There have been consistent efforts by the Government and GST Council to implement some tough measures to curb tax-evasions and GST frauds.
This new Standard Operating Procedure (SOP) released by the CBIC is one such positive step towards a transparent and fair GST collection regime.
In this article, we will understand what the new notification is and what the implications of this on a normal taxpayer are.
What is the new notification?
Vide notification No. 94/2020- Central Tax, dated 22.12.2020, sub-rule (2A) has been inserted to rule 21A of the Central Goods and Services Tax Rules, 2017.
In simpler terms, there has been an amendment in the GST Law with an addition of a Sub-rule (2A) to Rule 21A of the CGST Rules, 2017.
A Standard Operating Procedure (SOP) was released by the CBIC dated 11th February 2020 for the implementation of the provision of suspension of registrations under sub-rule (2A) of rule 21A of CGST Rules, 2017
Understanding the SOP
- CBIC has issued a Standard Operating Process (SOP) for suspension of registration of a taxpayer if it is observed that he violates the GST Act.
- The SOP has been issued for the suspension of GST registration of taxpayers on account of discrepancies that indicate a breach of GST laws
- The set of new instructions issued to the GST officers is to confirm that there is uniformity in the way registrations are suspended.
- Suspension of a taxpayer’s registration will be revoked if the taxpayer answers the queries of the officials, satisfactorily.
- The SOP also makes it clear that the GST officers must collect any tax dues before revocation or cancellation of the GST Registration if they find the taxpayer in violation of the GST Laws.
What does Suspension of GST Registration mean?
Before the insertion of Sub-rule 2A in the CGST Rules, there was no concept called ‘Suspension of GST Registration’.
With the recent addition of this rule, a taxpayer who has applied for the cancellation of GST Registration is NOT required to comply with GST return filing provisions during the suspension period.
Whose GST Registrations are Liable to be suspended?
GST Registrations of those taxpayers are liable to be suspended if:
- An authorized GST officer finds any discrepancies in comparing the details of outward supplies furnished under Form GSTR-1 and Form GSTR 3B.
- Any discrepancies on comparing the details inward supplies reflecting in the Form GSTR-2B with the Form GSTR-3B.
- Suspension of registration will be processed in cases where the continuation of the operation of the registration creates a threat to revenue leakage.
NOTE: GST Registrations can be suspended ONLY by the authorized GST Officer after thorough scrutiny and after he gets a satisfactory reason to do so.
The concerned taxpayer should be given a fair opportunity by the GST officer, to express his side.
How will I as a Taxpayer know that my GST Registration is suspended?
- GST Officer has to issue form GST REG-31 for intimating discrepancies if any, to the taxpayer.
- He will also mention that if a proper explanation is not provided on these discrepancies, the registration may get cancelled.
- According to Rule 21, sub-rule 2A of the CGST Rules, the GST Officer can suspend the registration from the date of this communication to the taxpayer.
What are the Effects of GST Registration Suspension?
If the GST Registration stands suspended for a taxpayer, then:
- A taxpayer cannot issue a tax invoice or make any GST taxable supply.
- He is no longer required to furnish his return details under Section 39.
- He will no longer be eligible to avail of any refund under Section 54.
What should I do if my GST Registration stands suspended?
- Registration of concerned taxpayer shall stand suspended and system-generated intimation for suspension and notice for cancellation of registration in form GST REG-31, containing the reasons of suspension, shall be sent to such taxpayers on their registered e-mail address.
- After the concerned taxpayer gets the intimation from the authorized tax officer, taxpayers whose registrations are suspended would be required to furnish a reply to the jurisdictional tax officer within 30 days from the receipt of such notice/intimation, explaining the discrepancies/anomalies and the reasons as to why their registration should not be cancelled.
How to revoke GST Registration Suspension?
- The GST Registration Suspension can be revoked once the GST Registration Cancellation proceedings are completed.
- In case the tax officer is prima-facie satisfied with the reply of the concerned taxpayer, he may revoke the suspension by passing the order in the FORM GST REG-20.
- Post revocation, if need be, the concerned tax officer can continue with document verification and recovery of the short payment of tax if required.
GSTHero at your Rescue!
To err is to human. This can’t be more true when it comes to you manually input the return details on the GST Portal or your ERP Software.
To avoid such errors and save on penalties you can use the GSTHero in the following ways:
- Providing accurate reconciliation reports between GSTR-3B and 1, GSTR-3B and 2B, e-invoicing within few seconds, with a click of a button.
- You can claim 100 % Input Tax Credit using GSTHero’s Advanced Reconciliation Tool.
- GSTHero be integrated with ERPs like Tally, SAP, Marg, Oracle, Microsoft Dynamics & other customs ERPs?
- Get your data validated with 50 + validation checks.
Stay tuned with GSTHero for more such informative content.
Until the next time….
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