This circular provides clarification and instructions on verification of applications for grant of new GST registration, particularly in cases where the applicant’s earlier registration was cancelled due to non-compliance.

The circular notes that several taxpayers whose registrations were cancelled under section 29(2) of the CGST Act for reasons such as non-filing of returns or non-payment of tax are continuing business activities without applying for revocation of cancellation. Instead, such persons are applying for fresh registration, possibly to avoid discharge of past tax liabilities. This practice undermines compliance under GST.

It is clarified that non-application for revocation of cancellation, while the conditions leading to cancellation continue to exist, shall be treated as a deficiency in the application for new registration. Proper officers are instructed to exercise due diligence while processing such applications and to verify details of earlier registrations on the same PAN through the common portal. Officers may compare information such as date of commencement of business, reason for registration, and details of proprietors or partners with data from cancelled registrations.

Where it is found that the earlier registration was cancelled for violations under section 29(2)(b) or (c) and the applicant has neither applied for revocation nor rectified the non-compliance, the proper officer may reject the application for fresh registration in terms of rule 9 of the CGST Rules.

These instructions aim to prevent misuse of the registration process and ensure uniform enforcement of GST provisions.