The CBIC vide Notification No. 94/2020-Central Tax, dated December 22, 2020, issued Central Goods and Services Tax Rules (Fourteenth Amendment), 2020, amending Rule 21 of the Central Goods and Services Rules, 2017 ("CGST Rules") in the following manner:
• Clause (e), (f), and (g) has been inserted in Rule 21 of CGST Rules for cancellation of registration in certain cases:
• Clause (e)- Now the officer can proceed for cancellation of GSTIN where a taxpayer avails Input Tax Credit ("ITC") exceeding the permissible amount of ITC, which is in violation of the provisions of section 16 of the CGST Act and rules made thereunder.
• Clause (f)- It talks about synchronization between GSTR 1 and GSTR 3B. Department can now cancel registration where the Outward tax liability declared in GSTR 3B is lesser than the Outward tax liability declared in GSTR 1 for one or more tax period.
• Clause (g)- Violates Rule 86B of the CGST Rules which talks about restrictions on use of amount available in electronic credit ledger.
Amended Rule 21 of the CGST Rules, now reads as under w.e.f. 22nd December 2020:
"21. Registration to be canceled in certain cases
The registration granted to a person is liable to be canceled if the said person,-
(a) does not conduct any business from the declared place of business; or
(b) issues invoice or bill without supply of goods or services or both in violation of the provisions of the Central Goods and Services Tax Act, 2017 ("CGST Act") or the rules made thereunder; or
(c) violates the provisions of section 171 of the Act or the rules made thereunder
(d) violates the provision of rule 10A
(e) avails input tax credit in violation of the provisions of section 16 of the Act or the rules made thereunder; or
(f) furnishes the details of outward supplies in FORM GSTR-1 under section 37 for one or more tax periods which is in excess of the outward supplies declared by him in his valid return under section 39 for the said tax periods; or
(g) violates the provision of rule 86B."
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