GST Registration Cancellation

As per Section 29 of CGST Act, 2017, one can opt for a GST registration cancellation in Form Reg-16 in cases such as shutting down of business etc. or due to a cancellation by GST officer. Let’s get to know briefly about the process.

What is GST Registration Cancellation?

This means that that the person who has applied for the GST Registration Cancellation will no longer remain a GST registered person. The consequences lead to

  • No payment or collection of GST
  • No claiming for input tax credits or GST returns.

What happens after GST Registration Cancellation?

  • The taxpayer is not required to pay taxes anymore.
  • Business cannot be continued after the cancellation since in most of the cases it is an offense under GST and high penalties maybe charged.

What are the causes of Cancellation of Registration?

When requested by a taxpayer

  • In case business has been discontinued or fully transferred, amalgamated, demerged or disposed of
  • In case of the change of constitution of business.
  • When the taxable person is no longer liable to be registered.
  • When requested by legal heirs, in case of the demise of the taxpayer.

When Cancelled by GST Officer

  • In case business is not conducted from the declared place of business
  • In case invoices are issued without any supply of goods or services
  • In case of violation of Section 171 of the Act
  • In case person registered under section 10 i.e. composition scheme has not furnished returns for 3 consecutive tax periods
  • In case registered person (other than composition scheme) has not furnished returns for a continuous period of 6 months
  • In case a person has taken voluntary registration and not commenced business within 6 months
  • In case registration is obtained by means of fraud, wilful misstatement or suppression of facts

How to cancel GST Registration?

Migrated taxpayers:

  • After logging into the GST portal, click on ‘Cancellation of Provisional Registration’.
  • After you see the cancellation page, you have to provide a reason for the cancellation.
  • Next, fill up the details of authorized signatories and place.
  • Finally, you need to sign off with EVC if you are a proprietorship or a partnership. LLPs & Companies must mandatorily sign with DSC.

Other than Migrated taxpayers:

  • The cancellation application should be made in the GST REG-16 form.
  • The above form must include the details of inputs, finished and semi-finished goods held in stock on the date of which the registration cancellation is applied. It should also include the liability thereon and the details of the payment.
  • The proper officer will need to issue an order for cancellation in the GST REG-19 form within 30 days from the date of application. The effective date of cancellation will be determined by the officer and the taxable person will be notified.

Tax officer:

  • If the officer has the proper reasons to cancel a taxpayer's registration, then he will have to send a show cause notice to the particular person in GST REG-17 form.
  • The person must respond in REG-18 form within a week or 7 days from the date of service of notice as to why his registration shouldn’t be cancelled.
  • If the response is satisfactory, then the officer will discontinue the proceedings and pass an order in GST REG-20 form.
  • If the response is not satisfactory, then the officer will issue an order in GST REG-19 form. The reply will be sent to the show cause within 30 days from the date of reply.

Revocation of Cancellation

  • Revocation of cancellation of registration refers to the decision to cancel the registration that has been reversed and the validation of the registration is available. This is applicable only if the officer has cancelled the registration of a taxable person on his own motion. Registered person shall apply to such officer for revocation of cancellation in Form REG-21 within 30 days from the date of cancellation.
  • After the filing of the delayed GST returns and the payment of the penalty, an application can be created by a taxpayer for revocation of cancellation of the registration if the cancellation is caused due to failure of furnishing returns.
  • The GST Officer then verifies the reasons for the revocation of cancellation of registration, and if the reasons for revocation of cancellation of registration are satisfactory, he can revoke the cancellation of registration and if not found satisfactory he may reject the application in Form REG-05.

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