Honourable Finance Minister, Nirmala Sitharaman, stated during the Budget 2021 presentation that, "we do not need to increase the Income Tax Rates and/or GST rates but a strict implementation of the current law would yield healthy collection of taxes". This article explaining the new provision to suspend GST Registration in case of certain anomalies.
With the new direction from the Budget 2021, Central Board of Indirect Taxes and Customs (CBIC) has issued a new Circular No. 145/01/2021-GST on Feb 11th, 2021, to all the GST commissioners in India, to include a new provision that states ... "immediate suspension of GST registration of a person, as a measure to safeguard the interest of revenue on violation of Act and Rules"
A strict implementation of the current law would yield healthy collection of taxes
This document covers
The GST Registration Suspension rules states that an immediate suspension of GST registration of a person, as a measure to safeguard the interest of revenue on violation of Act and Rules
Further the rules states the violations / anomalies, where, a comparison of the returns furnished by a registered person under section 39 with
While the data collection frequency to notice such an anomaly is unknown but can be safely assumed to be a Quarter as that is the maximum duration with which most GST taxpayers file their return.
The rules of the provision haven't identified any specific list of types of GST registrations, but the rule might be confined to GST Registrations who deal with Products but may not be Services.
Refer #1 above on the cause and reasons to suspend GST under this provision.
The GST registration shall be suspended, and the said taxpayer shall be intimated in following ways by highlighting the said differences and anomalies and asking them to explain, within a period of thirty days (30 days), as to why their registration shall not be cancelled.
The taxpayers who get notice of suspension of GST need to follow
After the issuance of the intimation, the taxpayer would be required to furnish a reply to the jurisdictional tax officer within thirty days (30 days) from the receipt of such notice / intimation, explaining the discrepancies / anomalies, if any, and shall furnish the details of compliances made or / and the reasons as to why their registration should not be cancelled.
The said person would be required to reply to the jurisdictional officer against the notice for cancellation of registration sent to them, in FORM GST REG-18 online through GST Portal within the time limit of thirty days (30 days) from the receipt of notice / intimation.
In case the intimation for suspension and notice for cancellation of registration is issued on ground of non-filing of returns
There are many practical problems in the field to interpret the differences between inward and outward supplies .. our understanding and interpretation made us believe that the below are a concern.