A suspended GST number can cause unwanted stress for any business, disrupting operations and shaking customer confidence. In most cases, the suspension occurs due to missed return filings, minor mistakes, or technical issues. Fortunately, the problem can be resolved smoothly by following the proper process. You need to understand the key reasons behind suspension and outlines the simple steps required to reactivate a GST number, ensuring business activities continue without unnecessary interruptions. In this blog, you will learn how to reactivate a suspended GST number.

What is a Suspended GST Number?

A suspended GST number means the GST department has stopped the GST registration of a business.  Once suspended, the GST registration remains valid, but you cannot use it for regular business activities. The businesses are not eligible to issue GST invoices, collect GST from customers, claim input tax credit, etc. The suspension of GST number can occur due to several reasons, such as late GST return filing, mismatched information in returns, suspected non-compliance, and so on. If you resolve the issues related to suspension, you can easily restore your GST number.

Reasons for Suspension of GST Number

Listed below are the key reasons for the suspension of GST Number:

• Non-filing of GST returns

The GST department may suspend a GST number if a registered taxpayer fails to file returns for six consecutive months in the case of monthly filers. Under the QRMP scheme, suspension can occur if returns are not filed for two consecutive quarters. This rule ensures regular tax reporting and prevents delays.

• Mismatch in GST returns

The GST system verifies data automatically from different returns. This system marks the GSTIN for review when there is any major differences are found between GSTR-1 and GSTR-3B, or between the ITC shown in GSTR-2B and the ITC claimed in returns.  If there is a repetitive mismatch is found without any correction, it can lead to suspension.

• Business not started after registration

The GST department considers the registration inactive when a business does not start its operation for GST registration within six months. It means that the GST department suspends the GST number if the registration is not active.

• Incorrect registration details

A proper description of the business is required for GST registration. It can include address, documents, nature of operations, and other required documents. GST department can suspend the GST number if it is found that the address does not exist, the documents are not valid, and other incorrect information.

• Suspected fraudulent activities

Suspected fraudulent activities can include fake invoices, false claims of input tax credit, concealment of actual sales, and more. If these activities arise, the GST number will suffer from immediately suspended to prevent further loss of revenue.

• Violation of GST provisions

GST law has specific rules for registered taxpayers. Failure to respond to official notices, submission of misleading statements, or breach of prescribed rules falls under violation of GST provisions. Such violations result in the suspension of the GST number until the taxpayer resolves the issues.

Consequences of Having a Suspended GST Number

Here are the consequences of having a suspended GST number:

• Cannot make taxable sales

When the GST department suspends a GST number, the business loses the right to issue tax invoices. Customers are not eligible to claim input tax credit on purchases without a valid GST invoice for businesses. This can affect sales and bring a drop in revenue.

• Loss of input tax credit (ITC)

A suspended GST number stops a business from claiming input tax credit on goods or services purchased for business use. This means the tax already paid on purchases adds to costs, reducing overall profit margins.

• No GST return filing allowed

Once the GST number is under suspension, the GST portal does not accept new return submissions for that registration. This creates a backlog of pending returns, which may result in penalties and late fees once the GST number becomes active again.

• No claim for refunds

A suspended GST registration blocks access to any pending or new refund claims. Even if the business is eligible for a refund, the GST portal does not process the claim until the suspension ends. This can impact cash flow, especially for exporters and businesses with large tax credits.

• Reputation harm

Suspension of GST registration can damage a business’s reputation in the market. Clients, suppliers, and financial institutions may see it as a sign of poor compliance. This can lead to loss of contracts or supply arrangements.

• Need for revocation process

The business must complete the revocation process to make the GST number active through the GST portal. This usually requires clearing all pending returns, paying outstanding dues, and submitting a clarification to the department. The revocation process is useful to avoid suspension.

How to Check if Your GST Number is Suspended?

