Introduction
On February 21, 2026, GSTN rolled out a new online facility allowing taxpayers to withdraw from the option availed under Rule 14A of the CGST Rules. This is a significant compliance update, as it provides clarity and a structured process for opting out through the filing of Form GST REG-32 on the GST Portal. Let’s break down the key updates, applicability, and timelines.
What is Rule 14A of CGST Rules?
Rule 14A of the CGST Rules is a simplified compliance scheme introduced to encourage voluntary participation by small businesses and service providers with minimal tax liability. It allows eligible taxpayers to obtain automatic electronic GST registration within three days of submitting FORM GST REG-01, provided they select “Yes” for Rule 14A during application.
The scheme mandates Aadhaar authentication for the Primary Authorised Signatory and at least one Promoter or Partner, ensuring transparency and identity verification. To maintain its focus on genuinely small taxpayers, Rule 14A restricts multiple registrations under the same PAN within a State or Union Territory and applies only to those whose monthly output tax liability on supplies to registered persons does not exceed ₹2.5 lakh.
In essence, Rule 14A offers a faster, paperless, and more secure registration pathway tailored for small-scale taxpayers.
Key Updates introduced on 21st February, 2026
- New Online Facility for withdrawal from 14A: Taxpayers registered under can now apply for withdrawal directly on the GST Portal.
- Eligible Taxpayers:
Only active taxpayers registered under Rule 14A can apply for withdrawal.
- Form GST REG-32: This form is the prescribed application for opting out.
- Aadhaar Authentication: Mandatory for the Primary Authorised Signatory and at least one Promoter/Partner. Authentication can be OTP-based or biometric.
- Timelines:
- Draft application must be submitted within 15 days of creation.
- Aadhaar/Biometric authentication must be completed within 15 days of submission.
- ARN will only be generated after successful authentication.
- Restrictions During Processing: While the application is pending, taxpayers cannot file core/non-core amendments or self-cancellation requests.
- Post-Sanction Compliance: Once withdrawal is approved via Form GST REG-33, taxpayers must furnish details of output tax liability exceeding ₹2.5 lakhs from the first day of the succeeding month.
Pre-conditions for Filing Form GST REG-32:
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- Returns for at least three months must be filed if applying before April 1, 2026.
- Returns for at least one tax period must be filed if applying on or after April 1, 2026.
- All returns due from the effective date of registration till the date of filing must be furnished.
How to Apply on GST Portal
- Login to the GST Portal.
- Navigate to: Services → Registration → Application for Withdrawal from Rule 14A.
- The link will be visible only if the taxpayer is active and registered under Rule 14A.
- The field “Option for registration under Rule 14A” will be auto-selected as No.
- Enter the reason for withdrawal.
- Complete Aadhaar Authentication for the Primary Authorised Signatory and one Promoter/Partner.
- Submit the application and ensure authentication is completed within the prescribed timeline.
Conclusion
The introduction of Form GST REG-32 for withdrawal from Rule 14A marks a step towards streamlined compliance and transparency. Taxpayers now have a clear digital pathway to opt out, backed by Aadhaar authentication and defined timelines. However, it is crucial to ensure that all returns are filed and authentication is completed promptly to avoid rejection or delays.
This facility empowers taxpayers with flexibility while reinforcing accountability in GST compliance.
BLOG BY – MITTAL & CO.