If you have a GST registration that you wish to cancel, there are two ways to do so – voluntary cancellation or cancellation by a GST officer. In this guide, we will take a look at the process for cancelling GST registration in India, including the documentation required and other considerations.
About GST Cancellation
GST registration can be cancelled voluntarily if the business is dormant or does not have the necessary business turnover. Further, a GST registration can also be cancelled by a GST officer if the business is non-compliant under GST. Once GST registration is cancelled, the person or entity is no longer required to file GST returns and is not required to pay or collect GST.
Voluntary GST Cancellation
If a person or entity with GST registration wishes to cancel their GST registration, a cancellation request must be submitted to the GST Department in Form GST REG-16. After reviewing the application, if the GST Officer is satisfied, he or she will issue an order to terminate GST registration in Form GST REG-19.
The following are some of the top reasons for voluntary GST registration cancellation:
Discontinuance or closure of a business.
Transfer of business, amalgamation, merger, de-merger, lease, or other pertinent reasons.
Change in the constitution of business which results in a change of PAN.
Turnover reduces below the threshold limit of GST registration.
Death of the sole proprietor.
Voluntarily cancelling a GST registration can save the business owner from the unnecessary hassles of filing GST returns each month and payment of penalty or late-filing fee.
Cancellation by GST Officer
An officer can initiate the cancellation of a GST registration under GST if the Officer has justification to cancel the GST registration. The proceedings for GST Cancellation by Officer will begin by issuing a show-cause notice in Form GST REG-17.
A GST officer can start the cancellation process if any of the following events occur.
If a taxpayer has failed to file GST returns continuously.
An assessee registered for GST voluntarily but did not start a business within six months.
The registered taxpayer has broken one or more sections of the GST Act or its Rules.
The GST registration is obtained through deception or malicious misrepresentation.
To dodge tax or improperly claim the input tax credit, a taxpayer supplies goods or services without an invoice or produces an invoice without a provision of goods or services.
In case of cancellation by the GST Officer, the Officer would notify the taxpayer whose GST registration is liable to be terminated before cancellation. The taxpayer would then be given a reasonable opportunity to be heard before their GST registration is cancelled.
Procedure for GST Registration Cancellation
can help taxpayers cancel their GST registration online. Before beginning the process, the taxpayer must file all overdue GST returns. If there is non-compliance with the GSTR-3B, GSTR-1, or GST annual return, the late return must be filed before the GST cancellation process can begin.
The procedure for GST registration cancellation is as follows:
GST cancellation application is submitted using Form GST REG-16 on the common GST portal. The following information must be included in the GST cancellation application.
Contact address, which includes the mobile number and e-mail address.
Reason for cancellation.
The desired date of cancellation.
Particulars of the value and the tax payable on the stock of inputs, the inputs available in semi-finished goods, inputs available in finished goods, and the stock of capital goods/plant and machinery.
Particulars of the latest GST return are filed by the taxpayer along with the ARN of the particular return.
The GST Officer has to review the application and issue an order cancellation in the Form GST REG-19 within 30 days from the application’s date. The cancellation will be effective from a date determined by the Officer, and he will notify the taxable individual.
Final Return
Once GST registration is cancelled, the person or entity must file a final GST return on Form GSTR-10 within three months of the cancellation date or the date of the cancellation order, whichever comes first.
Other Considerations
Before starting the GST cancellation process, the applicant must pay any overdue GST liabilities. Furthermore, the taxpayer must remit the input tax in the stock of inputs, semi-finished goods, finished goods, and capital goods, or the output tax liability of such goods, whichever is larger.
GST electronic credit or cash ledger can be used to make the final GST payment. The final payment can be made at the same time that the final GSTR-10 return is being filed.
If the concerned Officer decides to reject the application, they will provide an intimation in writing to the applicant regarding the discrepancy’s nature. The applicant must respond to the same within seven days of the date of receipt of the letter. If the applicant fails to do the same, he may reject the application after providing him/her with an opportunity to be heard.
Revocation of GST cancellation means that the cancellation decision has been overturned, and the registration remains valid. This only applies when a tax officer cancels a taxable person’s registration on his initiative. A taxpayer can apply within thirty days of receiving the cancellation order for revocation of the order.
Benefits of Voluntary GST Cancellation
If no business activity occurs after acquiring GST registration, the taxpayer must begin the GST cancellation process as outlined. If a taxpayer stops filing GST returns and allows his GST registration to lapse, he will be unable to apply for fresh GST registration using the same PAN.
As a result, once a GST registration is received, the taxpayer must keep track of compliance. Hence, if there is no commercial activity, apply for GST registration cancellation as soon as possible.
If you need help cancelling your GST registration, consult a GST expert. We’ll check your GST return filing status, assist you in completing any outstanding GST returns, and file for GST cancellation
Documents Required:
- PAN Card
- Aadhar Card
- Last Return Details