New GST Rule for Cancellation of Registration by GST Officer : Rule 21 CGST Rules

By | December 23, 2020
(Last Updated On: December 23, 2020)

New GST Rule for Cancellation of Registration

Notification No. 94 /2020 – Central Tax : CGST (Fourteenth Amendment) Rules, 2020.

In the said rules, in rule 21,-
(a) in clause (b), after the words “goods or services”, the words “or both” shall be inserted;
(b) after clause (d), the following clauses shall be inserted, namely:-
“(e) avails input tax credit in violation of the provisions of section 16 of the Act or the
rules made thereunder; or
(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; or
(g) violates the provision of rule 86B.”

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Commentary

Cancellation of Registration

Amendment in Rule 21

Some more eventualities have been added/amended, based on which registration can be cancelled like

(a) 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;

(b) Availed ITC wrongly;

(c) Declared Excess Outward Supply in GSTR 1 in compare to GSTR 3B for one or more tax periods;

(d) Set off of excess ITC from Electronic Credit Ledger as discussed in para 4.

Suspension of Registration

Amendment in Rule 21A

Now GST officer has been given the authority to compare your GSTR 3B with GSTR 1 and GSTR 2A. If he used this power and believes that there are significant differences or anomalies indicating something wrong, they can start the cancellation of registration. However, this power has also been monitored.  Before initiating the cancellation proceeding, he will have to issue a notice in form REG 21 and demanded clarification.

Category: GST

About CA Satbir Singh

Chartered Accountant having 12+ years of Experience in Taxation , Finance and GST related matters and can be reached at Email : Taxheal@gmail.com

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