Registration, and What Goes Wrong

Applying for GST registration looks like a form-filling exercise. Most of the time it is. The trouble is in the details the form does not make obvious: when the thirty days began, which State an application belongs in, how many registrations one business needs, and what happens to a registration that is suspended or cancelled. A registration that goes wrong does more than create paperwork. It can stop a business invoicing with tax, and stop its customers taking credit.

The previous guide dealt with who must register. This one deals with section 25 of the CGST Act, which governs the process, and section 29, which governs cancellation. The forms, documents and portal steps for each kind of applicant are set out in a separate set of procedure guides, beginning with Applying for GST Registration: the Steps Every Applicant Takes.

Thirty days, from the date of liability

Section 25(1) requires every person liable under section 22 or 24 to apply “in every such State or Union territory in which he is so liable within thirty days from the date on which he becomes liable”.

The date matters because of rule 10 of the CGST Rules. Under rule 10(2), registration is “effective from the date on which the person becomes liable to registration” if the application is made within the thirty days. Under rule 10(3), if the application is late, the effective date is the date the registration is granted.

The consequence is easy to miss. A business that applies late does not escape tax for the gap between liability and registration. It remains a taxable person for that period. What it loses is a registration covering it, and with it the invoices on which customers could have taken credit.

Two classes of person have a stricter rule. A casual taxable person or a non-resident taxable person must apply “at least five days prior to the commencement of business”.

How many registrations

The general rule, in section 25(2), is “a single registration in a State or Union territory”. A business needs one registration in each State or Union territory where it is liable, not one per office.

There are three exceptions and refinements.

• Separate registration within a State is optional. The proviso to section 25(2) allows a person with several places of business in a State to obtain “a separate registration for each such place of business”, subject to prescribed conditions.
• SEZ units must be separate. A person with a unit in a Special Economic Zone, or an SEZ developer, “shall have to apply for a separate registration” from its places of business outside the zone in the same State.
• Offshore supplies. A person making supplies from India’s territorial waters registers in the coastal State or Union territory nearest the baseline.

Each registration is a distinct person under section 25(4). The supply guide explained what follows: supplies between them are supplies, valued under rule 28. A second registration in the same State is therefore not a free administrative choice. It brings cross-charges, separate returns and separate ledgers.

Voluntary registration

Section 25(3) allows a person not liable under section 22 or 24 to register voluntarily. The same sub-section provides that “all provisions of this Act, as are applicable to a registered person, shall apply to such person”. A voluntary registrant is not a lesser category. It charges tax, files returns and can have its registration cancelled for not doing so, like anyone else.

Two consequences follow in section 29. A voluntary registrant may apply to cancel if it “intends to opt out”. And under section 29(2)(d), the officer may cancel a voluntary registration if the person “has not commenced business within six months from the date of registration”.

PAN, Aadhaar and the bank account

Section 25(6) makes a Permanent Account Number a condition of registration. A person registering only to deduct tax at source may use a Tax Deduction and Collection Account Number instead.

Sub-sections (6A) to (6D), in force from 1 January 2020, add identity verification. A registered person must undergo Aadhaar authentication or furnish proof of possession. A person without an Aadhaar number must be offered alternative means. A person who fails to do any of these has a registration that “shall be deemed to be invalid”.

In practice, authentication decides how fast an application is processed. Rule 9 of the CGST Rules requires the officer to approve or raise a query within seven working days. That becomes thirty days, after physical verification of the place of business, where the applicant does not opt for Aadhaar authentication. The same applies where the common portal flags the application on data analysis and risk parameters, or where the officer, with approval, decides to verify. If the officer takes no action within the applicable period, rule 9(5) deems the application approved.

Declining authentication no longer avoids a visit. Under the second proviso to rule 8(4A), in force from 11 February 2025, an applicant who does not opt for Aadhaar authentication must have a photograph taken, and the original documents verified, at a facilitation centre notified by the Commissioner. The application is complete only after that. An applicant who does opt for authentication but is flagged on data analysis and risk parameters goes through the same process, with biometric authentication added.

Two further routes were added from 1 November 2025, by Notification No. 18/2025-Central Tax. Under rule 9A, an applicant identified on the common portal “based on data analysis and risk parameters” is granted registration electronically “within three working days from the date of submission of application”.

Rule 14A is an option the applicant chooses. It is open to a person who determines that its output tax on supplies to registered persons, central, State or Union territory and integrated tax and cess together, “does not exceed two lakh and fifty thousand rupees per month”. Aadhaar authentication is compulsory. On successful authentication, registration is granted electronically “within three working days from the date of submission of application”. Only one registration under the rule is allowed per PAN in a State. A person who outgrows the limit must apply to withdraw from the option, in FORM GST REG-32, after filing the required returns. It may report liability above the limit only from the month after the withdrawal is approved.

