“taxable person” means a person who is registered or liable to be registered under section 22 or section 24.
Casual taxable person section 2(20)
A person who occasionally undertakes transactions involving supply of goods or services or both in the course or furtherance of business, whether as principal, agent or in any other capacity, in a State or a Union territory where he has no fixed place of business.
Non Resident taxable person section 2(77)
Any person who occasionally undertakes transactions involving supply of goods or services or both, whether as principal or agent or in any other capacity, but who has no fixed place of business or residence in India.
In GST, registration has been linked with taxability. As we have discussed in first chapter, levy of any tax requires answer of following four questions
On which transactions tax shall be levied?
At what rate tax shall be levied?
On which value tax shall be levied?
Who shall pay tax?
As per the charging section 9(1), tax shall be paid by a taxable person. Taxable person has been defined under section 2(107). As per this section, “taxable person” means a person who is registered or liable to be registered under section 22 or section 24.
It is important to note that even if a person is not required to be registered under section 22 or 24 but he voluntarily takes registration then also he is called taxable person and once registered he needs to collect GST from customers and needs to pay the same to government.
Now, let us understand the provisions of GST registration in detail.
There are mainly three types of registration under GST
Compulsory registration based on threshold of turnover – section 22
Compulsory registration irrespective of turnover – section 24
Voluntary registration – section 25(3)
It is also relevant to note at this stage that irrespective of requirements of section 22 and 24, there are certain categories of persons who are exempt from taking registration. This provision is given under section 23.
Let us examine these provisions one by one
1.Compulsory registration based on threshold of turnover – section 22
As per section 22, Every supplier shall be liable to be registered under GST, if his aggregate turn over in a financial year exceeds
Title
Title
Supplies from
Turnover exceeds
Special category states
Rs. 10,00,000/- ( See Note 1)
Other than special category states
Rs. 20,00,000/-
NOTES:
Special category of states are mentioned in Article 279A(4)(g) as under;
Arunachal Pradesh
Assam
Jammu & Kashmir
Manipur
Meghalaya
Nagaland
Sikkim
Tripura
Himachal Pradesh
Uttarakhand
Mizoram
By GST Amendment Act, 2018 following proviso has been inserted.
Provided further that the Government may at the request of a special category state and on the recommendation of GST Council, enhance the aggregate turnover referred from Rs. 10 lakhs to higher amount but not exceeding Rs. 20 lakhs.
By using this provisions following special categories of states have increased the threshold limit for registration under section 22 from 10 lakhs to 20 lakhs
Arunachal Pradesh
Assam
Jammu and Kashmir
Meghalaya
Sikkim
Himachal Pradesh
It is also important to note provisions of notification 10/2019-CT dated 7th March, 2019 under section 23(2)exempting certain categories of persons from obtaining registration if their aggregate turn over in a financial year does not exceed forty lakh (40 lakh rupees). Provisions of this notification is given below-
Any person who is engaged exclusively in supply of goods are eligible for this higher limit. (Limit for obtaining registration for service providers has not been increased. It is increased only for persons exclusively engaged in supply of goods).
Such person is not covered under section 24 (i.e. if a person is covered under section 24, he is required to take compulsory registration).
Person is not engaged in making intra-state supplies in the state supplies in the state of Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Punduchery, Sikkim, Telangana, Tripura, Uttarakhand.
Person taking voluntary registration under section 25(3) or such registered persons who intend to continue with their registration shall not be eligible for higher limit.
Persons makes supplies of following Goods shall also not be eligible for higher limit.
Ice cream and other edible ice, whether or not containing cocoa.
Pan Masala
Tobacco and manufactured tobacco substitutes.
Aggregate Turnover has been defined in Section 2 (6) of CGST Act as the aggregate value of all taxable supplies (excluding the value of inward supplies on which tax is payable by a person on reverse charge basis), exempt supplies, exports of goods or services or both and inter-State supplies of persons having the same Permanent Account Number, to be computed on all India basis but excludes central tax, State tax, Union territory tax, integrated tax and cess.
Further, “aggregate turnover” shall include all supplies made by the taxable person, whether on his own account or made on behalf of all his principals and the supply of goods, after completion of job work, by a registered job worker shall be treated as the supply of goods by the principal referred to in section 143, and the value of such goods shall not be included in the aggregate turnover of the registered job worker.
Example: XYZ Petroleum Ltd., Gujarat, is engaged in supplying lubricating oil as well as petrol. Supply of petrol is not leviable to GST, but supply of lubricating oil is taxable. In order to determine whether XYZ Petroleum Ltd. is liable for registration, turnover of both the supplies- non-taxable and taxable- would be taken into consideration and if the same exceeds '20 Lakh. Then XYZ Petroleum Ltd. Needs to apply for registration.
Example: ABC Ltd. has appointed M/s PQR & Associates as its agent. All the supplies of goods made by M/s PQR & Associates as an agent of ABC Ltd. will also be included in the aggregate turnover of M/s PQR & Associates.
If a person is liable to get registration as per the table shown above, he will take registration in every state from where he makes a taxable supply of goods or services or both
Example: Mr. A has made following supplies during the financial year.
From Gujarat Rs. 8 Lakh (Taxable)
From Maharashtra Rs. 7 Lakh (Taxable)
From Rajasthan Rs. 6 Lakh (Exempt)
As aggregate turnover of Mr. A is Rs. 21 Lakh, i.e. exceeding Rs. 20 Lakh, he is liable to take registration. However, he will take registration in the state of Gujarat and Maharashtra. He is not liable to take registration in Rajasthan.
Other provisions of section 22
a. Migration of taxpayers – section 22(2)
It has been provided under section 22(2) that “every person who, on the day immediately preceding the appointed day, is registered or holds a license under an existing law, shall be liable to be registered under this Act with effect from the appointed day i.e. 1st July,2017.”
GST has been implemented with effect from 1st July, 2017. Those who were registered under erstwhile laws like VAT, service tax etc are migrated to GST with effect from 1st July, 2017.
b. Registration when there is transfer of business- Section 22(3)
As per section 22(3), where a business carried on by a taxable person registered under this Act is transferred, whether on account of succession or otherwise, to another person as a going concern, the transferee or the successor, shall be liable to be registered with effect from the date of such transfer or succession.
c. Registration in case of transfer pursuant to Amalgamation Section 22(4)
Notwithstanding anything contained in sub-sections (1) and (3), in a case of transfer pursuant to sanction of a scheme or an arrangement for amalgamation or, as the case may be, demerger of two or more companies pursuant to an order of a High Court, Tribunal or otherwise, the transferee shall be liable to be registered, with effect from the date on which the Registrar of Companies issues a certificate of incorporation giving effect to such order of the High Court or Tribunal.
