GST Cancellation


GST Registration Cancellation - GST Cancellation

A GST registration can be canceled at any time due to various reasons like business closure, transfer of business or change of constitution.

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Cancel GST Registration

A GST registration obtained in India is often canceled by the registered person or by GST Officer or by the legal heirs of the registered person, just in case of death of the person registered under GST. GST registration cancellation is different from the GST Registration amendment.

Who can cancel a GST registration?

GST registration are often canceled by a GST officer or voluntarily by the person registered under GST.

A GST registration granted to an individual is often canceled by a politician, if:

  • The taxable person under GST doesn’t conduct any business from the declared place of business; or
  • Issues invoice or bill without supply of products or services in violation of the GST Act and/or GST rules.
  • If an individual having GST registration has continuously not filed GST returns for 6 months.

Before the cancellation of registration, the Officer would issue a notice to such person whose GST registration is susceptible to be canceled, requiring show cause within seven working days from the date of service of such notice. The registered person can reply to the show cause notice within the prescribed time, or the GST registration can stand canceled.

GST Cancellation Process - GST Cancellation

Voluntary cancellation by the registered person

Under Section 29 of the CGST Act, a GST registration cancellation are often initiated by the person registered under GST within the following circumstances:

  1. Discontinuance or closure of a business.
  2. Transfer of business, amalgamation, merger, de-merger, lease or other pertinent reasons.
  3. Change within the constitution of business, which ends up during a change of PAN.
  4. Turnover reduces below the edge limit for GST registration.
  5. Death of the only proprietor.
  6. Any other reason, the likes of which must be proved within the application.

Before applying for GST cancellation

Before applying for GST registration cancellation, the taxpayer must file all the GST returns up so far. just in case there’s non-compliance with reference to GSTR-3B return or GSTR-1 return or GST annual return, the overdue returns must be filed before initiating the GST cancellation process.

Applying for GST cancellation

An application for GST cancellation should be made in Form GST REG-16 on the common GST portal. within the GST cancellation application, the registered person must provide the subsequent information:

  1. Contact address, which incorporates the mobile number and e-mail address. Reason for cancellation.
  2. The desired date of cancellation.
  3. Particulars of the worth and therefore the tax payable on the stock of inputs, the inputs available in semi-finished goods, inputs available in finished goods, the stock of capital goods/plant and machinery.
  4. Particulars of registration of the entity wherein the prevailing unit are merged, amalgamated, or transferred.
  5. Particulars of the newest GST return filed by the taxpayer alongside the ARN of the actual return.

Final GST payment

While applying for GST cancellation, the applicant is remitted to pay any overdue GST liability as per the GST returns filed. additionally, the input tax contained within the stock of inputs, semi-finished goods, finished goods, and capital goods or the output liabilities of such goods – whichever is higher must be remitted by the taxpayer. The input decrease on the prevailing stock must be paid back because the taxpayer wouldn’t be ineligible to say ITC on the cancellation of GST registration.

The final GST payment is often made through the GST electronic credit or cash ledger. the ultimate payment also can be made during the submission of filing of ultimate GSTR-10 return.

Grounds of non-acceptance of cancellation application

On submission of the GST cancellation application, the appliance is often approved, and therefore the GST registration would stand canceled on the date mentioned within the order. In some cases, the concerned Officer may decide against accepting the appliance if:

  1. The submitted application is incomplete.
  2. In the event of transfer, merger or amalgamation of business, the new entity hasn’t registered with the tax authority before the submission of application.

In these situations, the concerned Officer provides a written intimation to the applicant regarding the character of the discrepancy. during which case, the applicant is required to reply to an equivalent within seven days of the date of receipt of the letter, failing which the concerned Officer may reject the appliance after providing him/her with a chance to be heard.

GSTR-10 final GST return

Every person whose registration has been canceled is required to file a final GST return in Form GSTR-10 within three months of the date of cancellation or the date of order of cancellation, whichever is later. this is often done to make sure that the taxpayer is barren of liabilities. it’s going to be noted that Input Service Distributors or non-resident taxpayers who are required to pay tax under section 10, section 51 or section 52 are exempted from this provision.

If the ultimate GST return isn’t filed in Form GSTR-10, the taxpayer is going to be issued a notice in GSTR-3A, prompting him/her to try to an equivalent within 15 days of the difficulty of such notice. If the taxpayer fails to suits the notice, initiatives are going to be taken to assess the liability of the taxpayer-supported the knowledge available with the concerned Officer. The assessing order is going to be withdrawn if the applicant files the return within 30 days of the difficulty of notice.

Consequences of not cancelling GST registration

After obtaining GST registration, if there’s no commercial activity, the taxpayer must initiate GST cancellation as per the method laid out above. If the taxpayer stops filing GST returns and lets the GST registration to be canceled by the GST department, then he or she wouldn’t be eligible to get another GST registration under an equivalent PAN.

Also, just in case a GST registration gets canceled by the govt, the taxable person would first need to apply for revocation of GST registration cancellation by paying all the late fees (which could run into lakhs) and after restoration – cancel the GST properly or continue filing GST returns. Hence, once a GST registration is obtained, it’s vital for the taxpayer to watch compliance, and just in case of no commercial activity, file for cancellation of GST registration at the earliest.


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