to operate their business in case of GST Cancelation. In this case, they need to apply for Revocation of cancellation of GST registration and activate their GSTIN again.

Why will the officer suspend or terminate GST registration?

The officer might suspend or terminate GST registration in the following cases:

  • The Registered Entity does not conduct any business operations.
  • Taxpayers issue invoices or bills without supplying goods or services.
  • Taxpayer does not pass the benefit of Input Tax Credit or Violates any other Anti-Profiteering  Provisions
  • Utilizing ITC from an electronic credit ledger to discharge more than 99 percent of a taxpayer’s tax liability for a violation of Rule 86B
  • A taxpayer doesn’t file GST returns, especially GSTR-1 or GSTR-3B, for more than two consecutive months. One quarter for those who have opted for the QRMP Scheme under GST Registration
  • Business utilizes the input tax credit in contravention of the norms or the restrictions of Section 16 of the Act.

Madras Court’s Verdict: GST Registration can not be canceled.

After carefully weighing the arguments made by both sides in the case Suguna Cutpiece Center Vs. The Appellate Deputy Commissioner (ST) (GST), the evidence presented, and the documents filed, the Hon’ble Court declared that:

  • The challenged orders, in my opinion, are susceptible to being overturned and have minimal protections since it will be useless to prevent people like the petitioners from restoring their registration and reintegrating into trade.
  • Even if these petitioners’ registrations are reinstated, there are sufficient provisions under the GST laws that can be used against them.
  • In addition, the government needs tax revenue to cover its expenses. By excluding these petitioners from the scope of the GST, an unanticipated privilege to not pay GST This may be unfairly granted to these petitioners should they decide to stop providing goods and/or services without registering.
  • Therefore, these petitioners have a right to rejoin the GST regime and get their GST registration activated again and resume their lawful trade and operations after the petitioners do GST return filing for the period prior to the cancellation of registration, along with tax default which has not been submitted prior to the revocation of GST registration, along with interest for such long overdue payment of tax, penalty, and charges set for belated filing of returns for the defaulted period under the provisions of the Act, within forty-five (45) days from the date of receiving a copy of this order.

Conclusion

Taxpayers might get a chance to revive canceled GST registration for non-filing of GST returns. However, in this scenario, the taxpayer will have to go through a complicated process of revocation of the canceled GST Registration. Additionally, the taxpayers will be liable to pay hefty penalties, fines, and interest on the taxes due. Therefore, it’s best to do GST Return Filing on time and in a correct manner.

Take a call from Expert

Revocation of cancellation of GST registration

Moreover, If you want any other guidance relating to GST Registration, please feel free to talk to our business advisors at 8881-069-069.

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