Registration: Liability, Cancellation and Revocation of Cancellation | Tax Law - CLAT PG PDF Download

Introduction

• In any tax system, registration is crucial for identifying taxpayers and ensuring tax compliance.
• Under GST Law, registration involves obtaining a unique number from tax authorities to collect tax on behalf of the government and avail Input Tax Credit.
• Without registration, a person cannot collect tax from customers or claim Input Tax Credit.

Need and Advantages of Registration

• Registration confers legal recognition as a supplier of goods or services.
• It authorizes the taxpayer to collect tax and pass on tax credit to purchasers.
• Taxpayers can claim Input Tax Credit and utilize it for tax payments.
• Ensures seamless flow of Input Tax Credit at the national level.
• Prescribed under Chapter VI of the CGST Act, 2017.

Liability to Register

• As per Section 22 of the CGST Act, every supplier needs to get registered.
• Small businesses with all-India aggregate turnover below ₹20 lakh (or ₹10 lakh in certain northeastern states) are not required to register but can do so voluntarily.

Persons Not Liable for GST Registration

• Section 23 of the CGST Act specifies persons not liable for registration, including those supplying goods or services exempt from tax and agriculturists supplying produce.

Compulsory Registration in Certain Cases: Specified categories of persons are required to take registration under GST, including those making inter-State taxable supply, casual taxable persons, non-resident taxable persons, and others as notified by the government.

Manner of Registration Under GST

• Persons liable to register under section 22 or section 24 must apply for registration within 30 days of becoming liable.
• Casual taxable persons or non-resident taxable persons should apply at least 5 days before starting business.
• Registration is granted in a State or Union territory, with separate registrations for multiple business verticals.
• Persons not liable to register may voluntarily register and comply with all provisions of the GST Act.
• Each registration is treated as a distinct person for GST purposes.
• Permanent Account Number (PAN) is required for registration.
• Registration or Unique Identity Number is issued within 7 days.

Amendment of GST Registration

• Registered persons must inform the proper officer of any changes in registration information within 15 days.
• The proper officer may approve or reject amendments, providing an opportunity to be heard.

Cancellation of GST Registration

• The business has been discontinued, fully transferred for any reason (including the proprietor's death), amalgamated, demerged, or otherwise disposed of.
• There's a change in the business structure.
• A taxpayer, other than one who voluntarily registered, is no longer required to be registered as per Sections 22 or 24.

(2) The proper officer can cancel a person’s registration from a specified date, including a retrospective one, under these conditions:

• The registered person has violated the provisions of the Act or rules prescribed.
• A person under the composition scheme (Section 10) hasn't filed returns for three consecutive tax periods.
• Any other registered person hasn't filed returns for six continuous months.
• A voluntarily registered person (under Section 25(3)) hasn’t commenced business within six months of registration.
• The registration was obtained through fraud, intentional misrepresentation, or by suppressing facts.

Note: The proper officer must provide an opportunity for the person to be heard before canceling their registration.

(3) Even after registration is canceled, the person remains liable to pay taxes and meet any obligations under this Act for the period before the cancellation date. This applies regardless of whether taxes and dues were determined before or after the cancellation.
(4) If a registration is canceled under the State GST or Union Territory GST Act, it is considered canceled under the CGST Act as well.
(5) A registered person whose registration is canceled must pay an amount equal to the input tax credit for the stock of inputs, semi-finished, or finished goods held, including capital goods or machinery, as of the day before the cancellation date. This can be settled through the electronic credit or cash ledger. The amount will be whichever is higher: the input tax credit or the output tax on these goods, calculated as prescribed.
(6) For capital goods or machinery, the taxpayer must pay the input tax credit taken on these items, reduced by a prescribed percentage, or the tax payable on these goods, whichever is applicable.

Revocation of Cancellation of GST Registration

1. A registered person whose registration has been canceled by the proper officer can apply for revocation within 30 days from the date they receive the cancellation order.

2. The proper officer can either revoke the cancellation or reject the application. However, before rejecting the application, the officer must give the applicant an opportunity to present their case.

3. If the registration cancellation is revoked under the SGST or UTGST Act, it is considered as a revocation under Section 30 of the CGST Act as well.