Can GST Registration be Cancelled for Filing NIL Returns or Non-Commencement of Business for 6 Mo…

Can GST Registration be Cancelled for Filing NIL Returns or Non-Commencement of Business for 6 Months? Let’s understand the legal provision + case laws 1. Legal Provision — Rule 21(a) of CGST Rules, 2017: - Registration is liable to be cancelled if the registered person does not conduct any business from the declared place of business or has not commenced business within six months from the date of registration. So, if you obtain GSTIN but continuously file NIL returns (no turnover, no activity) for 6 months — it may be treated as non-commencement of business and invite cancellation. 2. Combined Reading of Rule 21(a) & 21(b): - Rule 21(a): Non-commencement of business within 6 months Rule 21(b): Failure to furnish returns for 6 continuous months Filing NIL returns for 6 months can be seen as both —Non-commencement of business, and Failure to carry on genuine business activity. 3. Departmental Action If either condition exists, officer may: Issue Show Cause Notice (REG-17) Allow 7 working days to reply in REG-18 Pass Cancellation Order (REG-19) During the process, your GSTIN may be suspended — meaning no invoicing or ITC allowed. 4. Key Case Laws (a) Suguna Cutpiece Center v. Appellate Deputy Commissioner (ST)(Madras HC, 2022 – 2022-TIOL-508-HC-MAD-GST) Held : - that cancellation solely for non-filing of returns or NIL activity, without proper enquiry or opportunity, is invalid. (b) ARS Steel & Alloy International Pvt. Ltd. v. STO(Madras HC, 2021 – 2021-VIL-52