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How to Cancel GST Registration?

How to Cancel GST Registration

How to Cancel GST Registration?

If the GST regulations do not apply to you, if you’re closing down your business or profession, or even if the tax authority requires it, you can Cancel GST registration process. This article overviews the various cancellation scenarios and the corresponding procedures. Knowing the necessary steps and forms is essential to ensure smooth cancellation.

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Definition Cancellation of GST Registration

Cancellation of GST registration denotes that the individual or entity is no longer recognized as a registered taxpayer under GST. As a result, they are no longer obligated to collect, remit, or pay GST, nor can they claim input tax credits. Additionally, they are exempted from the requirement to file GST returns.

Who is Eligible for GST cancellation?

Under the GST framework, both a taxpayer and an official officer have the authority to commence the process of canceling a GST registration. If an official officer deems it necessary to begin the cancellation process, they can issue a show-cause notice using the GST REG-17 form.

Requested by the Taxpayer

The individual or entity holding the GST registration can initiate the cancellation process voluntarily if they believe they no longer need to be registered under GST or meet certain conditions for cancellation.

By Tax Officers

Tax officials can cancel a GST registration if they determine that the taxpayer is not complying with the regulations or if there are discrepancies in the taxpayer’s conduct or submissions.

Requested by Legal Heirs

In the event of a taxpayer’s demise, the legal heirs can request the cancellation of the deceased’s GST registration.

Who Cannot File for GST Cancellation?

  • Tax Deductors / Tax Collectors: Those explicitly registered for deducting or collecting taxes cannot apply for cancellation.
  • Unique Identity Number (UIN) Holders: Entities or individuals, typically foreign diplomatic missions, UN bodies, etc., who have been allotted a UIN cannot file for the cancellation of GST registration. The UIN is given to them to claim a refund of taxes on their inward supplies.

Conditions When GST Registration can be Cancelled

The GST Registration can be cancelled

Tax Officer – Suo Moto Cancellation

A tax officer can initiate the cancellation of GST registration in certain situations, including:

  • The taxpayer isn’t conducting business from their registered place of business.
  • The taxpayer is issuing tax invoices without actually selling any goods or services.
  • There are violations of the provisions of the act or the rules set out by the GST Council.
  • GST Registration was procured through fraudulent means or by misstating facts.
  • A taxpayer under the regular scheme has yet to file returns for six consecutive months.
  • A taxpayer under the Composition Scheme hasn’t filed returns for three successive tax periods.

Taxpayer – Voluntary Cancellation

A registered taxpayer can voluntarily seek cancellation of their GST registration under these circumstances:

  • The taxpayer has discontinued or closed their business operations.
  • The business has been transferred because of amalgamation, merger, de-merger, sale, lease, etc.
  • There’s a change in the business structure, which leads to a change in PAN (like a proprietorship being converted into a private limited company).
  • The taxpayer has voluntarily registered but has yet to start business operations within a specified timeframe.
  • A taxable individual isn’t required to be registered under the GST Act.
  • The taxpayer is no longer liable to pay tax.

If someone has registered voluntarily, they can apply for cancellation only after a year has passed since the registration date.

Legal Heirs

In the unfortunate event of the death of a sole proprietor, the legal heirs have the authority to apply for the cancellation of the GST registration for the proprietorship firm.

Consequence of  Cancellation of GST Registration

  • No GST Payments: The taxpayer must no longer pay GST once the GST registration is canceled.
  • Mandatory Registration: Some businesses are obligated to be registered under GST. If they cancel their GST registration but continue to operate, it violates GST regulations and can result in severe penalties.

Forms Used to gst cancellation:

  • GST REG 16: This form is relevant when a taxpayer, on their own initiative, applies for the cancellation of their GST registration. This form is applicable only if there’s no other consideration for the application and at least one year has elapsed since the original GST registration.
  • GST REG 17: This form is employed by an authorized GST officer to serve a show-cause notice regarding the potential cancellation of GST registration to the registered taxpayer or business entity. The process to cancel the registration by the officer commences after the issuance of the GST REG 17 form. Through this form, the officer poses a query to the taxpayer, asking why the registration should not be terminated.
  • GST REG 18: In response to the show cause notice served through the GST REG 17 form, the taxpayer or entity can reply using the GST REG 18 form. This reply, providing a defense or explanation against the potential cancellation, must be submitted within seven days of receiving the initial notice.
  • GST REG 19: This form is wielded by the GST officer to issue an order to cancel the GST registration formally. The timeline for issuing this order is within 30 days from either the date of the initial application or from the date of response received through the GST REG 18 form.
  • GST REG 20: If the officer is satisfied with the response to the show cause notice, they can decide to revoke any proceedings towards the cancellation of the registration. The decision is conveyed using the GST REG 20 form in such cases.

