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Cancellation Of GST Registration For Non GST filers

Cancellation Of GST Registration For Non GST filers

Highlights

•    During lower-than-expected GST collection in the last few months of the present fiscal, the CBIC had directed the zonal offices to go tough on non-filers.

•    The development had raised because of the serious concern over non-compliance through GST registrants.

The Central Board of Indirect Taxes and Customs (CBIC) are planning to take strict actions against the non-filers which might also lead towards the cancellation of GST registration by officials. 

The filing of returns assists the tax authorities in order to estimate the tax liability as well as catch on how much tax was paid. The tax officials also figure out the sum of tax that must have been collected and the sum of tax that was actually collected by the tax officials, through the returns filed by taxpayers. Thus when a taxpayer does not file returns, it becomes problematic for the tax authorities towards estimating the tax collection.

Also, 20% of the assessees had not filed GST returns which had affected the GST collection.

A meeting was held by the Central Board of Indirect Taxes and Customs (CBIC) with the Principal Chief Commissioner and Commissioner of GST and Customs on 13th November,  PK Dash, the Chairman, CBIC, stated his discontentment relating to the progress of cancellation of GST registration of non-filers who has not filed GSTR 3B (showing tax payments) returns for 6 or more than 6 return periods as well as are legally responsible to action under GST law.

Among the lower-than-expected collection of GST in the last few months of the present fiscal, the Central Board of Indirect Taxes and Customs (CBIC) had directed the zonal offices to go strict on non-filers.

Therefore, the Mumbai office of the Principal Chief Commissioner of GST and Central Excise had issued directives towards the field officers for confirming stern compliance.

Conditions for cancellation of GST registration

As per Section 29 of the Central Goods and Services Tax (CGST) Act, it prescribed conditions relating to the cancellation of GST registration and fulfillment of any of these would invite action. These contain violation of the provisions of the Act, a composition scheme assessee who did not file returns for 3 consecutive tax periods, any non-composition assessee who did not furnish the returns for a continuous period of 6 months, not beginning business within 6 month starting from the voluntary registration, as well as registration acquired by way of deception, willful misstatement or through suppression of facts. The Act evidently states that registration would not be canceled without providing the individual an opportunity of being heard.

As per the GST Law, it is compulsory for a registered person to file returns. A normal supplier is required to file monthly returns as well as supplier under composition scheme which is required to be filed in quarterly returns. 

Also, an Input Service Distributor is required to file monthly returns to report details of credit dispersed in the particular month. An individual is required to deduct tax (TDS or Tax Deducted at Source) and individuals required to collect tax (TCS or Tax Collected at Source) would also need to file monthly returns showing the sum deducted/collected as well as any other stated details. A non-resident taxable individual would also be required to file returns for the period of activity undertaken.

However, the law is very clear relating to the cancellation of GST registration that would not affect the liability of the individual towards paying the tax as well as any other dues. All the registered individual whose registration has been cancelled would pay a sum, by means of debit in the electronic credit ledger or through an electronic cash ledger, equivalent towards the credit of input tax regarding inputs held in stock as well as inputs contained in semi-finished or finished products held in stock or capital goods or plant as well as machinery on the day immediately preceding the date of the cancellation or the output tax payable on such products, whichever is higher.

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Author:

eStartIndia Team



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