Section 29 of the Central Goods And Services Tax Act, 2017 and Rule 21 of the Central Goods and Services Tax Rules, 2017 provide for suspension or cancellation of registration.
Situations giving rise to suspension/cancellation:
| (a) | does not conduct any business from the declared place of business; | |
| (b) | issues invoice or bill without supply of goods or services [or both] in violation of the provisions of the Act, or the rules made thereunder; | |
| (c) | violates the provisions of section 171 of the Act or the rules made thereunder, i.e., contravenes the Anti-profiteering rules & provisions | |
| (d) | violates the provision of rule 10A,i.e., does not furnish the bank account details of the taxpayer on the GST common portal | |
| (e) | avails input tax credit in violation of the provisions of section 16 of the Act or the rules made thereunder, i.e., claims more input tax credit than what is reflected in GSTR-2A & shown by the supplier in his GST returns | |
| (f) | furnishes the details of outward supplies in FORM GSTR-1 under section 37 for one or more tax periods which is in excess of the outward supplies declared by him in his valid return under section 39 for the said tax periods, i.e., there is variance in output tax liability declared in GSTR-1 & paid in GSTR-3B by the taxpayer | |
| (g) | violates the provision of rule 86B,i.e., does not make payment of atleast 1% tax liability in cash while filing the GST returns subject to certain rules, exceptions & conditions |
No oppurtunity of being heard will be accorded to the taxpayer prior to the suspension on any of the above mentioned grounds. The taxpayer shall not be able to make any taxable supplies or generate e-way bills during this period of suspension. Oppurtunity of being heard will be accorded only after the suspension has been enforced & will continue to remain in force till the proper officer is satisfied with the contentions so representated by the taxpayer.
Extremely harsh provisions have been introduced which may lead to serious issues at the end of genuine taxpayers on account of bona fide errors.
Taxpayers have to take extreme care in ensuring compliance not only of himself but also of its vendors to avoid the rigours of the given provisions.
No provision of revision of any returns under GST law & therefore utmost care to be taken to ensure correct & timely filing of returns.
The need of the hour is to have appropriate consultations with an expert to understand various GST issues impacting an entity & take due care while filing all returns to ensure no avoidable error is committed leading to unnecessary notices & demands/suspension.