06 July 2024
Under the Goods and Services Tax (GST) regime in India, if a taxpayer registered under the composition scheme fails to file their annual return (GSTR-4), there are provisions in the GST Act that allow for cancellation of GST registration. Here are the key points to consider:
1. **Non-filing of GSTR-4**: The annual return (GSTR-4) is mandatory for taxpayers registered under the composition scheme. Failure to file the GSTR-4 within the prescribed due date can lead to non-compliance with GST regulations.
2. **Cancellation of GST Registration**: As per Section 29 of the CGST Act, 2017, GST registration can be cancelled for various reasons, including non-compliance. Specifically, Section 29(2)(c) states that registration may be cancelled if the taxpayer fails to furnish returns for a specified period, in this case, for GSTR-4.
3. **Procedure for Cancellation**: - If a taxpayer fails to file GSTR-4, the tax authorities may issue a notice requiring the taxpayer to furnish the return within a specified time. - If the taxpayer fails to comply with the notice, the tax authorities may proceed to cancel the GST registration under the provisions of the GST Act.
4. **Consequences of Cancellation**: - Once GST registration is cancelled, the taxpayer will no longer be eligible to collect GST from customers or claim input tax credit. - The taxpayer must pay any tax due and file any pending returns before the cancellation takes effect.
5. **Appeal Process**: If the taxpayer believes that the cancellation of registration is unjustified, they have the right to appeal against the cancellation order within the prescribed time frame.
It's crucial for taxpayers under the composition scheme to ensure timely compliance with GST filing requirements, including filing of GSTR-4, to avoid penalties and cancellation of GST registration. If you are facing such a situation, it is advisable to consult with a GST practitioner or tax advisor for specific guidance tailored to your circumstances. They can assist you in resolving compliance issues and navigating through the procedures effectively.
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