Central Tax Circulars

CGST Circular 95/2019

To,

The Principal Chief Commissioners / Chief Commissioners / Principal
Commissioners / Commissioners of Central Tax (All) The Principal Director
Generals / Director Generals (All)

Madam/Sir,

Subject: Verification of applications for grant of new registration – Reg.

1) Recently, a large number of registrations have been cancelled by the proper
officer under the provisions of sub-section (2) of section 29 of the Central
Goods and Services Act, 2017 (hereinafter referred to as „CGST Act‟) read with
rule 21 of the Central Goods and Services Rules, 2017 (hereinafter referred to
as „CGST Rules‟) on account of noncompliance of the said statutory provisions.
In this regard, instances have come to notice that such persons, who continue
to carry on business and therefore are required to have registration under GST,
are not applying for revocation of cancellation of registration as specified in
section 30 of the CGST Act read with rule 23 of the CGST Rules. Instead, such
persons are applying for fresh registration. Such new applications might have
been made as such person may not have furnished requisite returns and not paid
tax for the tax periods covered under the old/cancelled registration. Further,
such persons would be required to pay all liabilities due from them for the
relevant period in case they apply for revocation of cancellation of
registration. Hence, to avoid payment of the tax liabilities, such persons may
be using the route of applying for fresh registration. It is pertinent to
mention that as per the provisions contained in proviso to sub-section (2) of
section 25 of the CGST Act, a person may take separate registration on same PAN
in the same State.

2) In order to ensure uniformity in the implementation of the provisions of law
across the field formations, the Board, in exercise of its powers conferred
by section 168 (1) of the CGST Act, hereby issues the following instructions.

3) Sub-section (10) of section 25 of the CGST Act read with rule 9 of the CGST
Rules provide for rejection of application for registration if the
information or documents submitted by the applicant are found to be deficient.
It is possible that the applicant may suppress some material information in
relation to earlier registration. Some of the information that may be concealed
in the application for registration in FORM GST REG -01 are S. No. 7 „Date of
Commencement of Business‟, S. No. 8 „Date on which liability to register
arises‟, S. No. 14 „Reason to obtain registration‟ etc. Such persons may also
not furnish the details of earlier registrations, if any, obtained under GST on
the same PAN.

4) It is hereby instructed that the proper officer may exercise due caution
while processing the application for registration submitted by the
taxpayers, where the tax payer is seeking another registration within the State
although he has an existing registration within the said State or his earlier
registration has been cancelled. It is clarified that not applying for
revocation of cancellation of registration along with the continuance of the
conditions specified in clauses (b) and (c) of sub-section (2) of section 29 of
the CGST Act shall be deemed to be a “deficiency” within the meaning of
sub-rule (2) of rule 9 of the CGST Rules. The proper officer may compare the
information pertaining to earlier registrations with the information contained
in the present application, the grounds on which the earlier registration(s)
were cancelled and the current status of the statutory violations for which the
earlier registration(s) were cancelled. The data may be verified on common
portal by fetching the details of registration taken on the PAN mentioned in
the new application vis-a-vis cancellation of registration obtained on same
PAN. The information regarding the status of other registrations granted on the
same PAN is displayed on the common portal to both the applicant and the proper
officer. Further, if required, information submitted by applicant in S. No. 21
of FORM GST REG-01 regarding details of proprietor, all partner/Karta/Managing
Directors and whole time Director/Members of Managing Committee of
Associations/Board of Trustees etc. may be analysed vis-à-vis any cancelled
registration having same details.

5) While considering the application for registration, the proper officer shall
ascertain if the earlier registration was cancelled on account of violation
of the provisions of clauses (b) and (c) of sub-section (2) of section 29 of
the CGST Act and whether the applicant has applied for revocation of
cancellation of registration. If proper officer finds that application for
revocation of cancellation of registration has not been filed and the
conditions specified in clauses (b) and (c) of sub-section (2) of section 29 of
the CGST Act are still continuing, then, the same may be considered as a ground
for rejection of application for registration in terms of sub-rule (2) read
with sub-rule (4) of rule 9 of CGST Rules. Therefore, it is advised that where
the applicant fails to furnish sufficient convincing justification or the
proper officer is not satisfied with the clarification, information or
documents furnished, then, his application for fresh registration may be
considered for rejection.

6) It is requested that suitable trade notices may be issued to publicise the
contents of these instructions.

7) Difficulty, if any, in the implementation of these instructions may be
brought to the notice of the Board. Hindi version will follow.