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?
Suspended GSTIN during pending cancellation does not stop tax on taxable receipts; liability arises if cancellation rejected Where a GST cancellation application remains pending and the GSTIN shows as 'suspended,' the registrant is generally not authorized to carry on taxable supplies; any commercial receipts that are taxable (e.g., taxable rent or commission) remain subject to GST and must be declared and paid once the registration remains effective or is reinstated. Whether specific receipts are taxable depends on the nature of supply (e.g., residential rent may be exempt, commercial rent/commission typically taxable). If cancellation is later rejected, the person will be liable for tax, interest and possible penalty on taxable receipts during the intervening period and must file returns for that period. (AI Summary)
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