How to cancel GST registration on the GST Portal

The procedure to cancel the GST Registration on the GST portal is explained in detail below:

Access the GST Portal

  • First, navigate to the official GST Portal using your preferred web browser.
  • Once you’re on the portal’s homepage, locate the login section.

Login with Your Credentials:

  • Enter your registered username and password in the respective fields.
  • Click on the “Login” button to access your GST dashboard.

Navigate to the Cancellation Application:

  • On the dashboard, hover over or click on the “Services” option in the main menu.
  • From the dropdown, choose “Registration.” This will expand to show more options.
  • Click on “Application for Cancellation of Registration” to open the cancellation form.

Fill in the Details:

The cancellation form is divided into three sections: Basic Details, Cancellation Details, and Verification.

Basic Details Tab:

  • Address for Future Correspondence: Mention where you’d like to receive any correspondence related to this application.
  • Mobile Number: Enter the mobile number associated with the GST registration.
  • Email Address: Provide the email address where communication regarding this application can be sent

Cancellation Details Tab:

  • First, select the reason for the cancellation from the provided dropdown menu.
  • Depending on the reason chosen, additional fields might need to be filled. These can include details like the date of business closure, the date of business transfer, or any other relevant information.

Verification Tab:

  • Here, you need to authenticate the application’s information.
  • Choose the name of the authorized signatory from a dropdown list. This is typically the business owner or someone authorized to act on their behalf.
  • Specify the place (usually the city or town) where you’re filling out this declaration.
  • Authenticate the application using a Digital Signature Certificate (DSC) or an Electronic Verification Code (EVC). The method might vary based on the type of business entity.

Confirmation and Submission:

  • Review all details to ensure accuracy.
  • Once you’ve verified all the information, click the “Submit” button.
  • Upon successful submission, a success message will pop up on your screen, confirming the receipt of your cancellation application.

Tracking the Application:

  • Post-submission: it’s essential to keep track of the application’s status.
  • On the main dashboard, go to “Services”> “Registration”> “Track Application Status.”
  • Input your ARN (Application Reference Number) to view the current status of your cancellation request.

Procedure for GST cancellation by Tax Officer:

The officer issues a show-cause notice in GST REG-17.

  • The recipient must reply using GST REG-18 within seven days.
  • If the response is satisfactory, proceedings will be dropped, and an order will be issued in GST REG-20.
  • If not, a cancellation order in GST REG-19 will be issued within 30 days of the reply.

What will happen once registration is canceled?

The following things will happen once the tax official cancels the GST registration:

  • Taxpayers will be informed about the cancellation via SMS and email. A cancellation order in GST Form REG-17 will be sent to taxpayers. The order will also be available on the taxpayers’ dashboard to view, print and download.
  • Taxpayers cannot file a return or upload invoices for the period after the cancellation date. Also, the GST Practitioner (GSTP) will not carry out GSTP functions after the date of cancellation.
  • Taxpayers will not be able to change registration details after the issue of the cancellation order. But email and mobile numbers can be updated till all dues are cleared.
  • The status of GSTIN will change from ‘proceeding for cancellation initiated’ to ‘inactive,’ and the same will be informed to other concerned tax authorities.

Revocation of Cancellation

Revocation means overturning a prior decision. Here, it implies that the earlier decision to cancel GST registration is reversed, reinstating it.

Applicability: It’s relevant when the tax officer independently cancels a taxpayer’s registration. The taxpayer can appeal for revocation within 30 days of the cancellation order.

Procedure for Revocation

  • Apply GST REG-21 within 30 days of the cancellation order.
  • The officer can approve the revocation using GST REG-22 or reject it using GST REG-05.
  • Before rejection, a show-cause notice (GST REG-23) will be issued. The recipient must respond in GST REG-24 within seven days.
  • A final decision will be made within 30 days of receiving GST REG-24.

Note: An application for revocation isn’t valid if the cancellation was due to missed returns. Such returns must be filed first, along with all outstanding payments.

Can a Business Re-register for GST after Cancellation?

Yes. After cancellation, whether voluntary or by a tax officer, there’s no limitation against re-registering for GST.

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