Suo Moto Registration under GST
In the context of GST (Goods and Services Tax) in India, "Suo Moto registration" refers to a situation where the tax authorities themselves register a person under GST without that person having applied for it. The process begins when the authorities determine that a person meets the criteria for registration but has not voluntarily applied for it.
Suo Moto Registration under GST:
Under the CGST Act, 2017, Section 25(8) grants the tax authorities the power to initiate GST registration for individuals or entities who are liable to be registered but have failed to apply. In such cases, the proper officer can issue a temporary GST registration to the person on their own initiative. Following this, the individual is required to submit a regular application for GST registration within 30 days. The process ensures that businesses who meet the registration criteria but neglect to apply are brought into compliance, with the person becoming liable to pay GST, file returns, and fulfill all other associated obligations from the date they became liable for registration. Failure to comply may result in penalties under the Act.
Procedure for Suo Moto Registration:
1. Detection of Non-Compliance:
· The tax authorities may detect that a person is liable for registration, based on certain triggers such as exceeding the GST threshold turnover (e.g., ₹20 lakhs for service providers and ₹40 lakhs for goods suppliers), inspection, data analysis, or complaints.
2. Issuance of Temporary GSTIN:
· Upon detecting the liability, the officer issues a temporary GST Identification Number (GSTIN) to the person. This number is assigned even before the person submits a formal application for registration.
3. Communication of Temporary Registration:
· The concerned person is notified via email or formal notice, informing them about the temporary registration and their obligations under GST law.
4. Response from the Registered Person:
· The person may choose to either:
a. Accept the temporary registration and proceed with filing the regular application for registration using the temporary GSTIN (via Form GST REG-01),
or
b. Challenge the registration, if they believe that GST registration is not applicable in their case.
5. Regularization of Registration:
· If the temporary registration is accepted, the person must submit a regular application for GST registration (in Form GST REG-01) within 30 days from the date of the temporary registration. Failure to do so may result in penalties or further actions.
Consequences of Suo Moto Registration:
1. Liability to Pay GST:
· Upon issuance of the temporary GSTIN, the person becomes liable to comply with GST laws, including the payment of GST, filing of returns, and other compliance requirements, retroactively from the date they became liable to be registered.
2. Interest and Penalties:
· Interest and penalties may be imposed on any tax liabilities arising from the period prior to the suo moto registration. This includes the interest on delayed payments and a penalty under Section 122 of the CGST Act for non-registration, which may be imposed for contravention of the registration provisions.
3. Compliance with Filing Obligations:
· The registered person will be required to comply with all relevant filing requirements under GST, such as filing GST returns, payment of taxes, and maintenance of books of accounts, starting from the date of liability for registration.
4. Penalty for Non-Registration:
· If it is found that the person has deliberately failed to apply for registration despite meeting the threshold limit, a penalty may be levied under Section 122 of the CGST Act, which deals with the penalties for non-compliance with GST provisions.
Forms Used in Suo Moto Registration:
1. GST REG-12:
· This form is used for issuing the Order of Suo Moto Registration by the tax officer. It notifies the person of the GST registration initiated by the authorities.
2. GST REG-01:
· This is the form used for the regular application for registration after a suo moto registration has been issued. The person is required to complete this form within 30 days of receiving the temporary registration.
Conclusion:
Suo Moto registration under GST serves as an enforcement tool by the tax authorities to ensure compliance with the registration requirements. It is a proactive measure to identify businesses that are liable to be registered but have failed to do so. Such registration imposes immediate compliance obligations, including retroactive tax payment, return filing, and penalties for non-registration, thus reinforcing the importance of timely registration under the GST framework.
If you need assistance, our team is at your service to guide you.