GST Registration Cancellation
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Completely managed GST registration cancellation service with Expert Support. Applicable for entities with no activities.
Basic
- GST LUT Form for Exporters.
Basic
- GST LUT Form for Exporters.
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GST Cancellation
GST registration can be voluntarily canceled if a business is dormant or if it does not meet the necessary turnover requirements. Additionally, a GST officer can cancel GST registration if the business is non-compliant with GST regulations. Once GST registration is canceled, the person or entity is no longer obligated to file GST returns or collect/paGST.
Voluntary GST Cancellation
To cancel GST registration, a person or entity with GST registration must submit a cancellation request to the GST Department using Form GST REG-16. After reviewing the application, if the GST Officer is satisfied with the request, they will issue an order to terminate GST registration in Form GST REG-19. This process ensures proper and authorized cancellation of GST registration when necessary.
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 canceling a GST registration can indeed alleviate the administrative burden on a business owner, as it eliminates the requirement to file GST returns regularly and avoid any potential penalties or late-filing fees associated with non-compliance. This option is useful for businesses that no longer meet the registration criteria or have ceased operations, allowing them to simplify their tax responsibilities.
Cancellation by GST Officer
An officer can initiate the cancellation of a GST registration if there is justification for such action. The process for GST cancellation by an officer typically begins with the issuance of a show-cause notice in Form GST REG-17. This notice provides the taxpayer with an opportunity to respond and present their case before any further action is taken in the cancellation proceedings.
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 the event of GST registration cancellation by a GST Officer, the officer will notify the taxpayer whose registration is liable to be terminated. The taxpayer will then be granted a reasonable opportunity to present their case before the GST registration is officially canceled. The notice to the taxpayer from the GST Officer will be sent in Form GST REG-17 and will outline the specific reasons for the proposed cancellation. It will also provide the taxpayer with the opportunity to respond to the notice and, if necessary, schedule a date and time for a hearing.
If the taxpayer responds to the notice, and the proper authority is satisfied with the response, they may dismiss the case and issue an order in Form GST REG-20. However, if the authority is not satisfied, they may proceed with the cancellation and issue an order in Form GST REG-19, officially canceling the GST registration. This process ensures that the taxpayer has a chance to provide a defense before any cancellation is made final.
Procedure for GST Registration Cancellation
IndiaFilings can assist taxpayers with the online cancellation of their GST registration. However, before initiating the cancellation process, it's essential for the taxpayer to ensure that all overdue GST returns are filed. Non-compliance with returns like GSTR-3B, GSTR-1, or the GST annual return should be rectified by filing the late returns before proceeding with the GST cancellation process. Compliance with these filing requirements is a necessary step before canceling GST registration.
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 IndiaFilings 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.
Final Return
After the cancellation of GST registration, the person or entity is required to file a final GST return using Form GSTR-10 within three months of the cancellation date or the date of the cancellation order, whichever comes first. This ensures that the taxpayer has no pending GST dues. It's important to note that this provision does not apply to input service distributors or non-resident taxpayers who are required to pay tax under Sections 10, 51, or 52 of the GST Act.
If the taxpayer fails to file the final GST return in Form GSTR-10, they will receive a notice in Form GSTR-3A, requiring them to do so within 15 days after the notice is issued. If the taxpayer disregards the notice, the concerned Officer will take steps to determine the taxpayer's liability using available information. However, if the taxpayer files the return within 30 days of receiving the notice, the assessment order will be canceled. This emphasizes the importance of complying with the requirement to file the final GST return within the specified timeframe.
Preparing to Cancel GST Registration
Before initiating the GST cancellation process, the applicant is required to settle any outstanding GST liabilities. Additionally, the taxpayer must clear the input tax on the stock of inputs, semi-finished goods, finished goods, and capital goods or the output tax liability of such goods, depending on which is larger.
It's crucial to note that the input tax credit (ITC) on the current stock must be repaid, as the taxpayer will no longer be eligible to claim ITC once the GST registration is canceled.
