Guidelines Issued by CBIC for GST Officers Regarding Cancellation of Registration

Rule 22 (3) of CGST Rules, 2017:

Where a person who has submitted an application for cancellation of his registration in FORM GST REG-16 is no longer liable to be registered or his registration is liable to be cancelled, the proper officer shall issue an order in FORM GST REG-19, within a period of thirty days from the date of application submitted: and notify the taxable person, directing him to pay arrears of any tax, interest or penalty including the amount liable to be paid under sub-section (5) of section 29″.

Reasons for which guidelines were issued:

C&AG during the course of audit, has observed that in a large number of cases, the applications for cancellation of GST registration were not disposed off by tax officers within 30 days, as prescribed under Rules 22 (3) of CGST Rules 2017. It has also been observed that in some cases, the cancellation applications were found pending even after more than 120 days.

Guidelines issued:

In order to provide clarification on various issues in relation to processing of the applications for cancellation of registration filed by taxpayers in FORM GST REG-16 and to ensure uniformity in the implementation of the provisions of law,

The Board issued Circular No. 69/43/2018-GST dated 26-10-2018. The said circular clarified in detail the procedure to be followed in relation to processing of the applications for cancellation of registration filed by taxpayers. Para 5 of the said Circular is reproduced below:

“The proper officer should accept all such applications within a period of 30 days from the date of filing the application, except in the following circumstances”:

  1. The application in FORM GST REG-16 is incomplete, i.e., where all the relevant particulars, as detailed in para 4 above, have not been entered.
  • In case of transfer, merger or amalgamation of business, the new entity in which the applicant proposes to amalgamate, or merge has not got registered with the tax authority before submission of the application for cancellation.

Conclusion:

Cancellation order is strictly needs to be issued within a period of 30 days from the date of the application.

Source: CIRCULAR NO. CBEC-20/16/34/2019/GST/802

Circular dated: 24/05/2021

Hrithik Sachdeva, Article Assistant

 ShineWing India