GST Registration Cancelled or Suspended? Revocation and Surrender

Suspension: what it means

Under Rule 21A, registration is suspended in three situations: when the taxpayer applies for cancellation (from the application date or the date sought, whichever is later); when the officer starts cancellation proceedings; and, under Rule 21A(2A), when the system finds significant differences between GSTR-1, GSTR-3B and suppliers’ data, or the bank account has not been furnished under Rule 10A. In the last case the taxpayer receives REG-31 and has 30 days to explain.

• During suspension you must not issue tax invoices or charge tax, refunds are not granted, and GSTR-3B need not be filed for that period.
• If the officer drops the proceedings, the suspension is treated as revoked from the date it began.
• Where suspension is for non-filing, it is deemed revoked when all pending returns are filed; where it is for Rule 10A, when the bank details are furnished.

Why the officer cancels a registration

Section 29(2) and Rule 21 list the grounds. The common ones are:

• Returns not filed for six continuous months (monthly filers) or two continuous quarters (QRMP filers); for composition taxpayers, the annual return not filed within three months of its due date.
• No business conducted from the declared place of business.
• Invoices issued without supply, or ITC availed in breach of Section 16.
• Outward supplies in GSTR-1 higher than those in GSTR-3B.
• Voluntary registration where business did not start within six months.
• Returns for the gap period not filed within 30 days after an earlier revocation.

Before cancelling, the officer issues REG-17, and the reply in REG-18 is due within 7 working days. Where the ground is non-filing, filing all pending returns with tax, interest and late fee is enough: the officer then drops the proceedings in REG-20. Otherwise the cancellation order is issued in REG-19, generally within 30 days of the reply. Cancellation can be made from a retrospective date, but the Delhi High Court has repeatedly held that the notice and order must give reasons for going back in time (for example, Royal Enterprises, W.P.(C) 2461/2025).

Revocation of cancellation: REG-21

Revocation is available only where the officer cancelled the registration on his own motion. A registration cancelled on your own application cannot be revived through REG-21; a fresh registration is the route. In JMD Enterprises v Sales Tax Officer (2025), the Delhi High Court directed that a pending revocation application be decided within one month, which reflects the 30-day period in Rule 23.

Returns more than three years old. Sections 37(5), 39(11) and 44(2) of the CGST Act, inserted by the Finance Act, 2023 and in force from 1 October 2023 (Notification 28/2023-Central Tax), bar a return from being filed after three years from its due date, unless the Government allows it by notification; the GST portal began enforcing this from the July 2025 tax period. Where returns for such old periods are pending, the condition in Rule 23 may be impossible to meet, and the remedy has to be worked out case by case, starting with the latest GSTN advisories on the portal.

If the 90-day window has passed

• Within a further 180 days, apply for revocation with a request for extension showing sufficient cause.
• After that, an appeal in APL-01 against the cancellation order lies within three months of its communication, plus one month on sufficient cause (Section 107).
• Where both are exhausted, the High Court under Article 226 has in many cases allowed revocation on filing returns and paying dues; this depends on the facts.

Voluntary surrender: REG-16 and GSTR-10

A business that has closed, been transferred, changed constitution, or is no longer liable to registration applies in REG-16 within 30 days of the event (Rule 20). The form asks for inputs and capital goods held in stock on the date from which cancellation is sought and the amount payable on them. Under Section 29(5), that amount is the ITC on such stock or the output tax on it, whichever is higher. A starting format is the REG-16 application template, and ITC workings can be set out in the ITC reversal letter.

After cancellation, every person who filed GSTR-3B must file the final return, GSTR-10, within three months of the date of cancellation or the date of the cancellation order, whichever is later (Section 45). The late fee is Rs 100 a day under each of the CGST and SGST Acts, up to Rs 5,000 under each (Section 47(1)). The GST late fee calculator works out the late fee on pending returns. Cancellation does not wipe out earlier tax dues (Section 29(3)); see GST notice reply.

Official sources

• CGST Act, Section 29 and Section 30 (CBIC)
• Rule 20 (REG-16), Rule 21 (grounds), Rule 21A (suspension, REG-31)
• Rule 22 (REG-17 to REG-20) and Rule 23 (REG-21 to REG-24, REG-05)
• CGST Act, Section 45 (final return) and Section 47 (late fee)
• CGST Act, Section 107 (appeal)