The GST laws have brought transparency and integrity to India’s indirect tax system. The government has introduced various amendments to ease compliance while making regulations stricter to prevent tax evasion. Non-compliance with GST rules can result in the suspension or cancellation of a GST number, restricting businesses from making taxable supplies. Below, we discuss the reasons for suspension and the steps to reactivate a suspended GST registration.
GST number suspended? Follow these steps to reactivate it quickly and avoid disruptions!
Reasons for Suspension/Cancellation of GST Registration
Legal Provisions
- Section 29 of the CGST Act, 2017: Covers GST registration suspension.
- Rule 21 of the CGST Rules, 2017: Outlines the suspension procedure.
- Section 29(2): Allows officers to cancel registration if a taxpayer fails to file returns for six consecutive months.
Read More: GST Casual Taxpayer Invoice Requirements and Payment Requirements
Common Reasons for GST Suspension/Cancellation
| Reason | Explanation |
|---|---|
| Non-filing of returns | Regular taxpayers failing to file returns for six months face suspension. |
| Business not operating from registered address | Mismatch in location and registration details results in suspension. |
| Fraudulent registration | If obtained fraudulently, GST registration is suspended. |
| Fake invoicing | Issuing invoices without actual supply can lead to cancellation. |
Note: GST registration will not be suspended without prior notice. The officer first issues a warning or gives an opportunity to correct the issue before suspension.
Consequences of GST Suspension
| Impact | Consequence |
|---|---|
| Business operations | Cannot make taxable supplies, issue invoices, or collect taxes. |
| GST compliance | Cannot file returns or pay taxes. |
| Input Tax Credit (ITC) | Supplier loses the ability to claim ITC. |
Upon receiving a suspension notice, taxpayers must promptly contact their assessing officer, rectify the issue, and reactivate their registration to avoid cancellation and penalties.
How to Reactivate a Suspended GST Number
Taxpayers must follow different procedures depending on the reason for suspension:
Reactivation Steps for Common Suspension Reasons
| Scenario | Steps to Reactivate |
|---|---|
| Non-filing of returns | File pending returns and apply for reactivation within 30 days. |
| Business address mismatch | Update address details on the GST portal and submit relevant proof. |
| Fraudulent registration | Provide justification and supporting documents to the tax officer. |
Automated Drop Proceedings (for Non-Filing of Returns)
In December 2022, the Goods and Services Network (GSTN) introduced a ‘drop proceedings’ feature on the GST portal to revoke suspensions due to non-filing of returns.
Steps to Activate Suspended GSTIN
- Login to the GST portal.
- Navigate to Services > User Services.
- Select View Notices and Orders.
- Click Initiate Drop Proceedings.
- A confirmation message appears, and the GST number is automatically activated.
- Eligibility: Only for suspensions after December 1, 2022.
- Older Suspensions: Taxpayers must contact jurisdictional tax officers.
Read More: GST Registration Documents Checklist for Small Businesses
New Rule on Revocation of GST Cancellation
Notification No. 38/2023 (Dated August 4, 2023):
- The revocation application deadline is extended from 30 days to 90 days.
- A further extension up to 180 days is possible with approval from a GST officer.
GST number suspended? Follow these steps to reactivate it quickly and avoid disruptions!
Conclusion
To avoid GST suspension or cancellation, businesses must ensure timely tax payments and return filings. If a suspension notice is received, taxpayers should take immediate corrective actions. For non-filing suspensions, automated drop proceedings provide a quick solution. For other suspensions, taxpayers must contact jurisdictional officers to restore their GST registration and resume business operations.
CaptainBiz helps businesses stay GST-compliant by offering expert guidance on registration, filing, and compliance.
Read More: GST Return Filing: CBIC Extends Deadlines for GSTR-1, GSTR-3B Due to GST Portal Glitches
FAQs
1. Why was my GST registration suspended?
GST suspension usually occurs due to non-filing of returns, incorrect business details, fraudulent registration, or involvement in fake invoicing.
2. How can I check if my GST number is suspended?
You can check your GST registration status by logging into the GST portal and navigating to “Services > User Services > View Notices and Orders.”
3. What should I do if my GST is suspended due to non-filing of returns?
File all pending GST returns immediately and apply for reactivation within 30 days through the GST portal.
4. Can I still issue invoices and collect GST if my registration is suspended?
No, a suspended GST number restricts you from issuing invoices, collecting GST, and availing Input Tax Credit (ITC).
5. What is the automated ‘Drop Proceedings’ feature for GST suspension?
This feature allows automatic reactivation of GST registration if suspension was due to non-filing of returns after December 1, 2022.
6. How long does it take to reactivate a suspended GST number?
If resolved through ‘Drop Proceedings,’ activation is instant. Otherwise, reactivation depends on the GST officer’s verification and approval.
7. What happens if my GST registration is cancelled instead of suspended?
You will need to file an application for revocation within 90 days (extendable up to 180 days) as per Notification No. 38/2023.
Facing a suspended GST number? Learn how to activate it with a FREE 1:1 CA consultation from a CaptainBiz expert. Book Now!
