GST Registration Cancellation
A GST registration obtained in India can be cancelled by the registered person or by GST Officer or by the legal heirs of the registered person, in case of death of the person registered under GST. GST registration cancellation is different from GST Registration amendment.
Agencer can help you cancel a GST registration in India through an online process.
Who can cancel a GST registration?
GST registration can be cancelled by a GST officer or voluntarily by the person registered under GST.
A GST registration granted to a person can be cancelled by an Officer, if:
- The taxable person under GST does not conduct any business from the declared place of business; or
- Issues invoice or bill without supply of goods or services in violation of the GST Act and/or GST rules.
- If a person having GST registration has continuously not filed GST returns for six months.
Before the cancellation of registration, the Officer would issue a notice to such person whose GST registration is liable to be cancelled, 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 cancelled.
Completely managed GST registration cancellation service with Expert Support. Applicable for entities with no activities.
Completely managed GST registration cancellation service with Expert Support and filing of last GST return.
Completely managed GST registration cancellation service with Expert Support, filing of last GST return and responding to any notice.
Voluntary cancellation by the registered person
Under Section 29 of the CGST Act, a GST registration cancellation can be initiated by the person registered under GST in the following circumstances:
- 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 for GST registration.
- Death of the sole proprietor.
- Any other reason, the likes of which must be proved in the application.
Before applying for GST cancellation
Before applying for GST registration cancellation, the taxpayer must file all the GST returns up to date. In case there is non-compliance with respect 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. In the GST cancellation application, the registered person must provide the following information:
- 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, the stock of capital goods/plant and machinery.
- Particulars of registration of the entity wherein the existing unit have been merged, amalgamated, or transferred.
- Particulars of the latest GST return filed by the taxpayer along with the ARN of the particular return.
Final GST payment
While applying for GST cancellation, the applicant is mandated to pay any overdue GST liability as per the GST returns filed. In addition, the input tax contained in the stock of inputs, semi-finished goods, finished goods, and capital goods or the output tax liability of such goods – whichever is higher must be remitted by the taxpayer. The input tax credit on the existing stock must be paid back, as the taxpayer would not be ineligible to claim ITC on cancellation of GST registration.
The final GST payment can be made through the GST electronic credit or cash ledger. The final payment can also be made during the submission of filing of final GSTR-10 return.
Grounds of non-acceptance of cancellation application
On submission of the GST cancellation application, the application can be approved, and the GST registration would stand cancelled on the date mentioned in the order. In some cases, the concerned Officer may decide against accepting the application if:
- The submitted application is incomplete.
- In the event of transfer, merger or amalgamation of business, the new entity hasn’t registered with the tax authority prior to the submission of application.
In these situations, the concerned Officer provides a written intimation to the applicant regarding the nature of the discrepancy. In which case, the applicant is required to respond to the same within seven days of the date of receipt of the letter, failing which the concerned Officer may reject the application after providing him/her with an opportunity to be heard.
GSTR-10 final GST return
Every person whose registration has been cancelled are 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 done to ensure that the taxpayer is devoid of liabilities. It may 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 final GST return is not filed in Form GSTR-10, the taxpayer will be issued a notice in GSTR-3A, prompting him/her to do the same within 15 days of the issue of such notice. If the taxpayer fails to comply with the notice, initiatives will be taken to assess the liability of the taxpayer based on the information available with the concerned Officer. The assessing order will be withdrawn if the applicant files the return within 30 days of the issue of notice.
Consequences of not cancelling GST registration
After obtaining GST registration, if there is no business activity, the taxpayer needs to initiate GST cancellation as per the process laid out above. If the taxpayer stops filing GST returns and lets the GST registration to be cancelled by the GST department, then he or she would not be eligible to obtain another GST registration under the same PAN.
Also, in case a GST registration gets cancelled by the Government, the taxable person would first have 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 is vital for the taxpayer to monitor compliance, and in case of no business activity, file for cancellation of GST registration at the earliest.