Here are the steps to check if a GST number is suspended:

Step 1: Log into the GST portal

Firstly, you must visit the official GST portal and enter the GSTIN and password with the captcha code to log in to the official GST portal. Then, you will find all the compliance details on the GST dashboard. Once you log in, you can access some suspension-related notices.

Step 2: Open the ‘View Notices and Orders’ section

You need to click on the “services”, then “User Services”, and select View Notices and Orders from the dashboard. This section contains all official communications from the GST department, such as suspension notices, show cause notices, cancellation orders, etc. The notice signifies that the GST department has taken action on the GST registration.

Step 3: Check for a suspension order

If your GST registration is under suspension, the portal displays an order that clearly mentions “Suspended” along with the reason. The order usually contains the suspension date, reference number, and instructions for resolving the issue. This confirms that the GST number is temporarily inactive.

Step 4: Use the GST public search tool

You can also use the GST public search tool to check the suspended GST number. In this tool, you need to enter the GSTIN number in the search box and view the result section. If your status shows “Suspended” instead of “Active”, it means that your GST is not active. Anyone, including suppliers and customers, can verify the GST status.

How to Reactivate Suspended GST Number?

Below is the step-by-step process to reactivate suspended GST number:

Step 1: Log in to the GST Portal

Firstly, you must open the official GST portal to activate the suspended GST number. Enter your valid username and password to access your account. This step will help you perform actions related to your GST registration. Once you are logged in, you will be able to access the drop proceeding option.

Step 2: Navigate to ‘View Notices and Orders’

Once logged in, you must visit the ‘Services’ menu. Next, you need to click on the “ View Notices and Orders” in the “User Services” section. This section includes the official communications from the GST department, which is linked to your GSTIN status. In this section, you can check for any notices about suspension or cancellation of your GST registration.

Step 3: Select the ‘Initiate Drop Proceeding’ Option

In the “View Notices and Orders” page, you need to search for the message box showing the status of your suspended GSTIN. Next, you need to click on the “Initiate Drop Proceeding” button next to it. This notifies the GST system about your completion of all pending compliance requirements, and wanting for suspension is removed.

Step 4: Confirmation of Initiation

Once you click the option, the system shows a confirmation message such as “Drop proceedings initiated successfully”. This means your request has been accepted, and the GST department will process it. In most cases, the GSTIN returns to ‘Active’ status quickly after this step.

However, this option is helpful when your GSTIN is not restored automatically even after you file all pending GSTR-3B returns. If your GSTIN remains suspended after meeting all compliance requirements, this method offers the quickest solution to make it active again. In many cases, the GSTIN gets reactivated within 15 minutes once all steps are completed.

Conclusion

Reactivating a suspended GST number becomes simple when the correct steps are followed and GST rules are met. If the GSTIN does not activate automatically after filing pending returns, the ‘Initiate Drop Proceeding’ option can help resolve the issue quickly. This process ensures that businesses resume operations without delays. It also helps avoid penalties and maintain smooth compliance with tax laws. As a result, the business remains active and free from unnecessary hurdles. If you want to file a GST registration or GST return, contact Online Legal India to get assistance from their experts.

FAQ

Q1. Why does the GST department suspend a GST number?

The GST department suspends a GST number for reasons such as not filing returns on time, mismatched details in GST filings, or non-compliance with GST rules.

Q2. Can a suspended GST number be reactivated online?

Yes, a suspended GST number can be reactivated online through the GST portal by filing pending returns or replying to notices.

Q3. How long does it take to reactivate a GST number?

The time for reactivation depends on the reason for suspension. In most cases, it takes a few days after completing the necessary steps.

Q4. What happens if a suspended GST number is not reactivated?

If the GST number is not reactivated, it may lead to cancellation, penalties, and restrictions on business operations.

Q5. Do I need professional help to reactivate a GST number?

In simple cases, businesses can reactivate their GST number themselves. For complex cases, professional help from a GST expert or consultant is advisable.