The term “Suo Moto” is a Latin legal term which literally means “on its own motion”. It implies that an action was taken by a group or persons on their own. Hence, when a government entity or a court takes up a matter suo moto, it is taking up the matter “on its own motion” meaning of its own accord or on its own initiative.
Suo Moto cancellation of GST Registration:
If a tax payer does not comply with the provisions laid down under Goods and Service Tax, the proper officer is empowered to initiate cancellation of GST registration of such defaulting tax payer.This type of cancellation of registration initiated by proper officer is called suo moto cancellation of registration.
GST officer to cancel the registration of a person from such date, including any retrospective date, as he may deem fit, where-
Registered person has contravened such provisions of the Act or the rules made thereunder as may be prescribed; or
A person paying tax under section 10 (i.e Composition levy) has not furnished returns for 3 consecutive tax periods; or
Any registered person, other than composition registered dealer who has not furnished returns for a continuous period of 6 months; or
Any person who has taken voluntary registration under sub-section (3) of section 25 has not commenced business within 6 months from the date of registration (i.e filing Nil GST Returns); or
Registration has been obtained by means of fraud, wilful misstatement or suppression of facts:
Communication Suo Moto Cancellation of GST Registration:
Proper officer can’t cancel GST registration without providing taxpayer an opportunity of being heard.
Further,before passing order of cancellation of GST Registration, proper officer is required to issue a notice (provide an opportunity of being heard) to the taxpayer.
Communication of notice can be made through following ways: By sending communication on his registered email address; or By making available such notice on common GST portal.
Application for Revocation of Cancellation of GST Registration:
Section 30(1) provides an opportunity to taxpayer to apply for revocation of cancellation of GST registration within 30 days from date of service of cancellation order.
As per Rule 23 of CGST Rules, if proper officer cancels GST registration of any registered person on his own motion then such registered person may apply for revocation of such cancellation in form GST REG-21.
Steps to be taken after receiving communication for cancellation of GST registration
Now the dealer is under obligation to submit his reply to show cause notice in Form REG-18 within specified time period, the failure of which GST officer shall cancel the GST Registration and issue GST Cancellation Order in FORM GST REG-19
Cancellation of registration under this section shall not affect the liability of the person to pay tax and other dues under this Act or to discharge any obligation under this Act for any period prior to the date of cancellation
If you have received Zero value FORM GST REG-19 (Cancellation Order) then it does not means that all frauds/ Tax Evasion done prior to date of cancellation have been washed away. If at a later stage, GST Department finds any Tax evasion, then they can recover the same even after GST Cancellation.
GST Revocation request is required to be filed in FORM REG – 21.
if GST Officer is satisfied with the application, for reasons to be recorded in writing, that there are sufficient grounds for revocation of cancellation of registration, he shall revoke the cancellation of registration by an order in FORM GST REG-22 within a period of thirty days from the date of the receipt of the application and communicate the same to the applicant
GST Revocation is applicable only in case of Suo Motto GST Cancellation and not in case of GST Cancellation done on the request of the dealer.
Other than provisions stated for registration and filling of taxes the act also states for provisions for taxpayers who are no more liable to pay GST or want to willingly opt for cancellation of their GST registration. Detailed provisions of the act have to be complied with.Legal advisory can be taken by the professionals at the Legal Window to avoid any such non compliance.
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LegalWindow.in is a professional technology driven platform of multidisciplined experts like CA/CS/Lawyers spanning with an aim to provide concrete solution to individuals, start-ups and other business organisation by maximising their growth at an affordable cost.