GST Portal Glitch Bars Eligible Dealers From Filing REG-32 Despite Mandatory Lock-In Completion Under Rule 14A
The GST rules allow withdrawal, but the GST portal’s technical error is blocking it
Many GST dealers who have completed the required lock‑in period and filed all their returns are still unable to apply for withdrawal under Rule 14A using FORM GST REG‑32. The GST portal is showing errors because of a technical glitch, blocking taxpayers who are otherwise fully eligible.
As a result, they cannot exit the automatic registration option and are stuck with compliance risks, including being unable to report outward liabilities above ₹2.5 lakh until a withdrawal order is officially issued.
Rule 14A deals with automatic GST registration. Dealers who are registered under this rule sometimes want to withdraw from it. So it means they no longer want to continue under this automatic registration option. To do this, they must file a specific form, which is FORM GST REG-32.
There are conditions for withdrawal, such as :
- If applying before 1 April 2026 - must file returns for at least 3 months.
- If applying on or after 1 April 2026, must file returns for at least 1 tax period.
- Plus, all pending returns from the date of registration till withdrawal must be filed.
If the tax department has already started cancellation proceedings under Section 29, you cannot apply for withdrawal, and also if any details in your registration (FORM GST REG-01) have changed, you must update them under Rule 19 before applying.
Even when the dealers meet all these conditions, such as returns filed, lock-in period completed, and liability > ₹2.5 lakh, the GST portal is not allowing them to file REG-32.
The portal shows a warning message saying: “You are not allowed to file Application for Withdrawal from registration under rule 14A as all the due returns or minimum number of returns required as per GST Rules has not been filed.”
Even after withdrawal is approved, dealers can only show outward liability greater than ₹2.5 lakh from the month after the withdrawal order is issued.
So it's clear that the issue is technical, and a lot of legally eligible dealers were facing serious compliance consequences despite fulfilling all statutory conditions for withdrawal.
