Rule 14(3) of draft GST Registration Rules provides that where a person who has submitted an application for cancellation of his registration is no longer liable to be registered or his registration is liable to be cancelled, the proper officer shall issue an order in FORM GST REG-18, within 30 days from the date of application submitted under sub-rule (1) of rule 12 or, as the case may be, the date of reply to the show cause issued under sub-rule (1), cancel the registration, with effect from a date to be determined by him and notify the taxable person, directing to pay arrears of any tax, interest or penalty including the amount liable to be paid under sub-section(5) of Section 29.

Issue(s)

• In all these cases the proper officer is entitled to cancel the registration with effect from a date to be determined by him. This provisions gives freedom to the proper officer even where application for cancellation is moved by registered taxable person himself. In such cases, effective date should be the date from which the registered taxable person seeks cancellation. There may be a capping of period as prescribed in rule 12 to prevent late applications. But the complete power in this regard should not be vested in the hands of proper officer.

• Sub-rule (3) of Rule 14 makes a reference to an application “submitted under sub-rule (1) of rule 12”. Rule 12 deals with application for cancellation of registration but has no sub-rule.

Suggestions

• It is suggested that Rule 14(3) be redrafted as follows:

Where a person who has submitted an application for cancellation of his registration is no longer liable to be registered or his registration is liable to be cancelled, the proper officer shall issue an order in FORM GST REG-18, within thirty days from the date of application submitted under rule 12 or, as the case may be, the date of reply to the show cause issued under sub-rule (1), cancel the registration, with effect from the date of occurrence of event as specified in rule 12 where application is submitted in accordance with rule 12 and with effect from a date to be determined by him in any other cases and notify the taxable person, directing to pay arrears of any tax, interest or penalty including the amount liable to be paid under sub-section(5) of Section 29.

• Further, drafting anomaly of Rule 14(3) with regard to Rule 12(1) be rectified.

Source ICAI Suggestions on GST Rules Submitted to Govt of India