The Central Board of Indirect Taxes and Customs (CBIC) notified the Guidelines regarding cancellation of Registration under Rule 22 (3) of CGST Rules, 2017.
Rule 22 (3) of CGST Rules, 2017 specifies the procedure to be followed for processing of application filed by taxpayers for cancellation of registration wherein it says that the proper officer is required to issue an order in FORM GST REG-19 in respect of the application for cancellation of registration filed by the taxpayer within a period of thirty days from the date of the application submitted by the taxpayer and direct him to pay arrears of any tax, interest or penalty including the amount liable to be paid under subsection (5) of section 29.
In order to provide clarification on various issues in relation to the processing of the 3 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 across the field formations, the Board issued a Circular clarifying the details in respect of the procedure to be followed in relation to the processing of the applications for cancellation of registration filed by taxpayers.
Since the cancellation of registration has no effect on the liability of the taxpayer for any acts of commission/omission committed before or after the date of cancellation, the proper officer should accept all such applications within a period of 30 days from the date of filing the application, except in the two circumstances.
Firstly, 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.
Secondly, 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.
In such circumstances the application for cancellation of registration should be immediately accepted by the proper officer and the order for cancellation should be issued in FORM GST REG-19 with the effective date of cancellation being the same as the date from which the applicant has sought cancellation in FORM GST REG-16. In any case the effective date cannot be a date earlier to the date of application for the same.
However, the Board said that the office of C&AG during the course of the audit, has observed that in a large number of cases, the applications for cancellation of GST registration were not disposed of 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.
“Considering that the legal provision stipulates passing of the order in respect of the application of cancellation of registration within 30 days of the date of the application, and also as it has already been clarified vide Circular No. 69/43/2018-GST dated 26.10.2018 that cancellation of registration has no effect on the liability of the taxpayer for any Acts of commission/omission committed before or after the date of cancellation, the proper officer should act as per prescribed legal process within the stipulated time in order to avoid any delay,” the CBIC notified.
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