Representation on issues Relating to Cancellation of Registration and Processing of Refund Applications under GST

Sales Tax Bar Association (Regd.), New Delhi filed representation to The Commissioner, State Tax/ DGST, New Delhi on issues relating to cancellation of registration and processing of refund applications under GST.

The representation is in continuation to the meeting with the association on 15.04.2026 and highlighting certain practical difficulties being faced by taxpayers and tax professionals in relation to –

• cancellation of registration on application filed by the taxpayer, and
• processing of refund applications under GST

Clarification required – Proper officer for cancellation applications

We refer to the recent order DTT-D011/33/2026- Policy-TT-144 dated 02.04.2026 issued by your office regarding the assignment of Proper officers posted in Ward for handling cancellation applications, wherein a monetary threshold of Rs. 2.5 crores has been prescribed in cases of ITC availed and / or passed on by the taxpayer and in cases where ITC availed and / or passed on by the taxpayer exceeds Rs. 2.5 crores prior approval of the concerned Zonal-in-charge to be obtained.

In this regard, the following clarification is humbly sought:

• Whether the said limit of Rs. 2.5 crores ITC availed and / or passed on by the taxpayer is to be considered on an annual basis or cumulatively from the date of registration.
• If the said limit is interpreted on a cumulative basis, it may lead to undue hardship, particularly in the following cases:
  • Small taxpayers who have been registered since FY 2017-18, whose aggregate ITC availed and / or passed on by the taxpayer over multiple years exceeds Rs. 2.5 crores despite modest annual turnover.
  • cases involving closure of business, death of proprietor, or financial distress, where cancellation is sought for genuine reasons.
  • such an interpretation may unnecessarily shift jurisdictions to higher authorities, thereby delaying the disposal of simple cancellation applications.

It is suggested that the threshold may kindly be clarified on an annual basis, or suitable relaxation may be provided in genuine hardship cases.

2. Issues in Processing of refund applications at Zonal level

At present, refund applications are being processed at the zonal level, rather than by jurisdictional proper officer. This system, which is different from all over the country both at Centre and State levels is causing the following practical difficulties:

• lack of familiarity with the taxpayer: Officers processing the refund are often not acquainted with the assessee’s profile, history, or business activities, leading to repetitive queries and delays.
• Difficulty in tracking applications: Taxpayers are required to visit multiple wards within a zone to ascertain the status of their applications, particularly when multiple refund claims for different periods are filed simultaneously.
• Multiple officers handling some taxpayer: Different refund applications of the same taxpayers are often assigned to different officers, resulting in –
  • duplication of document submissions
  • inconsistent querires
  • increased compliance burden
• Lack of inter-officer coordination: Physical verification or site visits conducted by one officer are not readily available/ visible on the portal to another officer handling a different refund application of the same taxpayer, leading to –
  • repeated inspections
  • unnecessary paperwork
  • delay in processing

Suggestions:

To streamline the process and enhance of doing business, we respectfully suggest:

• Assignment of refund applications to jurisdictional proper officer (ward-based) as in Centre and other States who are already familiar with the taxpayer.
• Alternatively, ensure centralized digital visibility of all actions, including inspection reports, queries , and submissions, across officers within the zone.
• single-point officer allocation for all refund applications of a taxpayers for a defined period.
• introduction of a transparent tracking mechanism indicating the name and contact details of the officer handling the application.
• fixation of internal timelines and accountability for disposal of refund claims to avoid undue delays.

Conclusion:

We submit that the above issues are causing genuine hardship to taxpayers as well as tax professionals and are impacting the timely compliance and ease of doing business under GST.

We sincerely request your good office to kindly consider the above concerns ad issue suitable clarifications/ administrative directions to address the same.

We shall be grateful for an opportunity to further elaborate on these issues, if required.

Thanking you,

Yours faithfully,

For Sales Tax Bar Association

Sanjay Sharma

President