Compulsory registration irrespective of turnover – section 24
Section 24 provides for compulsory registration for certain class of persons, irrespective of their turnover. Section 24 has overriding effect over Section 22. That means, even if a person is not liable to take registration under Section 22, he is required to take registration if he is covered under Section 24.
Following are the categories of person required to take registration under Section 24––
Persons making any inter-State taxable supply (inter-state supply of services up to rupees twenty lakh exempted from registration under section 23)
Casual taxable persons making taxable supply;
Persons who are required to pay tax under reverse charge;
Person who are required to pay tax under sub-section (5) of section 9;
Non-resident taxable persons making taxable supply;
Persons who are required to deduct tax under section 51, whether or not separately registered under this Act;
Persons who make taxable supply of goods or services or both on behalf of other taxable persons whether as an agent or otherwise;
Input Service Distributor, whether or not separately registered under this Act;
persons who supply goods or services or both, other than supplies specified under sub-section (5) of section 9, through such electronic commerce operator who is required to collect tax at source under section 52;
every electronic commerce operator; who is required to collect tax at source under Section 52 (GST Amendment Act,2018).
every person supplying online information and database access or retrieval services from a place outside India to a person in India, other than a registered person; and
such other person or class of persons as may be notified by the Government on the recommendations of the Council.
(Each of these categories are already discussed or shall be discussed in relevant chapter)
Voluntary registration – section 25 (3)
As per section 25(3), a person, though not liable to be registered under section 22 or section 24 may get himself registered voluntarily, and all provisions of this Act, as are applicable to a registered person, shall apply to such person. This means if a person has not crossed threshold of aggregate turnover of twenty lakhs and still applies for registration then he is required to collect and pay GST just like other taxable person.
For example aggregate turnover of Mr. X is Rs. 1 lakh only till 11-08-2017. However he still applies for registration and registration is approved from 20-08-2017 then he is required to pay GST on all taxable supplies made by him on or after effective date of registration (i.e. 20-08-2017) irrespective of his turnover.
It is important to note here Rule 10(2) and 10(3) of GST rules:
As per Rule 10(2), the registration shall be effective from the date on which the person becomes liable to registration where the application for registration has been submitted within a period of thirty days from such date.
As per Rule 10(3), Where an application for registration has been submitted by the applicant after the expiry of thirty days from the date he becomes liable to registration, the effective date of registration shall be the date of the grant of registration under sub-rule (1) or sub rule (3) or sub-rule (5) of rule 9.
Further as per section 18(1)
a person who has applied for registration under this Act within thirty days from the date on which he becomes liable to registration and has been granted such registration shall be entitled to take credit of input tax in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock on the day immediately preceding the date from which he becomes liable to pay tax under the provisions of this Act
a person who takes registration under sub-section (3) of section 25 shall be entitled to take credit of input tax in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock on the day immediately preceding the date of grant of registration
(It is suggested to also read provisions of section 18 discussed in the chapter of input tax credit)
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Example: A Ltd. is engaged in taxable supply of Services in Maharashtra. Its turnover exceeded Rs. 20 Lakh on 1st September. It is liable to get registered by 1st October (30 Days) in the state of Maharashtra. It applies for registration on 29th September and is granted registration certificate on 5th October. The effective date of registration of A Ltd. is 1st September.
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Example: In above Example, if A Ltd. applies for registration on 3rd October and is granted registration certificate on 10th October. The effective date of
registration of is 10th October.
Exemption from registration under section 23
If a person is covered under section 23 of CGST Act, he is not required to take registration even if his aggregate turnover exceeds threshold limit. Further if a person is covered under section 24, he is required to take registration irrespective of his aggregate turnover. It is important to note that section 24 has overriding effect over section 22 but not on section 23. Hence if a person is covered under section 23 then he is exempt from taking registration even if he is also covered under section 24. For example, as per section 24, any person making inter-state taxable supply is required to take registration. However, section 23(2) exempts a person who is making inter- state supply of services from taking registration if his aggregate turnover does not exceed Rupees Twenty Lakhs.
Following are the provisions of section 23
Following persons shall not be liable to registration as per section 23 (2), namely:––
Any person engaged exclusively in the business of supplying goods or services or both those are not liable to tax or wholly exempt from tax under GST;
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Example: Mr. A is engaged in supply of milk. His aggregate turnover in the financial year is Rs. 22 Lakhs he is not required to take registration, because milk is fully exempt under GST.
Example: Mr. A is a Doctor, providing healthcare services, aggregate fees collected in the financial year is Rs. 23 Lakh. He is not required to take registration because healthcare services are fully exempt. Suppose, in this example, along with medical practice fees of Rs. 23 Lakh, Mr. A also receives annual rent of Rs. 15,000 from renting of a shop. In this case, Mr. A is required to take registration because his aggregate turnover exceeds Rs. 20 Lakh and he is not providing merely exempt supply because rent from commercial property is not exempted.
An agriculturist, to the extent of supply of produce out of cultivation of land.
Agriculturist has been defined under section 2(7) of CGST Act as under
“Agriculturist” means an individual or a Hindu Undivided Family who undertakes cultivation of land—
by own labour, or
by the labour of family, or
by servants on wages payable in cash or kind or by hired labour under personal supervision or the personal supervision of any member of the family
As per section 23(2), the Government may, on the recommendations of the Council, by notification, specify the category of persons who may be exempted from obtaining registration under this Act.
Following exemptions are given by Government under Section 23(2).
Job worker engaged in making inter-state supply of services to a registered person, if his aggregate turnover doesn't exceed Rs. 20 Lakh (Rs. 10 Lakh for special category states) (Notification 7/2017 – IGST).
A person making inter-state taxable supplies of handicraft goods, if his aggregate turnover doesn't exceed Rs. 20 Lakh (Rs. 10 Lakh for special category states) (Notification 8/2017 – IGST).
