The Goods and Services Tax (GST) is a tax levied on the supply of goods and services in India. GST registration is mandatory for businesses whose turnover exceeds a certain limit. GST registration comes with its own set of benefits, such as input tax credit and the ability to collect GST from customers. However, there might be situations where a business entity might want to cancel its GST registration. In such cases, the process of GST cancellation comes into play.
What is Revocation of GST Cancellation?
Revocation of GST cancellation is the process of reviving a cancelled GST registration. GST registration can be cancelled by the GST authorities or by the business entity itself. Once a GST registration is cancelled, the business cannot collect GST from its customers or claim input tax credit. However, in some cases, the business might want to continue its activities and therefore might want to revive its cancelled GST registration. In such cases, the process of revocation of GST cancellation comes into play.
Meaning of Revocation
Revocation means to cancel or annul something. In the context of GST, revocation of GST cancellation means cancelling the cancellation of GST registration. In other words, it means reviving the cancelled GST registration.
Reasons for Revocation
There could be various reasons why a business might want to revive its cancelled GST registration. Some of the reasons are:
- Business operations have started again
- Input tax credit needs to be claimed
- GST has been paid but not collected from customers
- Business wants to continue its activities
Revocation of GST Cancellation Procedure
The procedure for revocation of GST cancellation is as follows:
Application for Revocation
The business entity that wants to revive its cancelled GST registration needs to file an application for revocation in Form GST REG-21. The application needs to be filed within 30 days from the date of cancellation of GST registration.
Time Limit for Application
If the business entity fails to file an application for revocation within 30 days, it can still file the application within 30 days from the date of receipt of the order of cancellation of GST registration.
Rejection of Application
The GST authorities can reject the application for revocation of GST cancellation if they are not satisfied with the reasons stated in the application. The rejection order needs to be issued in Form GST REG-05.
Consequences of Revocation of GST Cancellation
Revocation of GST cancellation has certain consequences. They are:
Restoration of GST Registration
Once the revocation of GST cancellation is approved, the cancelled GST registration is restored with effect from the date of cancellation.
Liability to pay
Any liability to pay tax, interest, or penalty that arose during the period when the GST registration was cancelled needs to be discharged by the business entity.
Penalty and Prosecution
If the business entity fails to comply with the provisions related to the revival of the cancelled GST registration, it can attract penalty and prosecution under the GST Act.
Appeal Against the Order of Revocation
If the application for revocation of GST cancellation is rejected by the GST authorities, the business entity can file an appeal against the order. The appeal needs to be filed within 30 days from the date of the rejection order in Form GST APL-01.
Conclusion
Revocation of GST cancellation is a process that allows a business entity to revive its cancelled GST registration. The process of revocation needs to be followed within the prescribed time limit and the business entity needs to comply with the provisions related to it. Revocation of GST cancellation has consequences such as restoration of GST registration and liability to pay tax, interest, or penalty. It is essential for businesses to understand the procedure of revocation of GST cancellation to avoid any penalties or legal action.