Seeks to clarify verification for grant of new registration.

By
Team Gstindiaguide
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Circular No.: 95/14/2019-GST
Date of Circular: 28th March 2019
Relevant Sections and Rules:

  • Central GST Act, 2017:
    • Section 25(2), 25(10): Registration procedures
    • Section 29(2)(b) & (c): Cancellation for non-filing of returns and contravention
    • Section 30: Revocation of cancellation
    • Section 168(1): Power to issue instructions
  • CGST Rules, 2017:
    • Rule 9(2) & 9(4): Deficiencies and rejection of registration
    • Rule 21: Grounds for cancellation
    • Rule 23: Application for revocation

Summary of Circular:

This circular issues procedural instructions to ensure that fresh GST registrations are not misused by taxpayers whose earlier registrations were cancelled for non-compliance, particularly to evade tax liabilities or avoid return filing.

  1. Misuse Identified:
  • Many persons whose registrations were cancelled under Section 29(2) are:
    • Not applying for revocation (under Section 30), but
    • Applying for fresh registration to continue business and avoid past liabilities.
  • This practice is against the intent of the law and leads to loss of revenue.
  1. Instruction to Proper Officers:
  • Officers must scrutinize new applications carefully where the applicant:
    • Has existing registration in the same State, or
    • Had prior cancelled registration (on same PAN).
  • They should verify fields in FORM GST REG-01 such as:
    • Date of commencement
    • Liability to register
    • Reason for registration
    • Prior registration details
  1. What Constitutes a Deficiency:
  • If the applicant does not file revocation of cancelled registration and continues to violate clauses (b) or (c) of Section 29(2) (i.e., non-filing or contravention), such omission is a deficiency under Rule 9(2).
  1. Data Cross-Verification:
  • Officers should:
    • Compare prior and current registration details using PAN-linked data on the GST portal.
    • Examine the roles of proprietors, partners, directors, trustees in old vs new applications.
    • Reject new applications under Rule 9(2) and 9(4) if discrepancies persist or justification is unconvincing.
  1. Advisory for Field Officers:
  • Publicize these instructions through trade notices.
  • Report any implementation issues to the Board.

Source: Circular No.: 95/14/2019-GST

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