As per Notification 56/2018-CT dated 23-10-2018, benefit of this exemption is given to other goods also which are listed below:
Carved wood products (including table and kitchenware)
Carved wood products
Wood turning and lacquer ware
Bamboo products [decorative and utility items]
Grass, leaf and reed and fiber products, mats, pouches, wallets
Paper mache articles
Textile (handloom products)
Textiles hand printing
Zari thread
Carpet, rugs and durries
Textiles hand embroidery
Theatre costumes
Coir products (including mats, mattresses)
Leather footwear
Carved stone products (including statues, statuettes, figures of animals, writing sets, ashtray, candle stand)
Stones inlay work
Pottery and clay products, including terracotta
Metal table and kitchen ware (copper, brass ware)
Metal statues, images/statues vases, urns and crosses of the type used for decoration of metals of Chapters 73 and 74
Metal bidriware
Musical instruments
Horn and bone products
Conch shell crafts
Bamboo furniture, cane/Rattan furniture
Dolls and toys
Folk paintings, madhubani, patchitra, Rajasthani miniature
Person making inter-state supplies of taxable services, if his aggregate turnover doesn't exceed Rs. 20 Lakh (Rs. 10 Lakh for special category states) (Notification 10/ 2017 – IGST).
Person who is only engaged in making supplies of taxable goods or services or both, the total tax on which is liable to be paid by the recipient on Reverse Charge basis under Section 9(3) (Notification 5/2017 – Central Tax).
Persons making supplies of services through E-Commerce operators who is required to collect tax at source under Section 52, if his aggregate turnover doesn't exceed Rs. 20 Lakh (Rs. 10 Lakh for special category states) (Notification 65/2017 – Central Tax).
It is also important to note provisions of notification 10/2019-CT dated 7th March, 2019 under section 23(2) exempting certain categories of persons from obtaining registration if their aggregate turn over in a financial year does not exceed forty lakh (40 lakh rupees). Provisions of this notification is given below-
Any person who is engaged exclusively in supply of goods are eligible for this higher limit. (Limit for obtaining registration for service providers has not been increased. It is increased only for persons exclusively engaged in supply of goods).
Such person is not covered under section 24 (i.e. if a person is covered under section 24, he is required to take compulsory registration).
Person is not engaged in making intra-state supplies in the state supplies in the state of Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Punduchery, Sikkim, Telangana, Tripura, Uttarakhand.
Person taking voluntary registration under section 25(3) or such registered persons who intend to continue with their registration shall not be eligible for higher limit.
Persons makes supplies of following Goods shall also not be eligible for higher limit.
Ice cream and other edible ice, whether or not containing cocoa.
Pan Masala
Tobacco and manufactured tobacco substitutes.
Registration Procedure – Section 25
After understanding section 22, 23 and 24, now we can discuss section 25 which lays down the procedure for GST registration.
Let us examine each of the issues of registration process given under section 25
1. Time limit for applying GST registration
Every person who is liable to be registered under section 22 or section 24 shall apply for registration in every such State or Union territory in which he is so liable within thirty days from the date on which he becomes liable to registration, as prescribed under Rule 8 and 9.
A casual taxable person or a non-resident taxable person shall apply for registration at least five days prior to the commencement of business.
As per explanation to Section 25(1), every person who makes a supply from the territorial waters of India shall obtain registration in the coastal State or Union territory where the nearest point of the appropriate baseline is located.
As per section 25(3), a person, though not liable to be registered under section 22 or section 24 may get himself registered voluntarily, and all provisions of this Act, as are applicable to a registered person, shall apply to such person. This means if a person has not crossed threshold of twenty lakhs and still applies for registration then he is required to collect and pay GST just like other taxable person. For example aggregate turnover of Mr. X is Rs. 1 lakh only till 11-08-2017. However he still applies for registration and registration is approved from 20-08-2017 then he is required to pay GST on all taxable supplies made by him on or after effective date of registration (i.e. 20-08-2017) irrespective of his turnover.
It is important to note here Rule 10 (2) and 10 (3) of GST rules:
As per Rule 10(2), the registration shall be effective from the date on which the person becomes liable to registration where the application for registration has been submitted within a period of thirty days from such date.
As per Rule 10(3) Where an application for registration has been submitted by the applicant after the expiry of thirty days from the date of his becoming liable to registration, the effective date of registration shall be the date of the grant of registration under sub- rule (1) or sub rule (3) or sub-rule (5) of rule 9.
Registration Time limit and Input Tax Credit as per section 18(1)
a person who has applied for registration under this Act within thirty days from the date on which he becomes liable to registration and has been granted such registration shall be entitled to take credit of input tax in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock on the day immediately preceding the date from which he becomes liable to pay tax under the provisions of this Act
a person who takes registration under sub-section (3) of section 25 shall be entitled to take credit of input tax in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock on the day immediately preceding the date of grant of registration
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Example: A Ltd. is engaged in taxable supply of Services in Maharashtra. Its turnover exceeded Rs. 20 Lakh on 1st September. It is liable to get registered by 1st October (30 Days) in the state of Maharashtra. It applies for registration on 29th September and is granted registration certificate on 5th October. The effective date of registration of A Ltd. is 1st September.
Example: In above Example, if A Ltd. applies for registration on 3rd October and is granted registration certificate on 10th October. The effective date of registration of is 10th October.
Multiple registrations under single PAN
A. As per section 22 (1), a person is required to take registration in each state from which he is making taxable supplies if his aggregate turnover exceeds threshold limit mentioned in that section. This means there cannot be single registration for multiple states. Registration is required to be taken separately state wise. However if a person is making only exempt supplies from a particular state he is not required to take registration in that specific state
If a person has multiple branches in a single state, then he is not required to take separate registration branch wise. A single registration will be sufficient for multiple branches in same state.
As per proviso to Section 25(2), as amended by GST Amendment Act, 2018, if a person has a separate Place of Business within the State, then at his option, he can obtain separate registration for such Place of Business. As per Rule 11, as amended by Notification No. 03/2019-CT dated 29-01-2019, any person having multiple places of business within a State or a Union Territory can be granted separate registration in respect of each such place of business subject to following conditions:
such person has more than one place of business as defined in clause (85) of section 2
such person shall not pay tax under section 10 for any of his places of business if he is paying tax under section 9 for any other place of business
all separately registered places of business of such person shall pay tax under the Act on supply of goods or services or both made to another registered place of business of such person and issue a tax invoice or a bill of supply, as the case may be, for such supply.
