Non-filing the GSTR May Revoke Your GST Registration!

Dealers May Loose GST Registration

The Central Board of Indirect Taxes and Customs (CBIC) is contemplating on taking stringent actions against the non-filers which may also lead to cancellation of registration by Goods & Services Tax (GST) officials. Besides, the procession made in this context will also be updated daily as decided by the GST department.

Tax officials figure out the amount of tax that should have been collected and the amount of tax actually collected by tax officials, with the help of returns filed by taxpayers. When taxpayers do not file returns, it becomes difficult for tax authorities to estimate the tax collection. As a matter of fact, 20% of assessees do not file GST returns which disturbs the tax collection.

In a meeting held on November 13 by the Central Board of Indirect Taxes & Customs (CBIC) with the Principal Chief Commissioner and Commissioner of GST & Customs, PK Dash, chairman of CBIC, hinted his disagreement on the decision regarding cancellation of non-filers’ registration on not filing the Form GSTR 3B for 6 months and more.

“…the task of cancellation of registration of such non-filers of GST returns should be taken on priority basis and should be furnished by November 25,” is a part of communication from the office of the Principal Chief Commissioner of GST & Central Excise, Mumbai to Principal Commissioner/Commissioner. The same communication was posted in the jurisdiction. 

Under the GST regime, its mandatory for a registered person to file returns. A normal supplier has to file monthly returns and supplier under composition scheme has to file quarterly returns. 

Similarly, an ISD (Input Service Distributor) has to file monthly returns to report details of credit distributed in the specific month and a TDS deductor & a TCS collector has to file monthly returns to furnish details about TDS & TCS, respectively, in a particular relevant month. 

Conditions and events that lead to cancellation of registration are mentioned in Section 29 of the Central Goods & Services Tax (CGST) Act. These conditions include violation of Act’s  provisions, non-commencement of business within six months time from the voluntary registration, returns not filed by a taxpayer registered under GST composition scheme for three successive tax periods or by a non-composition assessee for a continuous six months and registration acquirement through the means of fraud, facts suppression or willful misstatement. It has been clearly stated in the provision that cancellation of registration can not take place without providing a chance of being heard to the person. 

Notably, the cancellation of registration will not cancel any kind of tax liability or any other dues. Non-filers whose registration gets cancelled will have to pay an amount, by debiting the same in the electronic credit ledger or electronic cash ledger. The amount shall be equal to the credit of input tax w.r.t inputs available in stock and inputs present in semi-finished or finished goods available in stock/ capital goods/ plant and machinery on the date just next to the date on which such cancellation took place or the output tax-liability payable on such products, whichever is higher.