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Suspension of GST Registration

September 27, 2021

Suspension Of Gst Registration


Suspension of  GST registration

Goods and Services Tax Network (GSTN) sends SMS to taxpayers to inform them regarding the irregularities between the GSTR filed by the taxpayers. As per the recent notification, a new sub-rules inserted that, any discrepancies noticed between the GSTR 3B and GSTR 1/2B may result in the suspension of GST registration. Unless these discrepancies are properly addressed, subsequently the GSTIN may get cancelled.


Moreover, in case the taxpayer has applied for cancellation, the tax officer could suspend his registration until the cancellation procedures are finished as per the new Rule 21A.


What does it mean by suspension of GST registration?

The GST regime has brought in a new idea of suspension of GST registration. Rule 21A has been inserted into the CGST Rules 2019. As a result of this rule, a taxpayer who has applied for the cancellation of GST registration, does not need to be compliant with the provisions of GST return filing in the course of the suspension period.


Whose GST registration or GSTIN could get suspended?

In case a tax officer believes that registration is required to be cancelled, the GSTIN of a registered person could be cancelled by him. The tax officer has to give the registered taxpayer a reasonable chance for hearing and then follow the right procedures for cancellation as said under Rule 22 of the CGST Rules 2017.

During the time in which cancellation procedures are being done, the officer could suspend the registration.


Suspension of GSTIN registration due to differences between GST returns

Rule 21A (2A) : A new sub rule 2A has been inserted through notification 94/2020 which says that in case a tax officer finds any irregularities :

  1. On comparing details of outward supplies provided under Form GSTR 1 and Form GSTR 3B.
  2. On comparing details of inward supplies shown in the GSTR 2B Form with GSTR     3B Form.
  3. Other analysis.


The tax officer could issue GST REG- 31 Form for intimating such irregularities to the taxpayer .He would also intimate that unless a proper clarification is given on the irregularities the registration may also get cancelled.


He would also suspend the registration in accordance with Rule 21A (2A) with effect from the date of this communication to the taxpayer. Besides, the tax officer has the right to lift the suspension in case of a satisfactory reply.

This provision regarding the suspension of GST registration till cancellation was made happy for the taxpayers because it reduced the compliance burden of the taxpayer till the completion of cancellation procedures.


What is the time/period of suspension of GST registration?

The suspension of GST registration comes into effect from the date the registered person has applied for the cancellation of GST registration. The valid date of suspension is the later of the following:

  • Submission date of registration cancellation application.
  • Date since the cancellation is asked.


What are the effects of the suspension of GST registration?

A taxpayer whose GST registration has been suspended: 

  • He cannot make any taxable supply after suspension.
  • He does not need to file any returns as required as per section 39 of the Central Goods and Service Tax Act, 2017. Reduction in compliance burden is the main benefit got by the taxpayer till a suspension of GST registration.


How to revoke the suspended GST registration?

The suspension of GST registration could be revoked after the finishing of GST registration cancellation procedures. revocation would be effective since the suspension date has come into effect.


Procedures for the suspension of GST registration under rule 21A (2A)

The Central Board of Indirect Taxes and Customs has come up with SOP (Standard Operating Procedure) for implementing the suspension provisions imposed via rule 21A (2A) of the Central GST  Rules, 2017.


As per that, the suspension of GST registration would be done in the following manner:

  • Firstly, owing to differences, as said above, the GST registration would be suspended 
  • System-generated intimation for suspension of registration and notice for cancellation thereof in FORM GST REG-31 would be at taxpayer’s disposal.


At present, the FORM GST REG-31 is not on the GST portal, and accordingly notice of the suspension would be available in FORM GST REG 17.

  • By receiving the notice or intimation, the taxpayer is needed to submit an appropriate reply in FORM GST REG-18. That reply must be submitted within 30 days from the date of receipt of the notice or intimation.
  • On the basis of the reply, the tax officer would take any of the following measures
  • Issue order removing the suspension proceedings in FORM GST REG 20, or 
  • Issue order cancelling the GST registration in FORM GST REG -19

  • As the  action taken by the tax officer according to the GST Act and rules, the status of the taxpayer may be changed to any of the following : 
  • Active, the GST suspension proceeding is dropped.
  • Cancelled Suo-moto- As the registration of GST is cancelled.





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