(A beneficial provision for transfer of balance of Electronic Cash Ledger between such persons is also proposed by Finance Bill, 2022 which is discussed in relevant chapter)
B. Further as per Rule 41A, on taking new registration for a place of business credit can be transferred to the newly registered place of business by filing Form GST- ITC-02A.
As per this Rule, the Input Tax Credit shall be transferred to the newly registered entities in the ratio of value of Assets held by them at the time of registration.
Value of assets means the value of the entire assets of the business whether or not Input Tax Credit has been availed on them.
C. It is important to note that as per section 25(4), a person who has obtained or is required to obtain more than one registration, whether in one State or Union territory or more than one State or Union territory shall, in respect of each such registration, be treated as distinct persons for the purposes of this Act. Hence if two different registrations are taken under single PAN then if one branch sends goods to another branch it will become a Supply. Moreover, a person needs to file separate returns for each registration. Same provision will be applied for branches in different states.
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Example: A Ltd. has two branches, Ahmedabad and Surat. As both the branches are in the same state, A Ltd. has not taken separate registration for Surat Branch. In this case, if goods are sent from Ahmedabad to Surat or vice versa, GST is not required to be paid. Because, both are considered as the same person.
However, if different registrations are taken for Ahmedabad and Surat, and goods are sent from Ahmedabad to Surat or vice versa, then GST is required to be charged on this transaction. Because, due to different registrations, as per Section 25(4), Ahmedabad and Surat branches are considered as separate persons.
Other issues under section 25
Every person shall have a Permanent Account Number issued under the Income tax Act, 1961 in order to be eligible for grant of registration.
A person required to deduct tax under section 51 may have, in lieu of a Permanent Account Number, a Tax Deduction and Collection Account Number issued under the said Act in order to be eligible for grant of registration.
A non-resident taxable person may be granted registration on the basis of such other documents as may be prescribed. As per Rule 13 of GST Rules, non-resident taxable person shall be granted registration on the basis of self-attested copy of his valid passport duly signed or verified through electronic verification code.
Any specialized agency of the United Nations Organization or any Multilateral Financial Institution and Organization notified under the United Nations (Privileges and Immunities) Act, 1947, Consulate or Embassy of foreign countries; and any other person or class of persons, as may be notified by the Commissioner, shall be granted a Unique Identity Number in such manner and for such purposes, including refund of taxes on the notified supplies of goods or services or both received by them, as may be prescribed.
Every person required to be granted a Unique Identity Number in accordance with the provisions of sub-section (9) of section 25 may submit an application electronically in FORM GST REG-13, duly signed or verified through electronic verification code, in the manner specified in rule 8 at the common portal, either directly or through a Facilitation Centre notified by the Commissioner.
The proper officer may, upon submission of an application in FORM GST REG-13 or after filling up the said form or after receiving a recommendation from the Ministry of External Affairs, Government of India, assign a Unique Identity Number to the said person and issue a certificate in FORM GST REG-06 within a period of three working days from the date of the submission of the application.
Suo-motu registration: Where a person who is liable to be registered under this Act fails to obtain registration, the proper officer may, without prejudice to any action which may be taken, proceed to register such person in such manner as prescribe in Rule 16 of GST Rules.
As per Rule 16
Where, pursuant to any survey, enquiry, inspection, search or any other proceedings under the Act, the proper officer finds that a person liable to registration under the Act has failed to apply for such registration, such officer may register the said person on a temporary basis and issue an order in FORM GST REG- 12.
The registration granted under sub-rule (1) shall be effective from the date of such order granting registration.
Every person to whom a temporary registration has been granted under sub- rule (1) shall, within a period of ninety days from the date of the grant of such registration, submit an application for registration in the form and manner provided in rule 8 or rule 12:
Provided that where the said person has filed an appeal against the grant of temporary registration, in such case, the application for registration shall be submitted within a period of thirty days from the date of the issuance of the order upholding the liability to registration by the Appellate Authority.
The provisions of rule 9 and rule 10 relating to verification and the issue of the certificate of registration shall, mutatis mutandis, apply to an application submitted under sub-rule (3).
The Goods and Services Tax Identification Number assigned, pursuant to the verification under sub-rule (4), shall be effective from the date of the order granting registration under sub-rule (1).
Mandatory Aadhar Authentication for GST Registration.
Sub section 6A to 6C inserted to section 25 of the CGST Act requires mandatory Aadhar authentication for GST registration. These sections came into force from 1st January, 2020. Sub section 6D of section 25 provides that the Government can notify person or class of persons to whom provisions of section 25(6A) to 25 (6C) shall not apply.
Government issued notification 17/2020 and then suppressed the same by issuing a new notification 03/2021 dated 23rdFebruary, 2021 which got corrected by notification 36/2021 dated 24th September, 2021. This notification provides that provisions of Sub-Section 6A, 6B and 6C of section 25 shall not apply to following persons:
A person who is not resident of India
Department of State or Central Government
Local Authority
Statutory Body
Public Sector Undertaking
Person applying for registration under section 25(9) (agencies of United Nations etc)
As provided by notification 35/2021 dated 29th August, 2021 Bank account linked with PAN needs to be provided for GST registration. Further, for proprietorship firms, PAN needs to be linked with Aadhar.
Notification no 94/2020 dated 22nd December 2020 has made some
significant changes to registration rules and procedures which readers can note-
Under Rule 9 it is provided that in case the applicant does not opt for Aadhar authentication or even in case where he opts for Aadhar verification but proper officer with the approval of an officer not below the rank of Assistant Commissioner deems fit then place of business can be physically verified.
In case where physical verification is necessary as above then the registration can be granted within 30 days from the date of submission of application after completion of physical verification.
It has also been provided that the physical verification shall be done in the presence of the applicant.
Further, In rule 9, the time limit for granting registration has been increased from 3 days to 7 days.
Deemed Registration Under Section 26
As readers are aware that CGST and SGST Acts work parallel. Hence, there is no need to take separate registration under CGST and SGST Act. As per section 26, any Grant of registration under CGST Act will be deemed as grant of registration under SGST Act and vice versa.
Further any rejection of application for registration under CGST Act will be deemed as rejection under SGST Act and Vice Versa.
Registration of Casual Taxable Person and Non Resident Taxable Person Under Section 27
Section 27 prescribes special provisions for registration of casual taxable person and non-resident taxable person
Casual taxable person has been defined under section 2 (20) as a person who occasionally undertakes transactions involving supply of goods or services or both in the course or furtherance of business, whether as principal, agent or in any other capacity, in a State or a Union territory where he has no fixed place of business.
