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June 29, 2020

Relief to GST taxpayers as revocation of cancellation has been extended by CBIC order

by facelesscompliance in GST

Relief to GST taxpayers as revocation of cancellation has been extended by CBIC order

The Ministry of Finance – Department of Revenue (CBIC) published an order on 25th June, 2020. Order No. 01/2020-Central Tax provides an opportunityto GST taxpayers torevoke the cancellation of GST Registration.

As COVID-19 continues to spread across the world, businesses are facing significant levels of instability and uncertainty caused by weakened financial markets and disruption to workplace operations. Compliance is a key area where the impact of COVID-19 is felt immediately and keenly. In a time where social distancing is being preached to mitigate the issue of the pandemic, registered GST holders across the country are facing problems in fulfilling their GST compliances.

To facilitate taxpayers who could not get their canceled GST registrations restored in time, a benefit is being provided for filing of the application for revocation of cancellation of registration in all cases where registrations have been canceled till 12.06.2020.

GST Registration can be cancelled due to the below mentioned reasons:-

  • person registered under any of the existing laws, but who is not liable to be registered under the GST Act
  • business has been discontinued, transferred fully for any reason
  • there is any change in the constitution of the business
  • the taxable person is no longer liable to be registered
  • registered person has contravened such provisions of the GST law
  • person paying tax under Composition levy has not furnished returns for 3 consecutive tax periods
  • any registered person, other than a person paying tax under Composition levy has not furnished returns for a continuous period of 6 months
  • any person who has taken voluntary registration section 25(3) and has not commenced business within 6 months from the date of registration
  • registration has been obtained by means of fraud, willful misstatement or suppression of facts

Procedure for Revocation of Cancellation

Application for Revocation

When the registration has been cancelled by the Proper Officer on his own motion, then the registered person, whose registration has been cancelled, can submit an application for revocation of cancellation of registration, to the Proper Officer, within a period of 30 days from the date of the service of the order of cancellation of registration.

Steps taken if Proper Officer is satisfied

On examination of the application if the Proper Officer is satisfied, that there are sufficient grounds for revocation of cancellation of registration, then he shall revoke such cancellation by an order within 30 days from the date of the receipt of the application and communicate the same to the applicant.

Steps taken if Proper Officer is not satisfied

  • If on examination of the application for revocation, if the Proper Officer is not satisfied then he will issue a notice 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 7 working days from the date of the service of the notice.
  • Upon receipt of clarification, the Proper Officer if satisfied shall dispose of the application within 30 days from the date of the receipt of such clarification from the applicant.
  • In case it is not satisfactory the applicant will be mandatorily given an opportunity of being heard, after which the Proper Officer after recording the reasons in writing may by an order, reject the application for revocation of cancellation of registration and communicate the same to the applicant.

What is the Central Goods and Services Tax (Removal of Difficulties) Order, 2020?

Certain circumstances may arise due to which taxpayers could not apply for revocation of cancellation within the specified time period of 30 days from the date of service of the cancellation order, as a result there would be certain issues in proceeding with the provisions of revocation of cancellation of registration.

Therefore, in exercise of the powers conferred by section 172 of the Central Goods and Services Tax Act, 2017, the Central Government, on the recommendations of the Council, hereby makes the Central Goods and Services Tax (Removal of Difficulties) Order, 2020, to remove such difficulties.

According to the said order, for computing the time limit (end of 30 days) for application of revocation, the due date shall be later of:-

  • 30 days from the date of service of the said cancellation order

Or

  • 31st August, 2020

This benefit is only available in cases where cancellation order was passed up to 12th June, 2020.

Illustrations to understand the above Order:-

IndividualDate of Cancellation of Registration Order30 days from date of CancellationDue Date of RevocationRemarks
A01.01.202031.01.202031.08.2020Later of 31st Aug or 31st Jan
B11.06.202011.07.202031.08.2020Later of 31st Aug or 11th July
C15.06.202015.07.202015.07.2020Cancellation order was passed after 12th June, therefore limit of 30 days only will be applicable

Section 122 of the Finance Act, 2020 amended Section 30 of the CGST Act, 2017. The changes are as under:-

Before AmendmentAfter Amendment
SECTION 30. Revocation of cancellation of registration (1) Subject to such conditions as may be prescribed, any registered person, whose registration is cancelled by the proper officer on his own motion, may apply to such officer for revocation of cancellation of the registration in the prescribed manner within thirty days from the date of service of the cancellation order:   Provided that the registered person who was served notice under sub- section (2) of section 29 in the manner as provided in clause (c) or clause (d) of sub-section (1) of section 169 and who could not reply to the said notice, thereby resulting in cancellation of his registration certificate and is hence unable to file application for revocation of cancellation of registration under sub-section (1) of section 30 of the Act, against such order passed up to 31-3- 2019, shall be allowed to file application for revocation of cancellation of the registration not later than 22-7-2019.SECTION 30. Revocation of cancellation of registration (1) Subject to such conditions as may be prescribed, any registered person, whose registration is cancelled by the proper officer on his own motion, may apply to such officer for revocation of cancellation of the registration in the prescribed manner within thirty days from the date of service of the cancellation order: Provided that such period may, on sufficient cause being shown, and for reasons to be recorded in writing, be extended,— (a) by the Additional Commissioner or the Joint Commissioner, as the case may be, for a period not exceeding thirty days; (b) by the Commissioner, for a further period not exceeding thirty days, beyond the period specified in clause (a)  

Although the Finance Act, 2020 is already been enacted on 27.03.2020, for some reason amendment on Section 30 of the CGST Act has not been notified and put into effect. If this amendment is notified it would eliminate the need of the GST Council to intervene in such procedural matters.

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