GST Registration Cancellation

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 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.

The notice to the taxpayer from the GST Officer would be sent in Form GST REG-17 with specific reasons why the GST registration should be cancelled. The notice would also allow the taxpayer to respond to the notice and have a date and time if a hearing is scheduled.

If the taxpayer responds to the notice and the proper authority is satisfied with the response, he or she may dismiss the case and issue an order in Form GST REG-20. If he is not satisfied, he may issue a Form GST REG-19 order cancelling the GST registration.

Procedure for GST Registration Cancellation

Startupflora 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.

Step 1: 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.

Step 2: The GST Officer has to review the application and issue an order cancellation in 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.

Consult and startupflora GST Expert if you have a GST registration you want to cancel. We'll check your GST return filing status, assist you in completing any outstanding GST returns, and file for GST cancellation.

We will also monitor your GST registration cancellation application, reply to any questions, and assist you in completing the process once you have submitted it.

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, within three months of the date of cancellation or the date of the cancellation order, whichever is later.

This is done to make sure the taxpayer has no GST dues pending. This provision does not apply to input service distributors or non-resident taxpayers who must pay tax under Sections 10, 51, or 52.

If the final GST return is not filed in Form GSTR-10, the taxpayer will receive a notice in Form GSTR-3A requiring him or her to do so within 15 days after the notice's issuance.

If the taxpayer ignores the notice, steps will be made to determine the taxpayer's liability using the facts available to the concerned Officer. The assessment order will be cancelled if the applicant files the return within 30 days of receiving the notice.

Preparing to Cancel GST Registration

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.

The input tax credit on the current stock must be repaid, as the taxpayer will no longer be eligible to claim ITC if the GST registration is cancelled.

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.

Rejection of application for GST cancellation

In some instances, the concerned Officer may decide to reject the application for the following reasons.

• The submitted application is incomplete.
• In the transfer, merger, or amalgamation of business, the new entity has not registered with the tax authority before applying.

In such circumstances, the concerned Officer provides 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

An application for revocation in Form GST REG-21 must be filed within 90 days of the cancellation order. On sufficient cause, this period can be extended by up to 180 more days with approval from senior officers.

Voluntary vs Officer-Initiated GST Cancellation

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.

Further, if the government cancels a GST registration, the taxable person must first apply for the cancellation to be revoked by paying any late fees. Following the restoration, appropriately cancel the GST or continue filing GST returns.

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.

Documents Required for GST Cancellation

GST Login

GSTIN credentials for the common portal, plus the registered mobile number and email for OTP verification while you submit Form REG-16.

Stock Details

The value of inputs, semi-finished goods, finished goods and capital goods held on the cancellation date, along with the tax payable on them.

Return ARN

The ARN of the latest GST return filed. All pending GSTR-1 and GSTR-3B returns must be filed before you apply.

Closure Proof

Supporting proof of the reason for cancellation, such as a closure resolution, merger or transfer documents, or a death certificate for a sole proprietor.

Penalties for Not Filing GSTR-10

The late fee is ₹200 per day (₹100 CGST + ₹100 SGST), capped at ₹10,000. If the return is still not filed after a GSTR-3A notice, the officer can assess your liability on a best-judgement basis.

FAQs

Can I cancel GST registration with pending returns? No. You must file all pending returns and pay any dues before submitting Form REG-16.

How long does GST cancellation take? The officer must pass an order within 30 days of the application.

Is GSTR-10 mandatory after cancellation? Yes, for normal taxpayers. Composition taxpayers, ISDs and non-resident taxpayers are exempt.

Can I get a new GST number on the same PAN? Yes, after the cancellation is complete. A suo-moto cancellation may need to be revoked or settled first.

Is there any government fee for GST cancellation? No. Filing REG-16 is free. Only pending taxes and late fees apply.