New GST Registration after Cancellation

GST officers have been bestowed upon with the powers, vide section 29 (2) of the Central Goods and Service Tax Act, 2017, to cancel GST registration of a concerned person on account of non-compliance of the statutory provisions / non-filing of GST returns. Such person whose registration has been cancelled by the proper officer, on account of non-compliance of the statutory provisions, if wants to continue his business, is required to apply for revocation of cancellation of the registration. In case new GST registration after cancellation of GST registration on account of non-compliance of the statutory provisions and applying for revocation thereon, the registered person applying for revocation would be required to pay all the pending tax liabilities.

However, in order to avoid payment of pending tax liabilities, it has been noted by the Government that cases wherein the GST registration has been cancelled by the proper officer, on account of non-compliance of the statutory provisions, the concerned registered person, instead of applying for revocation of cancellation of registration is applying for fresh registration under GST.

Vide circular no. 95/14/2019-GST dated 28^th March, 2019, the Central Board of Indirect Taxes and Customs has clarified the consequence the tax payer has to face in case of non-revocation of cancelled registration and applying for new registration which is being summarized in the present article.

New Process

In order to protect revenue due to modus operandi adopted by the tax payer, as mentioned above, proper officer would exercise extra caution while processing of the application for the tax payer opting for another registration within the same State, however, the tax payer already has an existing registration within the same State or the registration of the tax payer has been cancelled.

Vetting of New Registration Application

If the tax payer already having one registration, applies for another registration within the same state, the proper officer would undertake the following analysis –

• Whether existing registration continues or is being cancelled;
• If the existing registration is cancelled, then it would be analyzed whether the registration is cancelled on account of violation of provisions of section 29 (2) (b) [composition dealer has not furnished returns for 3 consecutive tax period] or section 29 (2) (c) [registered tax payer has not furnished returns for a continuous period of 6 months];
• If the registration is cancelled, whether the tax payer has opted / filed application for revocation of cancellation of registration.

Consequences of Not Applying for Revocation

In case there is a cancellation of registration and the tax payer has not applied for revocation of cancellation of registration and conditions specified in section 29 (2) (b) [composition dealer has not furnished returns for 3 consecutive tax period] or section 29 (2) (c) [registered tax payer has not furnished returns for a continuous period of 6 months] still continues, then, it shall be deemed to be a ‘deficiency’ within the meaning of rule 9 (2) of the Central Goods and Service Tax Rules, 2017 and the proper may consider the same as a ground for rejection of application for fresh registration.

Thus, in the coming days, taxpayers who have not complied with GST return filing regulations will find it extremely hard to obtain GST registration again. 

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