Non Resident taxable person has been defined under section 2 (77) as any person who occasionally undertakes transactions involving supply of goods or services or both, whether as principal or agent or in any other capacity, but who has no fixed place of business or residence in India.
Detailed provisions of section 27 is as under-
As per section 27(1) the certificate of registration issued to a casual taxable person or a non-resident taxable person shall be valid for the period specified in the application for registration or ninety days from the effective date of registration, whichever is earlier.
Casual taxable person shall make taxable supplies only after the issuance of the certificate of registration.
The proper officer may, on sufficient cause being shown by the said taxable person, extend the said period of ninety days by a further period not exceeding ninety days.
As per Rule 15 of GST Rules,
o Where a registered casual taxable person or a non-resident taxable person intends to extend the period of registration indicated in his application of registration, an application in FORM GST REG-11 shall be submitted electronically through the common portal, either directly or through a Facilitation Centre notified by the Commissioner, by such person before the end of the validity of registration granted to him.
The application filed as above shall be acknowledged only on payment of the amount specified in section 27(2).
As per section 27(2) A casual taxable person or a non-resident taxable person shall, at the time of submission of application for registration under sub-section (1) of section 25, make an advance deposit of tax in an amount equivalent to the estimated tax liability of such person for the period for which the registration is sought. As per section 27(3) this deposit will be credited to electronic cash ledger and will be utilized as provided under section 49.
A question arises as to whether the advance deposit of tax is required to be paid equal to 100% of gross tax liability or estimated liability calculated after deducting due eligible ITC which might be available?
Circular No. 71/45/2018-GST dated 20-10-2018 clarifies that the amount of advance tax which a casual taxable person is required to deposit should be computed after deducting due eligible ITC which might be available such taxable person.
Where any extension of time is sought under sub-section (1), such taxable person shall deposit an additional amount of tax equivalent to the estimated tax liability of such person for the period for which the extension is sought.
Detailed procedure for registration for non-resident taxable person is given in Rule 13 of GST rule which is provided as below.
Grant of registration to non-resident taxable person.-A non-resident taxable person shall electronically submit an application, along with a self- attested copy of his valid passport, for registration, duly signed or verified through electronic verification code, in FORM GST REG-09, at least five days prior to the commencement of business at the common portal either directly or through a Facilitation Centre notified by the Commissioner. In the case of a business entity incorporated or established outside India, the application for registration shall be submitted along with its tax identification number or unique number on the basis of which the entity is identified by the Government of that country or its Permanent Account Number, if available.
A person applying for registration as a non-resident taxable person shall be given a temporary reference number by the common portal for making an advance deposit of tax in accordance with the provisions of section 27 and the acknowledgement under sub-rule (5) of rule 8 shall be issued electronically only after the said deposit in his electronic cash ledger.
The provisions of rule 9 and rule 10 relating to the verification and the grant of registration shall, mutatis mutandis, apply to an application submitted under this rule.
The application for registration made by a non-resident taxable person shall be duly signed or verified through electronic verification code by his authorized signatory who shall be a person resident in India having a valid Permanent Account Number.
A question also arise regarding long running exhibitions (for a period more than 180 days). In case of section 27 period of validity of registration shall be 90days plus an extension not exceeding further period of 90days.
Circular No.71/45/2018-GST dated 26/10/2018 clarifies that such long running exhibitions can not be treated as casual taxable person and hence such person is required to obtain registration as normal taxable person. Such person is not required to pay advance tax for the purpose of registration and he can surrender the registration once the exhibition is over.
Amendment to GST Registration Section 28
Provisions of section 28 read with Rule 19 are as under-
There are three types of amendments that can be desired by the taxpayer
Where the change relates to,-
legal name of business;
address of the principal place of business or any additional place(s) of business; or
addition, deletion or retirement of partners or directors, Karta, Managing Committee, Board of Trustees, Chief Executive Officer or equivalent, responsible for the day to day affairs of the business,-which does not warrant cancellation of registration under section 29,
Where the changes relate to fields other than those mentioned above
Where the change in constitution results into change in PAN of the registered person.
In case of (1) above, the proper officer shall, after due verification, approve the amendment within a period of fifteen working days from the date of the receipt of the application in FORM GST REG-14 and issue an order in FORM GST REG-15. This amendment shall take effect from the date of the occurrence of the event warranting such amendment.
In case of (2) above, the certificate of registration shall stand amended upon submission of the application in FORM GST REG- 14 on the common portal.
In case of (3) above, i.e where there is change in PAN, the taxable person shall apply for fresh registration by filing FORM REG-01.
It has also been provided in Rule 19 that
Where the proper officer is of the opinion that the amendment sought is either not warranted or the documents furnished therewith are incomplete or incorrect, he may, within a period of fifteen working days from the date of the receipt of the application in FORM GST REG-14, serve a notice in FORM GST REG-03, requiring the registered person to show cause, within a period of seven working days of the service of the said notice, as to why the application submitted under sub-rule (1) shall not be rejected. Rule 19(2)
The registered person shall furnish a reply to the notice to show cause, issued under sub-rule (2), in FORM GST REG-04, within a period of seven working days from the date of the service of the said notice. Rule 19(3).
Where the reply furnished under sub-rule (3) is found to be not satisfactory or where no reply is furnished in response to the notice issued under sub- rule (2) within the period prescribed in sub-rule (3), the proper officer shall reject the application submitted under sub-rule (1) and pass an order in FORM GST REG -05.Rule 19(4)
If the proper officer fails to take any action,-
within a period of fifteen working days from the date of submission of the application, or
within a period of seven working days from the date of the receipt of the reply to the notice to show cause under sub-rule (3), the certificate of registration shall stand amended to the extent applied for and the amended certificate shall be made available to the registered person on the common portal-Rule 19(5)
Cancellation of Registration Section 29
Cancellation of registration and revocation of the same have been some of the burning issues in GST. Let us understand the provisions contained in section 29 regarding cancellation of registration.
We have also discussed that under section 25(3), there is a provision for voluntary registration. According to this provision, a person can apply for voluntary registration even if he is not liable to get registered under section 22 or section 24. As we have discussed in earlier chapters, in GST taxability is linked with registration. Hence once a person is registered under GST, he needs to collect tax and pay the same to government on all his taxable supplies. In such cases it is important to look at the window for cancellation of registration if the person is no more liable to be registered under section 22 or 24.
