GST Update on department more cautious in granting new registrations

DEPARTMENT MORE CAUTIOUS IN GRANTING NEW REGISTRATIONS

The Central Board of Indirect Taxes and Customs (“CBIC”) vide its Circular No. 95/14/2019-GST dated March 28, 2019 which has clarified that application for new registration under GST having the same PAN shall be rejected if the person whose GST registration was cancelled earlier due to default of not furnishing returns for a consecutive period of 3 or 6 tax periods (as the case may be) and revocation of cancellation of registration has not been filed.
The Department issued Circular No. 95/14/2019-GST dated the 28th March, 2019 clarifying the office bearers of the department to additionally check that the application for new registration is not filed by the assesses whose registration was cancelled under the provisions of Section 2(29) of the CGST Act.
Section 29(2) of the CGST Act states that the proper officer may cancel the registration of a person from such date, including any retrospective date, as he may deem fit, where,––
(a) a registered person has contravened such provisions of the Act or the rules made there under as may be prescribed; or
(b) a person paying tax under section 10 has not furnished returns for three consecutive tax periods; or
(c) any registered person, other than a person specified in clause (b), has not furnished returns for a continuous period of six months; or
(d) any person who has taken voluntary registration under sub-section (3) of section 25 has not commenced business within six months from the date of registration; or
(e) registration has been obtained by means of fraud, willful misstatement or suppression of facts:

Provided that the proper officer shall not cancel the registration without giving the person an opportunity of being heard.
It is noticed that assesses who continue to carry on business even after the cancellation of their registration but are required to have valid registration under GST, are not applying for revocation of cancellation of registration as specified in section 30 of the CGST Act read with rule 23 of the CGST Rules. Instead, such persons are applying for fresh registration.
Such new applications might have been made as such person may not have furnished requisite returns and not paid tax for the tax periods covered under the old/cancelled registration, and this can amount the revenue a handsome amount of money.
Some of the information that may be concealed in the application for registration in FORM GST REG -01 are S. No. 7 - Date of Commencement of Business, S. No. 8 - Date on which liability to register arises, S. No. 14 - Reason to obtain registration etc. Such persons may also not furnish the details of earlier registrations, if any, obtained under GST on the same PAN.
The officers are directed to exercise due caution while processing the application for registration submitted by the taxpayers, where the tax payer is seeking another registration within the State. It is to be verified that he doesn’t possess an existing registration within the said State or his earlier registration has been cancelled and he is not applying for revocation of cancellation of registration. It was clarified that continuance of the conditions specified in clauses (b) and (c) of sub-section (2) of section 29 of the CGST Act shall be deemed to be a “deficiency” within the meaning of sub-rule (2) of rule 9 of the CGST Rules.
The proper officer are directed to compare the information pertaining to earlier registrations with the information contained in the present application, the grounds on which the earlier registration(s) were cancelled and the current status of the statutory violations for which the earlier registration(s) were cancelled. The data may be verified on common portal by fetching the details of registration taken on the PAN mentioned in the new application vis-a-vis cancellation of registration obtained on same PAN.
Further, it is clarified that where the applicant fails to furnish sufficient convincing justification or the proper officer is not satisfied with the clarification, information or documents furnished, then, his application for fresh registration may be considered for rejection.
The content of this GST update is for educational purpose only and not intended
for solicitation.

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GST Update on department more cautious in granting new registrations

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