The Goods and Services Tax Network (GSTN) has introduced a new online facility that allows eligible taxpayers to opt out of Rule 14A directly through the GST portal.
This move gives businesses more flexibility.
If they had earlier chosen the simplified registration under Rule 14A, they can now switch back to the normal GST registration process by filing Form GST REG-32.
Here’s what it means and how it works.
What Is Rule 14A and Why Opt Out?
Rule 14A was introduced in late 2025 to simplify GST registration for small and low-risk businesses.
It offers a fast-track registration process.
However, as businesses grow or their requirements change, some may prefer to move back to the standard GST framework.
With this new online feature, eligible taxpayers can now withdraw from Rule 14A without visiting tax offices.
The process is fully digital, making compliance smoother and more transparent.
How to Apply on the GST Portal
To opt out, taxpayers must log in to the GST portal and follow this path:
Services → Registration → Application for Withdrawal from Rule 14A
Here’s what you need to do:
The “Option for registration under Rule 14A” will show as “No” by default.
Enter the reason for withdrawal.
Complete Aadhaar authentication for the Primary Authorised Signatory and one Promoter or Partner.
Only registered taxpayers who are currently under Rule 14A can access this option.
Key Conditions You Must Meet
GSTN has laid down clear eligibility conditions before filing Form GST REG-32.
You must have:
Filed returns for at least three months if applying before April 1, 2026.
Filed returns for at least one tax period if applying on or after April 1, 2026.
Filed all pending returns from the effective date of registration up to the date of applying.
Without meeting these conditions, the system will not allow submission of the form.
Important Deadlines to Remember
There are strict timelines involved in the process.
The draft application must be submitted within 15 days of creation.
Aadhaar or biometric authentication must be completed within 15 days of submission.
If authentication is not completed on time, an ARN (Application Reference Number) will not be generated.
Missing these deadlines could delay or cancel the opt-out request.
What Happens After Approval?
If the withdrawal is approved, the taxpayer will receive an order in Form GST REG-33.
After that, from the first day of the next month, the taxpayer can report output tax liability on supplies made to registered persons, especially where the liability exceeds Rs 2.5 lakh.
Why This Matters for Businesses
This update gives businesses more control over their GST registration choices.
Rule 14A remains optional. And now, with a simple digital exit route, businesses can adapt as their operations expand or change.
For growing companies, this flexibility could make compliance easier and more aligned with their long-term plans.