Under section 29, cancellation of registration is possible mainly in two ways
When tax payer makes application for cancellation of registration.
By GST officer on his own motion. ( Suo Motu cancellation)
These situations are covered under section 29(1) and section 29(2) of the CGST Act, 2017.
As per section 29(1)
The proper officer may, either on his own motion or on an application filed by the registered person or by his legal heirs, in case of death of such person, cancel the registration, in such manner and within such period as may be prescribed, having regard to the circumstances where,––
the business has been discontinued, transferred fully for any reason including death of the proprietor, amalgamated with other legal entity, demerged or otherwise disposed of; or
there is any change in the constitution of the business; or
the taxable person is no longer liable to be registered under section 22 or section 24 or intends to opt out of the registration voluntarily made under sub- section (3) of section 25 (Amended by section 119 of Finance Act, 2020- Applicable from 1st January, 2021)
The earlier clause (c) was as under-
(c) the taxable person, other than the person registered under sub-section (3) of section 25, isno longer liable to beregistered under section 22 or section 24.
Readers can see from comparison of old and new clause c that in earlier clause if a person has taken voluntary registration under section 25(3) then he cannot apply for cancellation of registration under section 29(1) (c). However, as per amended clause a person who has taken voluntary registration under section 25(3), he can still opt out of registration by applying for cancellation of registration. Hence the problem with the earlier clause of not being able to opt out of the GST registration for a person who has taken voluntary registration under section 25(3) has been resolved This was a much needed amendment. It is applicable from 1st January, 2021.
As we have already discussed in section 28, GST registration number being PAN based, when there is a change in the constitution of an entity and it requires change in PAN, then the original GST registration needs to be cancelled and a fresh registration needs to be applied.
The procedure for cancellation of registration by filing cancellation application has been given under Rule 20 of the GST Rules, 2017.
According to this Rule a registered person seeking cancellation of his registration under sub-section (1) of section 29 shall electronically submit an application in FORM GST REG-16 within a period of thirty days of the occurrence of the event warranting the cancellation. He will have to furnish following details in the cancellation application.
the details of inputs held in stock or inputs contained in semi-finished or finished goods held in stock and of capital goods held in stock on the date from which the cancellation of registration is sought,
liability of GST on the stock,
the details of the payment, if any, made against such liability
Now lets discuss section 29(2)
The proper officer may cancel the registration of a person from such date, including any retrospective date, as he may deem fit, where,––
a registered person has contravened such provisions of the Act or the rules made thereunder as may be prescribed; or
a person paying tax under section 10 has not furnished returns for three consecutive tax periods; or
any registered person, other than a person specified in clause (b), has not furnished returns for a continuous period of six months; or
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
registration has been obtained by means of fraud, wilful misstatement or suppression of facts:
Provided that the proper officer shall not cancel the registration without giving the person an opportunity of being heard.
Readers can observe from section 29(2) that the action of registered person that can result into cancellation of his registration by the proper officer have been mentioned in clause (a) to (e). Here, clause (b) to clause (e) provides for specific situations whereas clause (a) provides that if a registered person has contravened such provisions of the Act or the rules made thereunder as may be prescribed.
Hence, the list can be extended by prescribing the action under Rules. To understand these other actions we need to discuss Rule 21 of the GST Rules, 2017. The list in Rule 21 keeps extending by various notifications.
Rule 21:
The registration granted to a person is liable to be cancelled, if the said person,-
does not conduct any business from the declared place of business; or
issues invoice or bill without supply of goods or services in violation of the provisions of this Act, or the rules made thereunder; or
violates the provisions of section 171 of the Act or the rules made thereunder. (Anti profiteering provisions)
violates the provision of rule 10A (Furnishing of Bank details within forty five days from the grant of registration.)
avails input tax credit in violation of the provisions of section 16 of the Act or the rules made thereunder; or
furnishes the details of outward supplies in FORM GSTR-1 under section 37 for one or more tax periods which is in excess of the outward supplies declared by him in his valid return under section 39 for the said tax periods; or
violates the provision of rule 86B.(payment of at least 1% of tax liability by cash ledger for certain class).
The list given in Rule 21 along with section 29(2), gives powers to GST officer to cancel registration of a person in many cases. Some of the cases like 21(f) are very difficult to comply with and will surely lead to litigations.
Suspension of Registration
Whenever a person applies for cancellation of registration under Rule 20 or the proper officer initiates the cancellation proceedings, there is a time gap between the date of filing application for cancellation/initiation of cancellation proceedings and actual cancellation of registration. In such situation, taxpayers were facing certain problems like what they need to do for supplies made during this period and whether they need to file return for this period or not. To avoid these issues, Rule 21 A was inserted in GST Rules by notification number 49/2019-CT dated 9th October, 2019. This rule provides for suspension of registration pending cancellation. Following are the provisions of this Rule
Where a registered person has applied for cancellation of registration under rule 20, the registration shall be deemed to be suspended from the date of submission of the application or the date from which the cancellation is sought, whichever is later, pending the completion of proceedings for cancellation of registration under rule 22.
Where the proper officer has reasons to believe that the registration of a person is liable to be cancelled under section 29 or under rule 21, he may, suspend the registration of such person with effect from a date to be determined by him, pending the completion of the proceedings for cancellation of registration under rule 22.
A registered person, whose registration has been suspended, shall not make any taxable supply during the period of suspension and shall not be required to furnish any return under section 39.
As can be inferred from the above provisions, the suspension of registration is done pending the cancellation proceedings under Rule 22. Also a registered person whose registration is suspended need not file any return under section 39. Though after cancellation of his registration he needs to file a final return under section 45 of the CGST Act, 2017 within three months from the date of cancellation or date of order of cancellation whichever is later.
Readers also need to understand that once registration is suspended a person cannot make taxable supplies. It means the registered person shall not issue a tax invoice and, accordingly, not charge tax on supplies made by him during the period of suspension.
By notification 94/2020 dated 22nd December, 2020, following additional provisions are inserted to Rule 21A
Where, a comparison of the returns furnished by a registered person under section 39 with
the details of outward supplies furnished in FORM GSTR-1; or
the details of inward supplies derived based on the details of outward supplies furnished by his suppliers in their FORM GSTR-1, or such other analysis, as may be carried out on the recommendations of the Council, show that there are significant differences or anomalies indicating contravention of the provisions of the Act or the rules made thereunder, leading to cancellation of registration of the said person, his registration shall be suspended and the said person shall be intimated in FORM GST REG-31, electronically, on the common portal, or by sending a communication to his e-mail address provided at the time of registration or as amended from time to time, highlighting the said differences and anomalies and asking him to explain, within a period of thirty days, as to why his registration shall not be cancelled.
