The deadline for the GSTR-3B return for the March 2026 tax period was recently extended as the GST portal was facing technical issues in April 2026. However, chartered accountants and lawyers say that even after the deadline was extended, some GST registered persons still filed their GSTR-3B late and in some cases their GST registration was also suspended.
Keep reading to know what the law says about cancelling and suspending GST registration for non-filing of GST return.
The law was amended in 2022 and this removed continuous six months language
Earlier, the law clearly set a six-month threshold for non-filing of returns before initiating proceedings for cancellation of GST registration. Chartered Accountant Siddharth Surana says that the GST law was amended by the Finance Act, 2022 (effective October 1, 2022) to substitute the earlier wording of “continuous period of six months” with “such continuous tax period as may be prescribed.”
This time period is prescribed in Rule 21 of GST rules which says that if a registered person is required to file return under subsection (1) of section 39 for each month or part thereof, has not furnished returns for a continuous period of six months then the registration can be suspended and ultimately cancelled.
Surana says: “This has led to practical challenges and varied positions across jurisdictions, especially in cases of minor delays in return filing.”
Brijesh Kothary, Partner at Khaitan & Co, told ET Wealth Online that from a legal standpoint, suspension of registration is not meant to be triggered for minor or isolated delays in GST return filing.
According to Kothary, in terms of Rule 21A(2) of the Central Goods and Services Tax Rules, 2017, the proper officer may suspend a registration only where there are reasons to believe that the registration is liable to be cancelled under Rule 21.
Some state GST Authorities suspend GST registration for non-filing of return even if it is late for five to ten days
According to Chartered Accountant Deep Koradia, for non-filing of GSTR-3B after 5 to 10 days from the due date, GST registration was suspended for a few of his clients and cancellation notices were issued by the Gujarat SGST Authorities.
The due date of 3B for any month is 20th of the succeeding month and 3B can only be filed if full tax payment has been made.
Koradia says: “If any taxpayer fails to file the 3B just by 5 to 10 days (due to shortage of funds or any other reason), then it has been observed that Gujarat SGST Authorities are suspending the number and issuing the SCN to cancel the registration.”
Koradia also says that as per Section 46, a notice has to be served directing the taxpayer to file the return within 15 days.
Koradia says: “Although such notices are being issued, the prescribed 15-day period is often not adhered to, and field formations are arbitrarily proceeding to issue SCNs under Section 29, resulting in immediate suspension of registration. This suspension of number has a very harsh impact as it halts the business, a tax payer can neither issue a tax invoice, nor generate E-invoice or e-waybill (See Rule 21A(3)).”
Kothary from Khaitan & Co, says some grounds for cancellation are broader and include serious compliance concerns like non-conduct of business from the declared place, issuance of invoices without actual supply, wrongly availing input tax credit, significant mismatches in reported outward supplies, or continuous non-filing of returns for prescribed periods (six months for monthly filers or two quarters, as applicable).
Therefore, Kothary says a short delay of a few days or a couple of weeks in filing GSTR-3B, by itself, should not ordinarily lead to suspension.
Kothary says: “However, if such delays are part of a larger pattern of non-compliance or are accompanied by other risk indicators, the authorities may invoke suspension as a preventive measure pending cancellation proceedings.”
Why GST number suspension for a short delay in return filing causes business disruption
According to Surana, from a practical standpoint, suspension of GST registration has significant business implications.
During the suspension period, the taxpayer would not be able to issue tax invoices, generate e-invoices or e-way bills, collect GST, or even file GST returns. Surana says that this effectively disrupts the entire supply chain and day-to-day operations, particularly for businesses with continuous outward supplies.
Such stringent consequences not only create business disruption, but also act as a strong enforcement tool. Given the adverse impact, businesses are naturally incentivised to promptly respond to suspension notices and take corrective steps for restoration of registration.
Surana says: “However, where suspension is triggered for relatively minor delays (such as a delay of a few days or weeks), the impact may appear disproportionate to the default.”
According to Kothari, once a GST registration is placed under suspension, the taxpayer is effectively barred from carrying on normal taxable operations and from a practical standpoint, the GSTIN becomes inactive on the portal, resulting in an inability to generate e-way bills, and this often leads to business counterparties hesitating to transact due to compliance concerns.
Kothari says: “The disruption also flows through to the input tax credit chain, making it clear that suspension, though temporary in nature, can significantly impede regular business activities.”
What can be the solution?
According to Kothari, tax authorities shouldn’t suspend GST registration mechanically. A proper officer is expected to give clear and sufficient reasons demonstrating why the registration is liable for cancellation and, in line with principles of natural justice, provide the taxpayer an opportunity of being heard before taking such action.
While Rule 21A of the Central Goods and Services Tax Rules, 2017 does not prescribe a specific appeal mechanism against suspension, the taxpayer is not left remediless.
Kothari says that a suspension order can generally be challenged under Section 107 of the Central Goods and Services Tax Act, 2017 as it qualifies as an order passed by an adjudicating authority, though in practice, this may be contested where suspension is treated as an interim or system-driven action.
According to Kothari, the more effective course often involves promptly responding to notices (such as REG-31 or REG-17) to seek revocation, and where the action appears arbitrary or prolonged, approaching the High Court under writ jurisdiction remains a strong and time-efficient remedy.
What can the government do?
According to Kothari, there is a strong case for amending CGST Act to make the suspension mechanism more taxpayer-centric and procedurally robust.
At present, while Rule 21A of the Central Goods and Services Tax Rules, 2017 enables suspension of registration (often even through system-generated or summary actions) the law does not expressly provide a dedicated appeal mechanism against such suspension.
Kothari says this can sometimes leave taxpayers with limited visibility on the reasoning or immediate recourse at the appellate stage. In that sense, it would be a meaningful reform to clearly align suspension orders under Rule 21A(2) and 21A(2A) with Section 107 of the Central Goods and Services Tax Act, 2017, thereby expressly recognising them as appealable orders before the Appellate Authority within the prescribed limitation period of say three months.
Kothari says: “Such an amendment would not only reduce reliance on writ remedies but also strengthen procedural fairness by ensuring that even interim or system-driven suspensions are subject to a structured and time-bound appellate review.”
Surana says that while the intent behind the amendment is to strengthen compliance and provide administrative flexibility, the current framework without a prescribed timeline can lead to arbitrary or inconsistent application.
In this context, it would be appropriate for the law (read with the Rules) to be supplemented with clear guidelines, defined timelines, and procedural safeguards. Surana says this would ensure that enforcement actions are transparent, consistent, and aligned with the principles of natural justice, while still achieving the objective of improved compliance.
