50th Meeting of the GST Council was held on July 11, 2023 in New Delhi, wherein it was recommended to strengthen the registration process and to effectively deal with the menace of fake and fraudulent registrations in GST by amending in rule 21A(2A) to provide for system-based suspension of the registration in respect of such registered persons who do not furnish the details of valid bank account under rule 10A with the time period prescribed under the said rule. Further, by insertion of a proviso in rule 21A(4) to provide for automatic revocation of such system-based suspension upon compliance with provisions of rule 10A.
Notification:
Accordingly, The CBIC has issued 'the Central Goods and Services Tax (Second Amendment) Rules, 2023' vide Notification No. No. 38/2023- Central Tax dated 04.08.2023 to amend the CGST Rules 2017.
In the said rules, in rule 21A,-
(i) for sub-rule (2A), the following sub-rule shall be substituted, namely:-
"(2A) Where,-
(a) a comparison of the returns furnished by a registered person under section 39 with the details of outward supplies furnished in FORM GSTR-1 or 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, or
(b) there is a contravention of the provisions of rule 10A by the registered person, the registration of such person 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, anomalies or non-compliances and asking him to explain, within a period of thirty days, as to why his registration shall not be cancelled.";
(ii) in sub-rule (4), after second proviso, the following proviso shall be inserted, namely:-
"Provided also that where the registration has been suspended under sub-rule (2A) for contravention of provisions of rule 10A and the registration has not already been cancelled by the proper officer under rule 22, the suspension of registration shall be deemed to be revoked upon compliance with the provisions of rule 10A."
Analysis:
The registered persons will be required to furnish details of bank account within a period of thirty days from the date of grant of registration, or before furnishing the details of outward supplies of goods or services or both under section 37 in FORM GSTR-1 or using invoice furnishing facility, whichever is earlier. If not, It has been provided for system-based suspension of the registration in respect of such registered persons.
It has been provided for automatic revocation of such system-based suspensionwhere registration has not already been cancelled by the proper officer under rule 22 uponcompliance with provisions of rule 10A.
