gst registration cancellation

GST Cancellation: Latest SOP on Anomalies in GSTR-3B

CA Hema Pandey

Updated on February 2nd, 2024

GST Cancellation update: On 22/12/2020, vide notification no. 94/2020, sub-rule (2A) has been inserted under Rule 21A which provides for immediate suspension of GST registration of a person in following scenarios:
  • Details of GSTR-1 differs from Details of GSTR-3B
  • Details of GSTR-2B differs from Details of GSTR-3B.

This means if GST officer finds any significant anomalies under GSTR-3B as against GSTR-1 or GSTR-2A, he has right to suspend the registration of such person immediately without giving any opportunity of being heard.

In this article, we are going to understand, as to what GST cancellation Standard Operating procedure (SOP) for implementation of this notification is issued for GST officer.

GST Cancellation: STANDARD OPERATING PROCEDURE (SOP)

GST registration cancellation
This SOP was issued via CBIC circular 145/01/2021-GST on 11/02/2021.

According to this circular, the officer can suspend the registration with immediate effect of the person for 30 days and intimate in FORM GST REG-31, electronically, on common portal, or via e-mail on the address provided by such person at the time of registration.

Form GST REG-31 is yet to be developed, and therefore till that time, a system generated intimation under FORM GST REG-17 on dashboard on common portal is generated. This notice can be viewed under “View Notice and Order” tab after logging in.

The officer shall highlight the difference and the reason under such intimation and ask him to give his explanation within 30 days of such intimation.

The registered person shall give his response in Form GST REG-18, within 30 days with all the details, and provide the reason as to why, his registration should not be cancelled.

If the registration is suspended on the ground of non-filing of returns, then the registered person is required to first file all the due returns and then submit the response.

In case of cancellation of registration in any other situation under FORM GST REG-31, such registered person shall submit the reply accordingly.

List of all such taxpayers, who are issued FORM GST REG-31, shall be sent to the Nodal officer of CBIC/ States.

The notice shall be viewed by the proper officer on their dashboard for suitable action.

Once the 30 days period is over, automatically the task will get created for proper officer on his dashboard as “Suo motu cancellation proceedings”.

After getting reply from the registered person, or in any other case, the officer may pass the order for: -

  • Dropping the proceedings in Form GST REG-20 of suspension/cancellation.
  • Cancellation of Registration in Form GST REG-19.

Till the time, the mechanism is not ready, the proper officer may direct the taxpayer to submit his reply in Form GST REG-18 if he considers it appropriate to drop the proceedings.

If the proper officer is satisfied with the reply of such person, he may revoke the can suspension by passing order under FORM GST REG-20.

Once the 30 days period is over, automatically the task will get created for proper officer on his dashboard as “Suo motu cancellation proceedings”.

The above SOP explains us that the proper officer is authorised to cancel the registration of any tax payer with immediate effect. Therefore, the duty of the taxpayer increases.

He will have to keep himself updated by frequently viewing the notices and orders passed, if any.

Reason being, the frequency of GSTR-1/2A/3B is monthly (and in some case it is quarterly). And deviation may take place in any period.

GST Cancellation: Significant Anomalies in GST Returns

GST Cancellation
Anomalies stands for difference. This notification was issued regarding the immediate suspension of registration in case any difference found by the GST officer in following situations:
  • GSTR-1 doesn’t match with GSTR-3B
  • GSTR-2A doesn’t match with GSTR- 3B
 Apart from this, if the taxpayer fails to file GST Return, his registration may be suspended

GST Return

Meaning

Difference in.

GSTR-1

Return containing invoice-wise details of outward supply made by registered person. (Like Sales, Service Provided etc.)

  • Turnover
  • Net Taxable outward supply
  • Output Tax Liability

GSTR-2A

Details of inward supply auto-populated on MONTHLY basis which is uploaded by suppliers of a registered person. (Like purchases, Service received etc.)

  • Details uploaded by the supplier from whom we took inward supply.
  •  Heads of GST (CGST/SGST/IGST/UTGST)

GSTR-2B

Details of Inward supply auto-drafted constantly under Log-in portal of recipient.

  • Details uploaded by the supplier from whom we took inward supply.
  • Heads of GST (CGST/SGST/IGST/UTGST)

GSTR-3B

  • Periodical return containing all the details of outward supply, inward supply, credit note, debit note, TDS, interest, Penalty.
  • ITC available in Electronic credit ledger
  • Cash payable through electronic Cash ledger
  • Turnover
  • Net Taxable outward supply
  • Output Tax Liability
  • Details uploaded by the supplier from whom we took inward supply.
  • Heads of GST (CGST/SGST/IGST/UTGST)

    • STEPS TO BE TAKEN BY THE TAX PAYER TO AVOID SUSPENSION:

    GST suspension
    As we know, for a business man registered under GST, it is very important for his registration to remain intact.

    Because as soon as the registration is suspended, he will not be able to generate e-invoice, if applicable.

    He will not be able to generate e-way bill and removal of goods will not be possible. Customers will stop buying goods if we lack to generate e-way bill.

    Due to various reasons, it is very important to keep a proper track on the registration.

    A registered person should check periodically as the whether or not any notice is received by him on his log in portal.

    He should keep on checking the following:

    GSTR-1

    • Before uploading GSTR-1, whether all his invoices are properly considered.
    • GSTIN mentioned in invoices belong to those who have actually received the goods or services or both.
    • All the details of net taxable value and output tax liability is mentioned correctly.
    • Inter-state and intra-state are bifurcated accurately.
    • Goods under Reverse Charge Mechanism is properly taken care of.

    GSTR-2A

    • Taxpayer should tally GSTR-2A with books and check that there should not be any difference in Books of Accounts and GSTR-2A.
    • Taxpayer can avail Input Tax Credit on Input tax paid only after the supplier has uploaded the invoice in his GSTR-1 and is auto-populated in GSTR-2A of such taxpayer.
    • If the recipient finds that the supplier has not uploaded his invoice or has not filed his return, he should ask him to comply with this, so that the ITC is available to him.

    GSTR-3B

    • Details of outward supply matches with those that are mentioned in GSTR-1, i.e., Turnover and GST.
    • Details of Inward supply matches with that under GSTR-2A and 2B, but predominantly with 2A.
    • ITC availed is up to 105% of ITC under GSTR-2A, as mandated in Rule 36(4).
    • Net tax liability is matching with that of the actual liability calculated based on GSTR-1 and 2B.

    Therefore, the taxpayer needs to check periodically, after every GST Return Filing, if any notice is received.

    Normally, officer can take any action only after giving proper notice.

    However, in this case, proper officer is authorised to suspend the GST Registration without giving any opportunity of being heard. The registered person will himself have to keep tracking it.

    If any such intimation is received, he should immediately submit his reply within 30 days.

    This may save him from further proceedings.

    I hope this article was helpful

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    CA Hema Pandey

    About the author

    Hema is a Chartered Accountant who is having about Eight years of experience in taxation and accounting. She is in practicing as a Chartered Accountant since 2020. She is a writer by passion and thus shares her experience and knowledge through her articles at various platform.

    Predominantly her area of interest is GST. Since GST is a very new concept for India, every practitioner is looking for clarity in this area. She likes to share her experience with everyone and therefore tries to put them in form of articles.
    Apart from this, she is also well-worsed in Financial market.

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