The final GST payment can be made using the GST electronic credit or cash ledger. This payment should be completed at the same time the final GSTR-10 return is being filed, ensuring that all outstanding tax liabilities are addressed before the GST registration is canceled.
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 cases where a discrepancy is identified, the concerned Officer will issue a written intimation to the applicant, outlining the nature of the discrepancy. The applicant is required to respond to this intimation within seven days from the date of receipt of the letter. Failure to provide a response within the stipulated timeframe may result in the Officer rejecting the application. However, the applicant will be given an opportunity to be heard before the rejection is finalized, ensuring a fair process.
Revocation of GST Cancellation
Revocation of GST cancellation is a process by which the cancellation decision is reversed, and the registration remains valid. This option is available when a tax officer initiates the cancellation of a taxable person's registration. The taxpayer can apply for revocation within thirty days of receiving the cancellation order. Here are the steps to file for revocation of GST cancellation:
If a registered person's registration has been canceled suo-moto by the proper Officer, an application for revocation of cancellation in Form GST REG-21 can be filed within 30 days of the cancellation order.
If the GST Officer is satisfied with the application, they can revoke the cancellation of registration within 30 days of receiving the application by issuing an order in Form GST REG-22. The reasons for registration revocation or cancellation must be documented in writing.
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 make a decision within 30 days of receiving the applicant's clarification in Form GST REG-24.
This process ensures that the taxpayer has an opportunity to present their case and seek the revocation of the cancellation order within a specified timeframe.
Benefits of Voluntary GST Cancellation
If no business activity occurs after obtaining GST registration, it's essential for the taxpayer to initiate the GST cancellation process as outlined. Allowing GST registration to lapse by not filing GST returns can have implications, as the taxpayer will be unable to apply for fresh GST registration using the same PAN. Furthermore, 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, they can proceed to either properly cancel the GST registration or continue filing GST returns. Therefore, once a GST registration is obtained, it's crucial for the taxpayer to maintain compliance and, if there is no commercial activity, apply for GST registration cancellation promptly to avoid any adverse consequences. This ensures that the taxpayer's GST status remains in good standing and aligns with their business activities.
| Features | Proprietorship | Partnership | LLP | Company |
|---|---|---|---|---|
| Definition | Unregistered type of business entity managed by one single person | A formal agreement between two or more parties to manage and operate a business | A Limited Liability Partnership is a hybrid combination having features similar to a partnership firm and liabilities similar to a company. | Registered type of entity with limited liability to the owners and shareholders |
| Ownership | Sole Ownership | Min 2 Partners Max 50 Partners | Designated Partners | Min 2 Shareholders Max 15 Directors Max 200 Shareholders 1 Director 1 Nominee Director |
| Registration Time | 7-9 working days | |||
| Promoter Liability | Unlimited Liability | Limited Liability | ||
| Documentation | Partnership Deed | LLP Deed Incorporation Certificate | ||
| Governance | – | Under Partnership Act | LLP Act, 2008 | Under Companies Act,2013 |
| Transferability | Non Transferable | Transferable if registered under ROF | Transferable | |
| Compliance Requirements | Income tax filing if turnover is more than Rs.2.5 lakhs | ITR 5 | ||
Frequently Asked Questions
BMCS India offers comprehensive business consultancy services, including strategy development, market research and analysis, financial advisory, operational optimization, and organizational transformation. We provide customized solutions to help businesses address challenges and achieve their growth objectives.
BMCS is the top most business management consultant all around the world. Our team of experienced consultants leverages industry knowledge, market insights, and proven methodologies to provide tailored solutions that align with your business goals. Whether you need assistance with market entry, strategic planning, process optimization, or talent management, we collaborate closely with you to understand your unique needs
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To get started with BMCS India, simply reach out to us through our contact information on our website. We will be glad to schedule an initial consultation to understand your business requirements and discuss how our services can benefit you. From there, we will work together to develop a tailored plan to drive your business success.