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.
Advice House can help you cancel a GST registration in India through an online process.
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:
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.
Under Section 29 of the CGST Act, a GST registration cancellation can be initiated by the person registered under GST in the following circumstances:
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.
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:
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.
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:
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.
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.
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.
In case you have a GST registration that you would like to surrender, consult an Advice House GST Expert. We will verify the status of GST return filing, help you file any overdue GST returns and file for cancellation of GST. Also, on submission of GST registration cancellation application, we will monitor the application, respond to any queries raise and help you complete the process.