Rejection of GST cancellation application after long period

[Rajat Gupta]

Dear Experts, there are cases where the revenue rejects the cancellation application after keeping it pending for an unnecessarily long period. Till the time the application is rejected, the status of GSTN gets 'suspended'. In this backdrop, I have the following queries:

1. Can the individual do any other commercial activity like collecting rent, commission etc. till the time GSTN is suspended?

2. If the cancellation application is rejected later on, it will not be possible for the person to re-apply the cancellation from the same date as earlier. In such an event, is he required to pay tax on the rent/commission collected during the intervening period?

[Shilpi Jain]

What is the reason for applying for cancellation of registration?

[Rajat Gupta]

due to closure of business

[Shilpi Jain]

Also what is the reason for not cancelling the registration by the department.

If it is something unreasonable then you should consider escalating to the higher officials or raise a grevieance.

[KASTURI SETHI]

If GSTN is suspended, no  outward supply is possible. 

AI Summary

GST registration suspension prevents outward supplies and affects ability to conduct commercial activity during pending cancellation Application to cancel GST registration left pending leads to GSTN being suspended, which respondents say prevents any outward supply while suspended; taxpayers should query departmental reasons, consider escalation or grievance for unreasonable delay, and note uncertainty over tax liability for receipts (e.g., rent or commission) collected during the suspension if cancellation is later refused.