This seems to be an additional safeguard to protect interest of revenue from fraudulent devices used by some elements. As per this provision, if the analysis carried out by the GST department shows significant differences or anomalies which indicates contravention of law then the registration of a person may be suspended.
It has also been provided by the same notification that if registration is suspended, a person cannot be granted refund under section 54 and he can also not generate E way bill.
Some other provisions for cancellation of registration
We have understood section 29 (1) and section 29 (2) with Rule 20 to Rule 22 regarding cancellation of registration. Some other provisions are provided under section 29(3) to section 29(6) which are as under:
The cancellation of registration under this section shall not affect the liability of the person to pay tax and other dues. It is important to understand that cancellation of GST registration shall not relieve a person from his GST liability existing prior to the date of cancellation. GST officer can determine GST liability of a person under section 73 or 74 even after cancellation of registration.
There also arise a question about the input tax credit taken by a person whose GST number gets cancelled. If a person has, at the time of cancellation of registration, any input in stock or capital goods or plant and machinery on which he has taken input tax credit then he has to pay this amount back to GST authorities. As per section 29(5),
Every registered person whose registration is cancelled shall pay an amount, by way of debit in the electronic credit ledger or electronic cash ledger, equivalent to the credit of input tax in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock or capital goods or plant and machinery on the day immediately preceding the date of such cancellation or the output tax payable on such goods, whichever is higher, calculated in such manner as may be prescribed:
Provided that in case of capital goods or plant and machinery, the taxable person shall pay an amount equal to the input tax credit taken on the said capital goods or plant and machinery, reduced by such percentage points as may be prescribed or the tax on the transaction value of such capital goods or plant and machinery under section 15, whichever is higher.
This manner has been prescribed under Rule 44 of the GST Rules that we have already discussed in the chapter of Input Tax Credit.
Some Recent changes to suspension and cancellation provisions
Notification no 94/2020 dated 22nd December 2020 has made some significant changes cancellation of registration rules and procedures which readers can note.
Rule 21 provides for certain situations in which registration of a person is liable to be cancelled. List of these situation has been expanded here.
Give this collapsible section a title
avails input tax credit in violation of the provisions of section16 of the act or the rules made there under or
furnishes the details of outward supplies in FORM GSTR-1 under section -37 for one or more tax periods which is in excess of the outward supplies declared by him in his valid return under section 39 for the said tax periods; or
Violates the provisions of rule 86B.
Hence in above situations also registration shall be liable to be cancelled. Here, the most debatable change is insertion of clause (f) which provides that it volume of supply in GSTR -1 is higher than value of supply in GSTR- 3B then registration is liable to be cancelled.
Similar changes are made in Rule 21A which provides for suspension of registration pending the proceedings of cancellation. Here also it is mentioned that when there are significant differences between GSTR-1 and GSTR-3B, registration shall be suspended. Further, the comparison will also be made with ITC in GSTR-3B with that of supplies shown in GSTR-1 of suppliers.
It is also mentioned that there is no need to provide an opportunity of being heard before suspension of registration.
It has also been mentioned that if GST number is suspended, refund under section 54 cannot be granted.
(2). Two clauses of section 29 (2) are proposed to be amended by Finance Bill 2022
Section 29(2) provides for cancellation of GST registration of a person by a GST officer in certain situations. The amendments are proposed in clause (b) and ( c ) of section 29(2) which are as under-
In clause (b) it was provided that the registration of a person paying tax under section 10 (composition taxpayer) shall be liable to be cancelled if he has not furnished return for three consecutive tax periods. This clause is amended and it is now provided that for a person paying tax under section 10 shall be liable to be cancelled if he has not furnished return for a financial year beyond three months from the due date of furnishing the said return.
In clause (c) earlier it was provided registration of the persons other than composition taxpayers shall be liable to be cancelled if he has not furnished return for a consecutive period of six months. This provision has been amended and now it has been provided that registration of such person shall be liable to be cancelled if return is not filed for such continuous tax period as may be prescribed.
Readers can note that the powers to determine the period of default for cancellation of registration has been delegated to government through this amendment.
Revocation of cancellation of registration under section 30
If registration of a person is cancelled by GST officer on his own motion, he can apply for revocation of cancellation of registration to the officer within 30 days from the date of communication of order of cancellation.
As per amendment to section 30 made by Finance Act, 2020, this period of 30 days can be extended by additional or Joint commissioner by another 30 days and commissioner by further period of 30 days. Hence total time limit available to a person for filing revocation application from the date of communication of order of cancellation of registration shall be 90 days.
It has also been provided that the application for revocation of cancellation shall not be rejected without giving an opportunity of being heard to the applicant.
Rule 23 provides for revocation of cancellation of registration as under-
A registered person, whose registration is cancelled by the proper officer on his own motion, may submit an application for revocation of cancellation of registration, in FORM GST REG-21, to such proper officer, within a period of thirty days from the date of the service of the order of cancellation of registration.
There is an amendment made to this sub rule by notification 15/2021 dated 15th May, 2021 as under:
The application under sub rule (1) may also be filed within such time period as extended by the Additional Commissioner or the Joint Commissioner or the Commissioner, as the case may be, in exercise of the powers provided under the proviso to sub-section (1) of section 30.
This amendment is a kind of correction in the rule. Rule 23 is about application for revocation of cancellation of registration. Readers are aware that section 30 deals with revocation of cancellation of registration when registration of a person is cancelled under section 29 of the GST Act. As per section 30, the application for revocation of cancellation needs to made within 30 days from the date of service of order of cancellation. Two new proviso were added to this section by Finance Act, 2020 (effective from 1st January, 2021) which are as under
such period may, on sufficient cause being shown, and for reasons to be recorded in writing, be extended,––
by the Additional Commissioner or the Joint Commissioner, as the case may be, for a period not exceeding thirty days;
by the Commissioner, for a further period not exceeding thirty days, beyond the period specified in clause (a).