Once registered, rule 10A requires bank account details on the portal within thirty days of the grant, or before the first GSTR-1, whichever is earlier. This is a frequent source of trouble, because failing to do it is itself a ground for suspension.

Registration by the officer

Under section 25(8), where a person liable to register fails to do so, “the proper officer may … proceed to register such person”. This is without prejudice to other action. A business found trading above the threshold without registration does not avoid the consequences by applying once found.

Suspension: a registration that cannot be used

Suspension is the event that most often catches registered businesses unawares. Section 29 allows the officer to suspend a registration while cancellation proceedings are pending, and rule 21A sets out when.

On the person’s own application. When a person applies to cancel, the registration “shall be deemed to be suspended” from the date of application, or from the date the cancellation is sought, if later.

On the officer’s belief. Where the officer “has reasons to believe” the registration is liable to be cancelled, it may be suspended pending the proceedings.

On an automated mismatch. Rule 21A(2A) suspends a registration where a comparison of returns shows “significant differences or anomalies”, or where bank account details have not been furnished under rule 10A. The comparison is between GSTR-3B and GSTR-1, or between GSTR-3B and the inward supplies shown in suppliers’ GSTR-1. The person is notified in FORM GST REG-31 and has thirty days to explain why the registration should not be cancelled.

The effect is set out in rule 21A(3): a suspended person “shall not make any taxable supply”. The Explanation clarifies that this means it shall not issue a tax invoice or charge tax. Rule 21A(3A) adds that no refund will be granted during a suspension under sub-rules (2) or (2A). For a business with customers who need tax invoices, suspension can halt trading.

Suspension ends when the cancellation proceedings conclude, and the officer may revoke it at any time while they are pending. Two cases end it automatically, but only for a suspension under sub-rule (2A) and only if the registration has not already been cancelled under rule 22. A suspension for not filing returns, under section 29(2)(b) or ©, is deemed revoked when all pending returns are furnished. A suspension for missing bank details is deemed revoked when rule 10A is complied with.

Cancellation

Section 29 distinguishes cancellation at the person’s request from cancellation at the officer’s initiative.

At the person’s request, or on the officer’s own motion, under section 29(1). The grounds are that the business has been discontinued, transferred fully “for any reason including death of the proprietor”, amalgamated, demerged or otherwise disposed of; that its constitution has changed; or that the person is no longer liable to register or wishes to give up a voluntary registration.

At the officer’s initiative, under section 29(2). The grounds are contravention of prescribed provisions; non-filing of returns for the prescribed period; a voluntary registrant not commencing business within six months; and registration “obtained by means of fraud, wilful misstatement or suppression of facts”. Cancellation under this sub-section may be “from such date, including any retrospective date, as he may deem fit”. A proviso requires that the person be given “an opportunity of being heard”.

Rule 21 lists the prescribed contraventions. Among them: not conducting business from the declared place; issuing invoices without supply; availing credit in breach of section 16; declaring more outward supplies in GSTR-1 than in GSTR-3B; not furnishing bank details; and not filing returns for six continuous months, or two continuous quarterly periods for quarterly filers.

Two provisions survive cancellation. Section 29(3) preserves liability for tax “for any period prior to the date of cancellation”. And section 29(5) requires a payment equal to the credit on inputs and capital goods held in stock on cancellation, or the output tax on them, whichever is higher. Cancellation is therefore not a way to step away from the tax already embedded in stock.

Getting a cancelled registration back

A person whose registration was cancelled by the officer on his own motion may apply for revocation under section 30. The time limit is now in rule 23. The application is due within ninety days of service of the cancellation order. On sufficient cause, and for reasons recorded in writing, the Commissioner, or an officer he authorises not below the rank of Additional or Joint Commissioner, may extend that by up to one hundred and eighty days.

Where the cancellation was for not filing returns, rule 23 sets a precondition. No revocation application may be filed until the returns are filed and the tax, interest, penalty and late fee due on them are paid. After revocation, all returns for the period of cancellation must be filed within thirty days.

Where registrations go wrong

The recurring problems, in roughly the order they arise:

1. Applying late, so that the registration takes effect only from grant and the period before it is uncovered.
2. Registering in the State of the head office instead of each State from which supplies are made.
3. Taking a second registration in a State without appreciating that it creates a distinct person.
4. Not completing Aadhaar authentication, which lengthens processing, invites physical verification and requires a visit to a facilitation centre.
5. Not adding bank account details within thirty days, which is a ground for suspension.
6. Leaving GSTR-1 and GSTR-3B out of agreement, which triggers suspension under rule 21A(2A).
7. Missing returns for six months, or two quarters, which is a ground for cancellation.
8. Letting the ninety-day revocation window pass after a cancellation.

With registration in place, the series moves to the benefit that registration makes available: input tax credit. The next guide covers the conditions in section 16(2) that every claim must meet.