GST Revocation Under Composition Scheme

The cancellation of Goods and Services Tax (GST) registration is a process that can be initiated by either the tax department or the registered person for specified reasons. When the department cancels the registration, a provision for GST revocation exists upon the taxpayer's request, applicable to those under the composition scheme. Even for composition scheme taxpayers, the cancellation necessitates filing a final return within three months of the cancellation. This article delves into GST Revocation Under the Composition Scheme. IndiaFilings offers seamless assistance in the GST revocation process. Contact our experts today.

What is GST revocation?

GST revocation involves reversing the cancellation of a Goods and Services Tax (GST) registration. Suppose a taxpayer has had their GST registration cancelled by their choice or the tax authorities. In that case, they can apply for revocation to regain their GST registration. IndiaFilings streamlines the process of revoking your Goods and Services Tax (GST) registration. With a team of experts, we guide you effortlessly through the GST revocation steps while ensuring all necessary regulations are followed.

Rule 23 - Revocation of Cancelled GST Registration

Rule 23, found in the Central Goods and Services Tax Rules of 2017, focuses on the process and criteria necessary for reinstating a previously cancelled GST registration within India's GST framework. It details the specific steps and conditions required for a business to reverse the cancellation of its GST registration.

Click here to learn more about GST Certificate: Key Aspects and Importance

What is the GST Composition Scheme?

The GST Composition Scheme is a simplified tax regime for small businesses. This scheme stands out from the standard GST process by offering two significant advantages: it considerably reduces the amount of paperwork and compliance required, and it entails a lower tax burden.

Typically, regular taxpayers must file three monthly GST returns (GSTR-1, GSTR-2, and GSTR-3) and an annual return (GSTR 9).
In contrast, those who opt for the GST Composition Scheme must only submit one quarterly return (GSTR 4) and one annual return (GSTR 9A), simplifying the filing process.
Additionally, under this scheme, businesses are subject to a fixed GST rate ranging from 1% to 6% of their turnover, generally lower than standard GST rates.

GST Registration Cancellation

GST registration can be cancelled for various reasons, either initiated by the tax department or through an application by the registered person. In the unfortunate event of the registered person's death, their legal heirs can request cancellation. If the department cancels the registration, there is a provision for revocation. Following the cancellation, the individual is required to file a final return.

Reasons for Cancellation:

A person registered under previous laws but not liable under the GST Act.
Discontinuation, complete transfer (including the proprietor's death), amalgamation with another legal entity, demerger, or business disposal.
Change in the constitution of the company.
Taxable persons, excluding those voluntarily registered, are no longer liable for registration.
Violation of provisions of the Act or rules.
Non-furnishing of returns for three consecutive tax periods by those registered under the Composition Scheme.
Non-furnishing of returns for six months by any registered person (excluding Composition levy).
Non-commencement of business within six months from the date of voluntary registration.
Registration is obtained through fraud, willful misstatement, or suppression of facts.

Reasons for Revoking GST Registration

GST registration may be revoked for specific reasons. This revocation can be instigated by the tax department or the person who holds the registration. If the registered individual passes away, their legal heirs can request cancellation. When the tax department cancels a registration, there is an option to apply for its revocation. After the cancellation of their registration, the individual must submit a final GST return.

Procedure for GST Revocation Under Composition Scheme

If the proper officer has cancelled a registration of his own accord without a request from the registered person, then the affected individual can apply to reverse this cancellation. Using FORM GST REG-21, this application should be submitted to the Proper Officer. It must be filed within thirty days of receiving the cancellation notice, which can be done via the common portal or at a Facilitation Centre designated by the Commissioner. These 30 days may be extended:

Up to thirty days by the Additional Commissioner or Joint Commissioner, as applicable.
The Commissioner can extend this period by thirty days beyond the initial extension.
If the registration was cancelled due to the non-filing of returns, an application for revocation can only be submitted after these pending returns are filed. Additionally, any tax due as per these returns must be paid, along with any applicable interest, penalties, and late fees related to the said returns.
Upon reviewing the application, if the Proper Officer, after recording reasons in writing, deems adequate grounds to revoke the cancellation of registration, they will proceed. This revocation will be formalized through an order in FORM GST REG-22. This order must be issued within thirty days from the application's date, and the decision will be communicated to the applicant.
However, if on examination of the application for revocation, the Proper Officer is not satisfied. He will issue a notice in FORM GST REG–23 requiring the applicant to show cause as to why the application submitted for revocation should not be rejected, and the applicant has to furnish the reply within seven working days from the date of the service of the notice in FORM GST REG-24.
After reviewing the application, if the Proper Officer, upon recording the reasons in writing, is convinced that there are valid grounds for revoking the cancellation of registration, they will issue an order in FORM GST REG-22. This order must be issued within thirty days of receiving the application, and the decision will be communicated to the applicant.
Upon receiving the information or clarification in FORM GST REG-24, the Proper Officer will conclude the application within 30 days of receiving such details. If the provided information or clarification is deemed satisfactory, the Proper Officer will process the application as per para (c) above. However, the applicant can be heard if the information or clarification is not considered good. Subsequently, after recording the reasons in writing, the Proper Officer may reject the application for revocation of cancellation of registration by issuing an order in FORM GST REG-05 and communicating the decision to the applicant.
The revocation of cancellation of registration under the SGST Act or the UTGST Act, as applicable, will be considered a revocation of registration cancellation under the CGST Act and vice versa.
All returns due for the period starting from the date of the order of cancellation of registration until the date of the order of revocation of registration must be submitted by the concerned person within thirty days from the date of the order of revocation of cancellation of registration.
Where the registration has been cancelled with retrospective effect, the registered person shall furnish all returns relating to the period from the effective date of cancellation of registration till the date of order of revocation of cancellation of registration within thirty days from the date of order of revocation of cancellation of registration.
If the registration has been suspended under sub-Rule 21A(2A) due to a violation of the provisions in clause (b) or clause (c) of sub-Section (2), and if the proper officer has not yet cancelled the registration under Section 29, the suspension of registration will be considered as revoked upon the submission of all pending returns.
The cancellation of registration will not impact the person's responsibility to pay taxes and other dues or fulfil any obligations under the GST Act or rules made thereunder for any period preceding the date of cancellation. This applies regardless of whether such tax and other dues are determined before or after the date of cancellation.

Why Choose Indiafilings for the GST revocation process?

IndiaFilings offers expert assistance navigating the GST revocation process, ensuring a streamlined and compliant business experience. Our dedicated team guides clients through the complexities of revoking Goods and Services Tax (GST) registration, providing comprehensive support to meet all regulatory requirements. Contact our experts today to simplify your GST revocation process and ensure compliance.