Cancellation of registration under Rule 22 of the CGST Rules aligned with newly inserted sub-rule (2A) of Rule 21A
The Central Board of Indirect Taxes and customs through its notification, dated December 22, 2020, has issued CGST Rules ( Fourteenth Amendment), among other things, amending Rule 22 of the CGST Rules, 2017, regarding the cancellation of registration in the following way:
- Rule 22(3) – Inserted the words – ‘’ or under subrule (2A) of rule 21 A ‘’after the words, brackets, and figure the show cause issued under sub-rule(1)’’.
Thus, now the registration shall be canceled and issue an order by the designated tax officer, within a period of 30 days from the date of reply to show cause notice issued under new subrule (2A), that is in cases where comparison of returns (GSTR 3B and GSTR 1) provided by a registered taxpayer shows the glaring irregularities showing in violation of the provisions of the CGST Act,2017 or the Rules made under it.
- Rule 22(4)- inserted the words ‘’or in response to the notice issued under sub-rule (2A)’’ after the words, brackets, and figure ‘’reply furnished under sub-rule(2). At present, the appropriate officer would drop the proceedings of cancellation of registration and give an order in GST FORM REG-20 on being fine with the response to the show-cause notice given as per newly inserted sub-rule(2A) of Rule 21A of the CGST Rules.
It is to be noted that the above modifications are done to only align Rule 22 of the CGST Rules with the newly inserted Rule 21A(2A).
Modified rule 22 of the CGST Rules, now reads as under with effect from December 22, 2020: 22. Cancellation of registration:
- Where the designated tax official understands that the registration is liable to be canceled as per section 29, he shall issue a notice to that concerned person in FORM GST REG-17, asking him to show cause, within seven working days from the date of the given notice, as to why should they proceed with the cancellation of registration.
- The response to the show-cause notice given under sub-rule(1) shall be given in FORM REG-18 within the specified period in the sub-rule.
- Where a taxpayer who has submitted an application for cancellation of his registration is not liable to be registered or his registration is liable to be canceled, the appropriate tax official would issue an order in FORM GDT REG-19, within a period of 30 DAYS from the application date submitted as per sub-rule (1) of rule 20 or, as the case may be, the date of the reply to the show cause issued under sub-rule (1) or under sub-rule (2A) of rule 21A, cancel the registration, with effect from a date to be ascertained by him 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.
- Where the reply furnished under sub-rule (2) or in reply to the notice issued as per sub-rule (2A) of rule 21A is found to be satisfactory, the appropriate tax officer shall drop the proceedings and pass an order in FORM GST REG –20. Provided that where the person in place of replying to the notice served under sub-rule (1) in violation of the provisions contained in clause (b) or clause (c) of sub-section (2) of section 29, provides all the pending returns and makes full payment of the tax dues in addition to applicable interest and late fee, the proper officer shall drop the proceedings and pass an order in FORM GST-REG 20.
- The provisions of sub-rule (3) shall, mutatis mutandis, apply to the legal heirs of a deceased proprietor, as if the application had been forwarded by the proprietor himself.”