However, effect of this amendment to section 30 was pending to be given in Rule 23. Hence by notification 15/2021 dated 18th May, 2021, this effect has also been given to rule 23.
Consequential amendment has also been made to instructions for filing FORM REG-21[application for revocation of cancellation of GST registration mentioning new proviso to section 30(1)].
Condition of filing of returns and payment of government dues Proviso to sub rule 1 of rule 23 provides as under-
Provided that no application for revocation shall be filed, if the registration has been cancelled for the failure of the registered person to furnish returns, unless such returns are furnished and any amount due as tax, in terms of such returns, has been paid along with any amount payable towards interest, penalty and late fee in respect of the said returns
Provided further that all returns due for the period from the date of the order of cancellation of registration till the date of the order of revocation of cancellation of registration shall be furnished by the said person within a period of thirty days from the date of order of revocation of cancellation of registration.
Provided also that where the registration has been cancelled with retrospective effect, the registered person shall furnish all returns relating to period from the effective date of cancellation of registration till the date of order of revocation of cancellation of registration within a period of thirty days from the date of order of revocation of cancellation of registration.
Readers can see from the above provision that if the returns are not filed and tax, interest and penalty pending to be paid have been paid, the revocation application cannot be filed. There was a technical difficulty in application of this condition that sometimes the registration is cancelled from retrospective date and portal does not allow a person to file returns for past period if registration has been cancelled. To avoid this difficulty, it is provided that such returns can be filed within 30 days from the date of order of revocation of cancellation of registration.
Where the proper officer is satisfied, for reasons to be recorded in writing, that there are sufficient grounds for revocation of cancellation of registration, he shall revoke the cancellation of registration by an order in FORM GST REG-22 within a period of thirty days from the date of the receipt of the application and communicate the same to the applicant.
The proper officer may, for reasons to be recorded in writing, under circumstances other than those specified in clause (a), by an order in FORM GST REG-05, reject the application for revocation of cancellation of registration and communicate the same to the applicant.
The proper officer shall, before passing the order referred to in clause (b) of sub- rule (2), issue a notice in FORM GST REG–23 requiring the applicant to show cause as to why the application submitted for revocation should not be rejected and the applicant shall furnish the reply within a period of seven working days from the date of the service of the notice in FORM GST REG-24.
Upon receipt of the information or clarification in FORM GST REG-24, the proper officer shall proceed to dispose of the application within a proper officer shall proceed to dispose of the application within a period of thirty days from the date of the receipt of such information or clarification from the applicant.
Notes :
As per notification 34/2021 dated 29th August, 2021, In case the registration has been cancelled due to non filing of returns and the due date of filing revocation application falls due between 1st March, 2020 to 31st August, 2021 then the same is extended till 30th September, 2021.
As provided by notification 35/2021 dated 29th August, 2021, New
Rule 10B inserted which provides for compulsory Aadhar authentication for application of revocation of cancellation of registration as well as filing of refund application.
Important Judicial view on revocation of cancellation of registration
Is it appropriate to deny renovation of cancellation of registration saying that the taxpayer has wrongly availed ITC?
Cancellation of registration is governed by section 29 of the CGST Act, 2017 and applicable rules made there under namely rule 21, 21A and rule 22. As per these rules there are number of reasons due to which registration of a person can be canceled by GST officer. The main reason of cancellation of registration in most of the cases is non-filing of GST returns. Once GST registration is cancelled, a person has option to apply for revocation of cancellation of registration under section 30 read with Rule 23. Section 30 has been reproduced below-
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.
A new proviso has been inserted to this section by GST Amendment Act, 2020 which is as under-
such period may, on sufficient cause being shown, and for reasons to be recorded in writing, be extended––
by the Additional Commissioner or the Joint Commissioner, as the case may be, for a period not exceeding thirty days
by the Commissioner, for a further period not exceeding thirty days, beyond the period specified in clause (a).”
Hence effectively, the revocation application under section 30 can be filed within 90 days (30 days originals plus 30 days extension by additional/joint commissioner plus another 30 days extension by commissioner.) from the date of service of cancellation order.
Corresponding amendment has also been made in Rule 23 regarding extension of time to file revocation application under section 30.
A question arises as to what are the things the GST officer needs a to look into or rather we can say he is authorised to look into while approving/rejecting revocation application? This question can be answered with the help of analysis of Rule 23.
As per proviso to Rule 23(1),
no application for revocation shall be filed, if the registration has been cancelled for the failure of the registered person to furnish returns, unless such returns are furnished and any amount due as tax, in terms of such returns, has been paid along with any amount payable towards interest, penalty and late fee in respect of the said returns.
In a recent case of 2021 (5) TMI 167 - MADRAS HIGH COURT, RAMAKRISHNAN MAHALINGAM VERSUS STATE TAX OFFICER (CIRCLE) , GOODS AND SERVICE TAX OFFICER, KOTAGIRI., DEPUTY
COMMISSIONER (ST), honourable Madras High Court has held that the only thing that the proper officer needs to look into at the time of entertaining revocation application is whether the tax dues are paid and returns are filed or not. The verification of claim of input tax credit is outside the scope of Rule 23.
Observation of the court in this case is as under-
The contention of the respondents herein that the revival of registration is conditional upon the petitioner satisfying tax dues and substantiating its claim of ITC, is misconceived. What is sought for by the petitioner is revocation/revival of registration only, and in the guise of considering the application for revocation, the authorities cannot embark upon the process of assessment - An assessment would have to be made by the authority in terms of Section 73 or other applicable provision after following the procedure set out therein, and it is only in the course thereof that the officer may consider and decide questions of leviability of tax and claim of input tax credit.
Thus to state that registration will not be revived since the petitioner has incorrectly availed of ITC would be putting the cart before the horse. In fact, it is seen that the petitioner has filed monthly returns as well as annual returns for the periods January 2017-18 to September 2019-20 and for financial years 2017-18 and 2018-19 and has also remitted late fee for filing of belated returns. Thus, and these being the only conditions that are to be satisfied by the petitioner for grant of revocation of registration, the cancellation of the registration in this case is incorrect and improper.
This judgment lays down a very clear principle that the officer cannot go beyond verification of payment of government dues and filing of returns under Rule 23. The verification of claim of ITC is not within the scope of Rule 23 and it amounts to assessment for which separate provisions exist in law. Hence, once the officer is satisfied that the tax dues, interest and applicable penalty are paid and all pending returns are filed, the cancellation of registration should be revoked.