The suspension of your Goods and Services Tax (GST) number can make it difficult for your business to run. In 2023, 4,900 fake GST registrations were canceled.
When a business is in GST Suspension, its GST registration is temporarily put on hold. The company can’t charge GST on its sales, send tax bills, or collect input tax credits during this time.
The CBIC says that as of 2021, noncompliance led to nearly 12 lakh gstin / uin status suspended. It shows the importance of filing your GST returns on time and following the rules. This blog will go into depth about the GST suspended status and how to get it back up and running.
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Reasons for GST Suspension
The GST authority can stop your GST registration for several reasons, including:
- Non-Filing: Most of the time, people don’t file their tax forms, therefore, many businesses get their GST suspended due to non filing. Here is the list of GST Suvidha Kendra for all GST related services.
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- Returns That Do Not Match: If there is a big difference between the information in GSTR-1 and GSTR-3B.
- On Request: Businesses can ask for their GST number to be temporarily suspended if they want to.
- Wrong Use of the Input Tax Credit: If a business claims invalid or fake input tax credits, the GST authority can take away its license.
Also Read:- A DIY Guide to Get Your Business License in India
- Not Following the Rules for E-Way Bills: To avoid GST suspension, people must follow the rules for e-way bills, which include creating and keeping the necessary paperwork for moving goods.
- Not Having Paid GST Dues: Businesses can lose their GST registration until they pay their dues if they don’t pay within the due date.
Effects of GST Suspension
Having your GST number blocked significantly affects how your business runs.
- The first thing you can’t do is make taxable goods. It stops you from adequately running your business under GST rules.
- On top of that, you can’t charge customers GST. It will change how you handle your cash flow and set prices. Also read significance of Cash Flow Statement.
- Another significant effect is that you can’t use the Input Tax Credit (ITC) on purchases, which increases your costs.
- This suspension can also hurt the reputation of your business and the way you work with customers and providers.
- Having a blocked GST number makes it harder to plan your finances, stay in line, and run your business efficiently.
How To Activate Suspended GST Number?
If your GST was suspended due to non-filing, these are the steps on how to activate the suspended GST number online :
Step 1: Log in to the GST Portal
- Go to the GST portal: Visit the GST Portal and sign in your account.
- Sign in: To sign in to your account, enter your username and password.
Step 2: File Pending Returns
- Click on the “Services” tab. Choose “File Returns” from the “Returns” menu.
- Pick out the correct period. Pick the tax year for which you need to file a report.
- Fill out and send in the tax forms for the chosen period. If you file late, you might have to pay a fee and interest.
Step 3: Application for Revocation
- Click on “Services”. Select “Registration” from the list of “Services” and then “Application for Revocation of Suspension.”
- Fill out the form with the necessary information.
- Include the required paperwork, like proof that you paid your taxes.
- Look over the application and then submit it.
Step 4: GST Officer Review
- A GST officer will look over the application.
- Send quick responses to the notices asking for more information.
Letter Format To Activate Suspended GST Registration
Your application for revocation of the suspension of GST registration may need an official letter. Take a look at the GST suspended how to activate letter format below:
[Your Name]
[Your Business Name]
[GSTIN]
[Address]
[Date]
To,
The GST Officer,
[Jurisdiction Office]
Subject: Application for Revocation of Suspension of GST Registration
Dear Sir/Madam,
I, [Your Name], proprietor of [Business Name], request the revocation of the suspension of my GST Registration bearing GSTIN [Your GSTIN]. The suspension was due to the non-filing of returns for the period [period].
I have now filed all the pending returns and cleared all dues. Kindly reinstate my GST registration.
Thank you.
Yours sincerely,
[Your Name]
Ensuring you meet all legal requirements is part of restoring a suspended GST number. The above steps should be enough to finish the primary process. Also, checking your GST filings daily can help you avoid future bans.
Takeaway
Reactivating a suspended GST number is an organized process that needs to be quick and in accordance with GST rules. If you know how to revoke GST suspended status, your business will continue to operate and be legal.
The process of how to revoke suspended GST can be complex to understand. But businesses can get their GST number back and keep running smoothly if they work hard. Therefore, follow the necessary steps to get back your suspended GST registration.
FAQs
- What should I do if the government takes away my GST number?
Use the official GST site to file all outstanding forms and ask for revocation of suspended GST registration. Ensure you’ve met all the standards to get your GST number back.
- When does a GST number become active again?
It usually takes between 15 and 30 days to reactivate. Your answer will depend on how quickly you file your forms and how the GST officer reviews them.
- If my GST number is blocked, can I still do business?
You can’t make taxable sales or collect GST while your GST number is suspended. Therefore, it’s important to take the necessary steps to start the business immediately.
- Who is eligible to use the ‘Initiate drop proceedings’ facility?
Tax officers can use the “Initiate drop proceedings” feature under GST. Depending on certain conditions, they can use it to drop the case against a taxpayer.
- What is the new GST Registration Suspension rule?
Suppose differences exist between a taxpayer’s outward supplies (GSTR-1) and inward supplies (GSTR-2B). In that case, the new GST Registration Suspension rule in India, which goes into effect in July 2024, lets the government stop GST registration. Suspensions are sent out on Form REG-31, and the user has 30 days to explain what’s wrong, or their registration could be canceled.
How to activate cancelled GST registration after 2 year?
To activate a cancelled GST number after two years, you need to file an application for revocation of cancellation within 30 days of the cancellation order. Since more than two years have passed, you must contact your jurisdictional GST officer for guidance. They may require you to file returns and pay any pending dues. If necessary, you might also need to approach the appellate authority for a restoration request.
How to change proprietor name in GST?
To change the proprietor’s name in GST, you cannot directly amend it. Instead, you must apply for a new GST registration under the new proprietor’s name since the GST registration is PAN-based, and the proprietor’s name is linked to the PAN.
What is an authorization letter to appear before GST officer?
An authorization letter to appear before a GST officer is a formal document granting permission to a representative to attend a GST-related matter on behalf of the authorized person or business.
It typically includes the name of the authorized person, the representative’s details, the GSTIN of the business, and the reason for the appearance. The letter should be signed by the authorized person.
What is the difference between suspended and cancelled in GST?
In GST, suspended refers to a temporary halt in a taxpayer’s GST registration, during which they cannot make taxable supplies but may restore their registration later.
Cancelled means the permanent termination of the GST registration, where the taxpayer is no longer required to file returns or pay taxes, and cannot restore their registration unless they reapply.