If you don't file, can you cancel your GST registration? How to Get It Back?

If you don't file, can you cancel your GST registration? How to Get It Back?

One of India's most important indirect taxes is the Goods and Services Tax (GST). It applies to businesses of all sizes. A lot of business owners want to know if they may terminate their GST registration if they don't file their returns. Yes, the answer is yes

The CGST Act of 2017 specifies that if you don't file reports more than once, you can lose your GST registration. If you cancel, it can be very hard to conduct your business lawfully, pay your taxes, and stay honest. This site speaks about why you could lose your GST registration, what happens if you do, and how to get it back by either canceling it or applying for a new one.

In some cases, Section 29(2) of the CGST Act allows the right official the power to end GST registration. One of the most common reasons is not filing GST returns.

Important Reasons for Cancellation: Not filing returns:

• If a regular taxpayer hasn't filed their taxes for six months in a row,

• If a composition dealer hasn't filed taxes for three quarters in a row,

• Incorrect registration information: If you got GST by using fraudulent documents or supplying inaccurate information.

• Business inactivity means that the taxpayer hasn't been doing business or running their business for a long time.

• Tax evasion or taking advantage of GST provisions constitutes fraud if the taxpayer is proved guilty.

For instance, a small business signed up for GST but didn't file GSTR-3B for six months. If compliance isn't restored, the GST officer may send a notice under Rule 22 of the CGST Rules, 2017 and cancel the transaction.

Reference: CBIC - Central Board of Indirect Taxes and Customs

What happens if you cancel your GST registration?

Not registering your GST registration might have many economic and legal consequences:

• Not Allowed to Collect GST by Law
  You can't add GST to sales invoices if your registration is canceled.
• Loss of Input Tax Credit (ITC)
  Buyers and suppliers can't claim ITC on your bills, which makes your firm less competitive
• Fines and Late Fees
  You could have to pay fines under Section 122 of the CGST Act, as well as late fees and interest on returns that are still due.
• Reputational Damage
  Cancellation hurts your reputation with vendors, consumers, and banks.
  

How to Get Your Cancelled GST Registration Back

If your GST registration is canceled because you didn't file, you have two choices based on the timeline:

1. Request Revocation of Cancellation (Within 30 Days)

• You have 30 days from the date you get the cancellation order to file FORM GST REG-21 through the GST portal.

• Before you can do this, you need to file all of your pending returns (GSTR-3B, GSTR-1, etc.) together with any penalties, late fees, and interest that apply.

• Give good reasons for not filing, including money problems or technological problems.

• The officer will carefully look over the request. If everything is okay, registration is restored by FORM GST REG-22.

Note: The Additional/Joint Commissioner can extend the 30-day period by up to 90 days in certain situations (as decided by the GST Council).

2. New GST Registration (If the Revocation Period Has Ended)

• If revocation is not filed within the allowed time, the taxpayer must apply for fresh GST registration.
• This means sending in new documents, verifying them in person (if necessary), and getting a new GSTIN.
• You still have to pay any prior debts (taxes and penalties) with the old, canceled GSTIN.

Practical Example of The cancellation Process

A trader in Odisha didn't file their GST filings for a period of seven months.

What happened: The GST officer gave an order to cancel.

Steps Taken:

• Trader sent in all of their late returns.

• Filled out FORM GST REG-21 with justifications.

• The cancellation was undone, and the GSTIN was restored.

This case shows that following the rules on time can keep firms from having problems with their operations.

How to Save Your GST Registration from Being Canceled

Following the rules is the best way to avoid getting canceled or fined.

1. Every month, every three months, or every year, you should file your GST returns.
2. Use automated reminders or tools to help you remember when GSTR-1, GSTR-3B, and GSTR-9 are due.
3. Tax experts and accountants are examples of professionals who can assist you file your taxes.
4. To avoid difficulties, make sure that the GST site has the most up-to-date information about your business, such as its address, phone number, and bank account number.
5. Respond quickly to notices like Form GST REG-17 (Show Cause Notice).

Questions That People Ask a Lot

Q1. How many months lacking filing will cause cancellation?

• For ordinary taxpayers, six months in a row.
• Three tax periods in a row for composition taxpayers.

Q2. Can you change your mind about canceling GST after 30 days?

• Yes, but only if the Additional/Joint Commissioner extends it for up to 90 days (for each case).

Q3. What happens if I miss the deadline to revoke?

• You need to register for GST again.
  

Q4: Do I still have to pay taxes that are due after I cancel?

• Yes. Cancellation does not eliminate tax obligations.

If you don't file your returns, your GST registration can be canceled. Section 29(2) of the CGST Act makes it clear that not following the rules for six months is enough to cancel.

The good news is that the cancellation won't last forever. Businesses can get their GSTIN back by filing pending returns, paying their dues, and applying for revocation within 30 days (which can be extended). But if you miss this window, you'll have to start over with a new registration, which could be more expensive and time-consuming.

In short, the best way to protect your business's reputation, avoid fines, and keep your GST registration current is to file your GST on time.

References

• CBIC - Goods and Services Tax Law
  

• CGST Act, 2017 – Section 29 & Rule 22

• GST Council Notifications and Circulars