Government FAQs clarify the proposed automatic GST registration cancellation facility for eligible taxpayers who have not passed on ITC exceeding ₹2.5 lakh in any month since registration, subject to return-filing and tax-payment conditions.
The Ministry of Finance has released FAQs explaining the proposed simplified GST registration cancellation mechanism recommended by the 57th GST Council.
Under the proposed framework, taxpayers who have not passed on Input Tax Credit exceeding ₹2.5 lakh in any month since registration may qualify for automatic processing of cancellation applications, subject to prescribed eligibility conditions.
Applicants must comply with outstanding return-filing and tax-payment requirements, including filing GSTR-3B where GSTR-1 or IFF details have already been furnished.
The FAQs also explain proposed system-based cancellation and revocation procedures, including a 180-day application period for specified revocation cases.
Additionally, the Government has clarified proposed changes to Rule 21, including the removal of certain grounds for cancellation relating to ITC, Rule 86B and return mismatches.
Important: Automatic cancellation will be available only when the revised framework is legally implemented and the taxpayer satisfies the prescribed conditions. CA Sansaar