Standard Operating Procedure (SOP) for implementation of the provision of suspension of registrations under sub-rule (2A) of rule 21A of CGST Rules, 2017.

Last updated: 16 July 2021

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This notification introduces a Standard Operating Procedure (SOP) for the suspension of GST registrations. This measure, implemented under sub-rule (2A) of rule 21A of the CGST Rules, 2017, is designed to safeguard revenue when significant discrepancies or anomalies are found in a registered person's returns or outward supplies. Such issues may indicate a violation of GST provisions, posing an immediate threat to revenue.

CBEC-20/06/01/2021-GST
Government of India
Ministry of Finance
Department of Revenue
Central Board of Indirect Taxes and Customs
GST Policy Wing

New Delhi, dated the 11th February 2021

To,
The Principal Chief Commissioners / Chief Commissioners / Principal Commissioners /
Commissioners of Central Tax (All)
Madam/Sir,

Subject: Standard Operating Procedure (SOP) for implementation of the provision of suspension of registrations under sub-rule (2A) of rule 21A of CGST Rules, 2017 – regarding

As you are aware that vide notification No. 94/2020- Central Tax, dated 22.12.2020, sub-rule (2A) has been inserted to rule 21A of the Central Goods and Services Tax Rules, 2017 (hereinafter referred to as the CGST Rules). The said provision provides for immediate suspension of registration of a person, as a measure to safeguard the interest of revenue, on observance of such discrepancies /anomalies which indicate violation of the provisions of Act and rules made thereunder; and that continuation of such registration poses immediate threat to revenue.

2.1 Sub-rule (2A) of rule 21A is reproduced hereunder:

“(2A) Where, a comparison of the returns furnished by a registered person under section 39 with

(a) the details of outward supplies furnished in FORM GSTR-1; or

(b) the details of inward supplies derived based on the details of outward supplies furnished by his suppliers in their FORM GSTR-1, or such other analysis, as may be carried out on the recommendations of the Council, show that there are significant differences or anomalies indicating contravention of the provisions of the Act or the rules made thereunder, leading to cancellation of registration of the said person, his registration shall be suspended and the said person shall be intimated in FORM GST REG-31, electronically, on the common portal, or by sending a communication to his e-mail address provided at the time of registration or as amended from time to time, highlighting the said differences and anomalies and asking him to explain, within a period of thirty days, as to why his registration shall not be cancelled.”;

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FAQ :

The purpose of this notification is to provide a Standard Operating Procedure (SOP) for the implementation of the provision for the suspension of GST registrations under sub-rule (2A) of rule 21A of the CGST Rules, 2017.

GST registration can be suspended under sub-rule (2A) of rule 21A of the CGST Rules, 2017.

A GST registration may be suspended if a comparison of furnished returns with outward supply details (GSTR-1) or inward supply details shows significant differences or anomalies, indicating a contravention of the Act or rules, and posing an immediate threat to revenue.

The registered person will be intimated about the suspension electronically on the common portal in FORM GST REG-31, or via email, highlighting the discrepancies and anomalies.

The registered person is given a period of thirty days to explain why their registration should not be cancelled.