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 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 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
IndiaBizFiling 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 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.
Consult an IndiaBizFiling 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.
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.
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
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. The following are the steps to file for revocation of GST cancellation:
If a registered person’s registration has been cancelled suo-moto by the proper Officer, an application for revocation of cancellation in form GST REG-21 can be filed within 30 days of cancellation order.
If the GST Officer is satisfied, he or she can rescind the cancellation of registration within 30 days of receiving the application by issuing an order in form GST REG-22. Reasons for registration revocation or cancellation must be documented in writing.
Further, the Officer can also issue an order in form GST REG-05 rejecting the revocation application and informing the applicant. However, before rejecting an application, the Officer must send the applicant a show-cause notice in GST REG–23, asking them to explain why the application should not be refused. Within seven working days of receiving the notice, the applicant must respond in form GST REG-24. The proper officer will decide within 30 days of receiving the applicant’s clarification in form GST REG-24.
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 Registration Cancellation
PAN card of the authorized signatory
Aadhaar card of the authorized signatory
Last Return Detalis
Details of the last return filed by the taxpayer
Company Authority Details
When an existing unit is merged, demerged, transferred
Tax is payable on stock of input and capital and input available on semi-finished and finished goods
GST Registration Cancellation FAQ’s
1. What is the time limit for taking registration under GST?
An entity liable to be registered under GST should apply for registration under GST within 30 days from the date on which the entity becomes liable to register for GST. Casual taxable persons and non-resident taxable persons are required to be registered under GST, prior to commencing business.
2. Can a business operate across India with just one GST number?
No. An entity operating in multiple states will have to get registered separately for each of the States from where a taxable supply of goods or services is made.
3. Can entities with one VAT or service tax apply for new GST registration?
The procedure has been provided in the GST portal for migration of existing service tax or VAT or central excise to GST. Entities registered under old tax laws must complete GST migration mandatorily to obtain GST.
4. Can I register for GST voluntarily?
Yes. Any entity wishing to claim input tax credit can be registered voluntarily, even if not liable to be registered. After registration, voluntarily registered entities will also have to comply with regulations as applicable to a normal taxable person.
5. Is PAN mandatory for registering under GST?
Yes. PAN is mandatory for normal taxpayers and casual taxable persons to be registered under GST. However, PAN is not mandatory for a non-resident taxable person for obtaining registration.
6. What is the validity of the GST certificate?
Once the GST certificate is granted, the registration is valid until it’s surrendered or cancelled, or suspended. Only GST certificates issued to non-resident taxable persons and casual taxable persons have a validity period.
7. Can an unregistered business collect GST from the Customers?
No, an unregistered person without GSTIN cannot collect GST from customers or claim an input tax credit of GST paid.
8. How long does it take to obtain GSTIN?
After submission of the GST application with all the required documents, GSTIN is allotted within 7 working days.
9. What is aggregate turnover?
Aggregate turnover is the aggregate value of all taxable supplies, exempt supplies, export of goods or services, or both and inter-State supplies of a person having the same PAN. Aggregate turnover does not include CGST, SGST, IGST, and GST cess.
10. How to get a GST certificate?
GST certificate is provided by the Government only in soft-copy format. Once GSTIN is allotted, the GST certificate can be downloaded from the GST Portal at any time by the taxpayer.