GST Update: Withdrawal from Rule 14A through form GST REG-32

Compliance under GST continues to evolve, and staying updated is critical for founders and finance teams. In a recent development, GSTN has enabled a structured online mechanism for businesses registered under the Simplified Registration Scheme Rule 14A to formally withdraw (opt out) through the withdrawal form on the GST Portal.

This update brings clarity to the opt-out process by defining eligibility conditions, authentication requirements, strict timelines, and temporary restrictions during processing. While the facility is digital and streamlined, it is not automatic. Businesses must meet specific return-filing conditions and complete Aadhaar authentication before the application can even be processed.

If your company is currently registered under the Simplified Registration Scheme and considering withdrawal, understanding the procedural steps and compliance checkpoints is essential to avoid delays or rejections.

In this blog, we break down the complete update in simple terms so you can take informed action.

Who Can Apply?

Active taxpayers who are currently registered under the Simplified Registration Scheme can apply for withdrawal, subject to legal provisions.

The option is visible only to those who are registered and active under the Simplified Registration Scheme and may apply for OPT OUT in accordance with the provisions of the law.

How to Apply (Step-by-Step Process)

Taxpayers can apply under this update by follow these steps on the GST Portal:

1. Login to the GST Portal and navigate to following:

Services → Registration → Application for Withdrawal from Rule 14A

2. Once followed, the link will be visible only for the registered taxpayers under the Simplified Registration Scheme and will be active 

3. Once inside, follow these steps:

• Select the reason for withdrawal
• Complete Aadhaar authentication for required persons including Primary Authorised Signatory and one promoter/partner. 
• Submit the application

Note: Simple Navigation looks easy but make sure all compliance requirements are completed before applying.

Key Pre-Conditions

You cannot file application for withdrawal (Form GST REG-32) unless the following conditions are satisfied:

Return Filing Conditions:

• Returns must be filed for a minimum period of three months if the withdrawal form is submitted before 1st April 2026.
• Returns must be filed for at least one tax period if the withdrawal form is submitted on or after 1st April 2026.
• All pending returns from the effective date of registration up to the date of filing Withdrawal Form i.e. GST REG-32 must be furnished.

In short: No pending returns allowed.

Aadhaar Authentication – Mandatory Step

Based on GST system analysis, authentication will be either:

• OTP-based authentication
• Biometric-based authentication

Mandatory for:

• Primary Authorised Signatory
• At least one Promoter/Partner

Important: ARN (Application Reference Number) will be generated only after successful Aadhaar authentication.

No authentication = No ARN = No processing.

Important Timelines You Must Track

It is important to keep the timeline in mind as missing deadlines results in applications failure:

• Draft application must be submitted within 15 days of creation
• Aadhaar/Biometric authentication must be completed within 15 days of submission
• If authentication is not completed within time, ARN will not be generated

What Happens After Submission?

Once authentication is successful and the application is submitted:

• The application is forwarded to your jurisdictional GST Officer
• The officer will examine the request
• An order will be issued (approval/rejection)

Restrictions While Application is Pending

While withdrawal application is under processing, you cannot file:

• Core amendment
• Non-core amendment
• Self-cancellation application

What Happens After Approval? (Form GST REG-33)

If the GST officer approves your withdrawal request:

• Order will be issued in the Form GST REG-33
• You can furnish details of supplies made to registered persons where output tax liability exceeds ₹2.5 lakh
• Effective from the first day of the succeeding month in which order is issued

This ensures compliance continuity post withdrawal.

Practical Advice for Founders

Before applying:

• Ensure all GST returns are filed
• There are no amendment applications pending
• Complete Aadhaar authentication readiness
• Avoid parallel amendments
• Plan cash flow and compliance timing
• Consult your tax advisor if unsure

This is a compliance sensitive update and incorrect filing may delay business operations.

Conclusion

The new GST portal facility for withdrawal from Simplified Registration Scheme brings clarity and digital efficiency. However, eligibility, return compliance, Aadhaar authentication, and timelines must be carefully managed.

If your business is registered under GST in the Simplified Registration Scheme and considering withdrawal, review your compliance status thoroughly before initiating withdrawal under the withdrawal form i.e., GST Form REG-32. Need assistance with eligibility review or filing? It’s always better to get professional support than face avoidable GST complications.