Cancellation of GST Registration

Cancellation of GST registration is possible in three situations. First when you are not falling under the GST threshold limit on the later stage of your business. Secondly when you are shutting down your business. Lastly when you did something against the GST law and now as per the law department wants to cancel your GST registration. A taxpayer does not remain a registered person once his/her cancellation of registration under GST happens . After cancellation, the person does not require paying or collecting GST or claiming the credit of input tax and need not file the GST returns.

Consequences of Cancellation of GST Registration

The consequences of cancellation of registration under GST are discussed below:

• Once canceled, the person is no longer liable to collect GST or file GST returns.
• Any remaining Input Tax Credit (ITC) cannot be claimed after cancellation.
• Final GST return needs to be filed within a specified period after cancellation.
• Any dues, penalties, or liabilities must be settled before cancellation.
• Cancellation may lead to scrutiny and potential audits by tax authorities.
• Ineligibility for interstate transactions and benefits under GST laws.
• Option to reapply for registration if business circumstances change.

Who can Cancel the GST Registration and Why?

With reference to Section 29 (1) & (2) of the GST Act of 2017, cancellation of GST registration can be done by the following:

Procedure for Cancellation of GST Registration

Step by step procedure for cancellation of GST Registration for different type of cancellation is given below:

Cancellation By Migrated Taxpayers

• Step 1: Open your web browser and go to the GST portal.
• Step 2: Enter your username and password, and click Login.
• Step 3: Once logged in, find and click on the “Services” tab from the main menu. Under the “Services” menu, select “Registration” and Click on “Cancellation of Provisional Registration”.
• Step 4: You will be directed to the cancellation page. On this page, the name of your business and GSTIN will appear automatically.
• Step 5: Select the reason for cancellation from the provided options. This could include reasons such as discontinuation of business, change in the business constitution, etc.
• Step 6: Indicate whether any tax invoices were issued during the month you are applying for cancellation. Fill in the required details of the authorized signatory, including their name, designation, and contact information.
• Step 7: For Proprietorship or Partnership Firms choose EVC (Electronic Verification Code) as the signature method and for LLPs (Limited Liability Partnerships) and Companies choose DSC (Digital Signature Certificate) as the signature method.
• Step 8: Review all the entered information carefully and click “Submit” to complete the cancellation process. After submission, you will receive an acknowledgment for the cancellation request.
• Step 9: The GST authorities will process your application and issue a cancellation order. Regularly check the GST portal for updates on the status of your cancellation request.
• Step 10: Ensure that you have filed all necessary final returns and cleared any pending dues to complete the cancellation process.

Cancellation by Legal Heirs

• Step 1: Access the GST portal and log in using your credentials.
• Step 2: Go to “Services” > “Registration” > “Cancellation of Provisional Registration”.
• Step 3: Complete and submit Form GST REG-16 online with the reason for cancellation and other required details.
• Step 4: The GST officer may request additional documents for verification. Provide these as needed.
• Step 5: After processing, you will receive the cancellation order in Form GST REG-19.
• Step 6: File Form GSTR-10 within three months from the date of cancellation. This includes outstanding tax liabilities settling.
• Step 7: Maintain records of all documents and transactions related to GST as required by law.

Cancellation by Tax Officer

• Step 1: The tax officer will issue a show cause notice under Form GST REG-17 towards the taxpayer.
• Step 2: The response is to be made by the taxpayer under Form GST REG-18 providing the statement of response.
• Step 3: The concerned taxpayer must be given an opportunity for a fair hearing.
• Step 4: Under the final process, there shall be an order of cancellation of GST under Form GST REG-19.
• Step 5:Any other final return needs to be made under Form GSTR-10.
• Step 6: To maintain all the records even after cancellation of GST.

Cancellation By Taxpayers other than Migrated Taxpayers

• Step1: Submit Form GST REG-16 online with details of goods, reasons for cancellation, and last tax returns.
• Step2: Provide any additional documents requested by the GST officer.
• Step3: The GST officer will approve or reject the cancellation application.
• Step4: Submit Form GSTR-10 within three months from the date of cancellation and settle any tax liabilities.
• Step5: Keep all GST-related records post-cancellation.

Forms Required for Cancellation of GST Registration

Some of the key Forms with respect to cancellation of GST registration are:

Revocation of Cancellation of GST Registration

Time Limit for Cancellation of GST Registration

For different kind of cancellation there will be different time limit for cancellation of GST registration as prescribed in the table given below:

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Conclusion

GST registration can be canceled if a business falls below the threshold, shuts down, or violates GST laws. Once canceled, the business stops collecting GST, filing returns, and claiming input tax credits. Final returns and settling any dues are required. Cancellation of GST registration can be initiated by the taxpayer, a tax officer, or legal heirs. If needed, businesses can apply for revocation within 30 days to restore their GST registration.

Frequently Asked Questions (FAQs)