GST registration can be suspended under the following circumstances:
- Upon application for cancellation – If a registered person applies for cancellation, the registration is deemed suspended from the later of the date of application or the requested cancellation date until final cancellation proceedings are completed.
- Suspension by tax authorities – If the officer believes the registration is liable for cancellation due to violations under Section 29 or Rule 21, they may suspend it pending cancellation.
- Significant tax discrepancies – If a mismatch is found between GSTR-1 (outward supplies) and GSTR-3B (returns), or between a taxpayer’s purchases and suppliers' sales data, indicating non-compliance.
- Failure to comply with Rule 10A – If a taxpayer does not update their bank account details as required.
Consequences of Suspension:
- The taxpayer cannot make taxable supplies or issue tax invoices.
- No GST returns (GSTR-3B) are required to be filed during suspension.
- Refund claims under Section 54 are not allowed while the registration is suspended.
Revocation of Suspension:
- Suspension is revoked upon completion of cancellation proceedings.
- If suspended due to pending returns, suspension is revoked once all pending returns are filed.
- If suspended due to Rule 10A violations, compliance with Rule 10A will revoke the suspension.
- The officer may revoke suspension at any time before cancellation if deemed necessary.
Upon revocation, specific GST compliance procedures must be followed for the supplies made during the suspension period.
