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What is Suspension of GST Registration

Narendra Kumar

| Updated: Feb 13, 2019 | Category: GST, GST Registration

Suspension of GST Registration

With intent to ease out the process and norms of the goods and service tax paid by the taxpayer, the Government of India has come up with the latest amendment to introduce the concept of the suspension of GST registration. This concept was introduced under the Central Goods and Service Tax (Amendment) Act, 2018 and the central Goods and Service Tax (Amendment) Rules, 2018. In this GST suspension scheme, taxpayers do not have to adhere with the GST return filing during the time period of suspension, if they have filed a cancellation of GST registration. It will ultimately lessen the cost of compliance and save lots of time for the taxpayer.

Introduction to Provision of Suspension of GST Registration under the GST Act

There is a provision for the cancellation of registration which is specified under section 29 of the central Goods and Service Tax Act, 2017[1]. The central Goods and Service Tax (Amendment) Act, 2018 which has been effective from 1st of February, 2019 states that:

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

In simple words, the GST registration of the registered person may be held suspended for a certain period of time before the final cancellation takes place.

What do you understand by the Suspension of GST Registration?

In accordance with the new amendments in the GST registration, the government may suspend your GST registration before the cancellation. There are two amendments, first in the subsection 1 of section 29; section 29 (1) and the second is in the subsection 2 of section 29; section 29 (2) of GST Act 2017.

Before the insertion of the amendment After the insertion of the amendment:
Before the insertion of the amendment (“suspension of GST registration”), individual or business entities having the GST registration had to comply with the mandatory compliances of GST till the cancellation of GST registration. After the insertion of the amendment (“suspension of GST registration”), now individual or business entities having the GST registration has to adhere with compliances of GST registration till the suspension of GST registration.

Later in this blog, we will also talk about the penalties in case you do not comply with the GST registration and how we can help you to get the GST registration within a period of three to six working days.

Cases of the suspension of GST Registration

There are basically two cases when the suspension of GST registration is sought-

  1. For a taxable person who is not registered under section 25 (3) is not liable to be registered under section 22 or section 24, provided the request of suspension of GST registration is pending as per after the conduct of the proper officer
  2. If the proper officer is of the view that the registration of the person is liable to be canceled, then he may suspend the registration during the period when the proceedings of the cancellation would be taking place. It can only be done after the reasonable opportunity of being heard is given to the person.

Features of the Central Goods and Service Tax (Amendment) Rules, 2019

After the insertion of the above proviso, the Central Goods and Service Tax (Amendment) Rules, 2019 has introduced the new rule 21A to deal with the same. Let’s take a look at the main features of rule 21A-

Rule 21A is applied to the registered person, who has filed for the cancellation of GST registration.

When you have applied for the cancellation of GST registration and your request is pending, your registration will be considered suspended in accordance with either of the dates mentioned below-

  • Date of submission of the GST cancellation application
  • Date on which the cancellation is sought

It may be possible that the GST officer will keep your GST registration suspended during the proceedings of the cancellation of GST registration. The proper officer suspends your registration only after hearing the registered person.

What are the effects on the Registered Person after the Suspension of GST Registration?

The effects on the registered person after the suspension of GST Registration are as follows:

  • They won’t be able to make the any taxable supply
  • They won’t have to furnish any returns

When the proceedings by the officer are completed, the suspension of the registration will be revoked. This revocation will be effective from the date of suspension had been active.

Example of Suspension of GST Registration

Let’s try to have a better understanding of GST suspension with the help of an example-

For example, Mr.Arun has filed the application of cancellation of registration on 1st March 2019. And the effective date of cancellation of registration is chosen as 20th November 2018 by Mr. Arun. So the effective date of suspension will be the following-

  • The date of submission of the application is 1st of March, 2019
  • The date on which the cancellation is sought is 20th November 2018

Therefore the effective date of suspension will be the 1st of March, 2018.

Now if the cancellation proceedings of the GST registration are completed on 25th April 2019, then suspension period will be from 1st of March 2019 till 25th April 2019. And the registered person will not be allowed to make any taxable supply and file returns during the period of the suspension.

GST was brought into effect to accomplish the mission of one nation one tax. In case you fail to get the GST registration when you are liable to do so, then you have to bear the penalties of for not registering under the GST. Let’s see how you will be penalized for not having a GST certificate.

Penalties for not getting GST Registration Certificate

The government of India has laid out strict laws under the GST Act for the non-compliance of the GST rules and regulations. If you fail to adhere compliances of the GST registration, you have to bear the following consequences-

  • In case of the short payment or non-payment of taxes- the penalty would be 10% of the Unpaid amount or Rs. 10,000.
  • For the case of tax evasion- the penalty would be 100% of the tax amount.

But when you are eligible for the GST registration, further we will see the eligibility criteria of GST registration.

Eligibility criteria of GST Registration

Following are the eligible individual and business entities that have to undergo the GST registration:

  • Already existing taxpayers that were registered under any of the VAT, CST, Excise/Service tax regimes
  • New taxpayers include those, who have an annual turnover of more than Rs. 40 lakhs (20 lakhs in northeast states).
  • Casual taxable person and Non-resident taxable person
  • Online Aggregator- Market place seller and supplier
  • Company or a person who supplies online data or information from outside India to a person in India
  • The agent or Taxable supplier
  • Input service distributor

Get your GST Registration Certificate within three to six Working days

For the first in history, our professionals at Enterslice can get you the certificate of GST registration within three to six days. Enterslice is one of the top-rated GST registration providers in the country. Our experts will help you with the registration, guide you with the applicability and meet all the compliances of GST. Below is the glimpse of the technique we follow to expedite the process-

  • You just need to purchase a plan for GST registration from us
  • Our CA will assign the order for you
  • You need to upload the documents through our mobile app or web app
  • Then our expert will do the in-depth scrutiny of documents and submit it further
  • Generation of ARN, which will be shared with you
  • Finally, the GSTIN issued- GST department will issue the GST certificate within 2-3 working days after the thorough inspection.

Conclusion:

With this new amendment of Suspension of GST registration, the registration of GST will be suspended for a period between the dates of cancellation sought until the cancellation of the GST registration. This new amendment has been effective from 1 February 2019. This will save the individuals and business from complying with the mandatory compliances of the GST, which ultimately would save time and money. For any detailed information regarding the GST or GST registration please contact Enterslice.

Read our article: How to Change GST Registration Details of a Business?

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Narendra Kumar

Experienced Finance and Legal Professional with 12+ Years of Experience in Legal, Finance, Fintech, Blockchain, and Revenue Management.

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