The latest amendment has been made in the CGST Rules, 2017 vide notification no. 94/2020-Central Tax Dated 22-12-2020 (CGST (Fourteenth Amendment) Rules, 2020.) Amongst the various changes made vide above Notification is insertion of new sub-rule (2A) in Rule 21A of the CGST Rules, 2017 regarding suspension of GST registration in cases of significant deviation between GSTR-1 & GSTR-3B or GSTR-3B & GSTR-2B. It may be noted that as per Notification said Rule will be effective from date of publication viz 22-12-2020.
Text of the new Sub-rule (2A) to Rule 21A:
(2A) Where, a comparison of the returns furnished by a registered person under section 39 with
(a) the details of outward supplies furnished in FORM GSTR-1; or
(b) the details of inward supplies derived based on the details of outward supplies furnished
by his suppliers in their FORM GSTR-1,
or such other analysis, as may be carried out on the recommendations of the Council, show that
there are significant differences or anomalies indicating contravention of the provisions of the Act
or the rules made thereunder, leading to cancellation of registration of the said person, his
registration shall be suspended and the said person shall be intimated in FORM GST REG-31,
electronically, on the common portal, or by sending a communication to his e-mail address
provided at the time of registration or as amended from time to time, highlighting the said
differences and anomalies and asking him to explain, within a period of thirty days, as to why his
registration shall not be cancelled.
New Form GST REG-31
Highlights of the new sub rule:
a) New sub-rule will apply in cases of significant differences or anomalies: The new sub-rule shall be applicable where significant differences or anomalies indicating contravention of the provisions of the Act or the rules made thereunder, leading to cancellation of registration of the said person are detected on:
i) Comparison of the returns furnished by a registered person under section 39 viz GSTR-3B with the details of outward supplies furnished by him in FORM GSTR-1.
ii) Comparison of the returns furnished by a registered person under section 39 viz GSTR-3B with the details of inward supplies derived based on the details of outward supplies furnished by his suppliers in their FORM GSTR-1 i.e. GSTR-2B.
iii) such other analysis, as may be carried out on the recommendations of the Council.
b) Suspension of registration and intimation (SCN) to be sent in FORM GST REG-31: In case of significant differences or anomolies as above, registration shall be suspended and the said person shall be intimated in FORM GST REG-31, electronically, on the common portal, or by sending a communication to his e-mail address, highlighting the said differences and anomalies and asking him to explain, within a period of thirty days, as to why his registration shall not be cancelled. Needless to say if the reply is not found satisfactory the GST registration can be cancelled.
c) No taxable supply can be made under period of suspension: As per Rule 21A(3) as amended, a registered person whose registration has been suspended as above shall not make any taxable supply during the period of suspension and shall not be required to furnish GSTR-3B.
d) No refund can be granted to person whose registration is suspended: As per newly inserted sub-rule (3A) to Rule 21A, such person shall not be granted any refund under section 54, during the period of suspension of his registration.
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Frah Saeed is a law graduate specializing in the core field of indirect taxes and is the Co-founder of taxwallah.com. She has authored many publications on GST and is into full-time consultancy on GST to big corporates. She as a part of taxwallah.com heads a team comprising of Chartered Accountants and Advocates and plays a key role in our mission to disseminate GST knowledge to all.
