Home GST GSTIN Cancellation Process Will be Applied If Not Filed GSTR-3B for a Continuous 6 Months

GSTIN Cancellation Process Will be Applied If Not Filed GSTR-3B for a Continuous 6 Months

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GSTIN Cancellation Process Will be Applied If Not Filed GSTR-3B for a Continuous 6 Months

Within the latest case of M/s. Sanscorp India Pvt. Ltd. vs. the Assistant Commissioner, Items and Service Tax Community (GSTN), Union of India – 2023(9) TMI 1002, the Kerala Excessive Courtroom made a big ruling. The court docket held that if a taxpayer fails to submit returns for a steady interval of six months, their registration will be cancelled, and they are going to be topic to curiosity expenses for any delayed funds.

Key Particulars of The Case

The petitioner, M/s Sanscorp India Pvt. Ltd., is a registered vendor underneath the Central Items and Providers Tax Act, 2017. The Petitioner did not submit returns in GSTR 3B From April 2022 to December 2022.

Consequently, the respondent, the Income Division, issued a Present Trigger Discover to the petitioner, searching for an inexpensive reply as to why their GST registration shouldn’t be cancelled because of the failure to file returns for a steady six-month interval.

Below Part 29 of the CGST Act, 2017, if a vendor doesn’t file returns repeatedly for six months, their registration is liable to get cancelled by the authority.

The Adjudicating Authority, by means of the impugned order dated March 4, 2023, retrospectively cancelled the petitioner’s GST Registration from January 15, 2023.

After the cancellation of registration, the petitioner filed GSTR 3B on July 24, 2023, and paid the tax together with curiosity. They argued that the GST software program was not aligned with the CGST Act and Guidelines.

The petitioner additional contended that in the event that they paid the GST quantity and curiosity, they shouldn’t be thought-about a defaulter for not submitting the return. Subsequently, they argued that the cancellation of the registration needs to be deemed invalid and the order restoring the registration needs to be reinstated.

In response to the impugned order, the petitioner filed a writ earlier than the Kerala Excessive Courtroom, searching for the restoration of the cancelled registration.

Challenge About Items and Service Tax

The principle situation earlier than the court docket was whether or not the Income Division may retrospectively cancel GST registration if the assesses did not file GSTR 3B for a number of years.

Kerala Excessive Courtroom Ruling

The Kerala Excessive Courtroom, within the case of M/s Sanscorp India Pvt. Ltd. vs. the Assistant Commissioner, Items and Service Tax Community (GSTN), Union of India- 2023 (9) TMI 1002, held the next:

The court docket noticed that their registration will be cancelled if a petitioner fails to file returns repeatedly for six months. The provisions of Part 50 or Part 29 of the Central Items and Providers Tax Act don’t battle with one another.

The court docket opined that the provisions for cancellation of registration and fee of tax with curiosity are distinct and serve completely different functions, scopes, and intents.

The court docket famous that the petitioner had an alternate resolution accessible underneath the CGST Act and Guidelines, which they need to have pursued throughout the given time restrict.

The court docket additional famous that the explanations can’t be thought-about that the Items and Providers Tax Portal is non-functional, as the whole nation information returns and pays taxes utilizing the identical software program.

The court docket dominated that if the petitioner fails to submit the total or partial GST quantity, the Adjudicating Authority can cancel their GST registration. Furthermore, any delayed funds will incur curiosity expenses.

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