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How to Cancel GST Registration?
"GST registration is essential for legal business operations and unlocking tax benefits."
Cancel GST Registration
Cancellation of GST registration means that the taxpayer will no longer be considered a GST registered person. As a result, they will not be required to pay or collect GST, nor will they be able to claim input tax credits, and consequently, they will not need to file GST returns.
Who can Cancel GST Registration?
GST registration can be canceled either by the taxpayer or by the GST officer:
By the Taxpayer:
A registered taxpayer has the option to voluntarily apply for the cancellation of their GST registration. This can happen for several reasons, including the discontinuation of their business, transferring the business, changes in the business structure that necessitate a new registration, or if the taxpayer's turnover drops below the threshold limit for registration.
By the GST Officer:
• A GST officer has the authority to cancel a taxpayer's registration under certain conditions.
• If the taxpayer fails to comply with the rules and regulations set forth in the GST law, such as not submitting GST returns for multiple tax periods.
• If the registration was obtained through willful misrepresentation, fraud, or by hiding relevant facts.
• If the taxpayer breaches any provisions of the GST law.
Circumstances of Cancellation of GST Registration:
The cancellation proceedings can be initiated under the following circumstances:
• If a taxpayer registered under the composition scheme has not filed returns for three consecutive years.
• If a taxpayer, other than those under the composition scheme, fails to file returns for six consecutive periods.
• If an assessee has voluntarily registered for GST but has not commenced business within six months of registration.
• If the registered taxpayer has violated any provisions of the GST Act or the associated rules.
• If the GST registration was obtained through fraud or intentional misrepresentation.
• If a taxpayer provides goods or services without an invoice or issues an invoice without actually supplying goods or services to evade tax or improperly claim input tax credit.
• If a taxpayer does not pay tax, interest, or penalty to the GST department within three months of the due date for such payment.
• If the taxpayer has closed their business.
• In the event of the death of a sole proprietor.
• If there is a change in the taxpayer's constitution that results in a change of PAN.
• If the individual is no longer required to be registered under GST or to collect or pay tax.
• If there is a transfer of business due to merger or amalgamation.
Taxpayers Responsibilities Before Applying for Cancellation
• Filing Pending Returns: It is crucial to file all pending returns (such as GSTR-1, GSTR-3B, etc.) before you apply for cancelation.
• Paying Outstanding Taxes: Make sure that all taxes, interest, and penalties are settled before starting the cancellation process.
• Final Return (GSTR-10): Don’t forget to file the final GST return after your cancellation is processed.
Procedure for Cancellation of GST Registration
The steps to cancel GST registration are as follows:
• Application: Taxpayers can voluntarily apply for cancellation of their GST registration using Form GST REG-16 on the GST portal. If the GST authorities initiate the cancellation, they will issue a notice to the taxpayer through Form GST REG-17.
• Final Return: Once the GST registration is canceled, the taxpayer is required to file a final return using Form GSTR-10.
• Liabilities: The taxpayer remains responsible for settling any outstanding tax dues, including any GST liabilities that are pending up to the cancellation date.
Steps for Cancellation of GST Registration
Here’s a step-by-step guide to canceling your GST registration:
1. Login to the GST portal:
Start by navigating to the GST portal and logging in with your credentials at GST
2. Apply for the Cancellation:
Once logged in, head to the ‘Services’ tab. Select ‘Registration’ and then click on ‘Application for Cancellation of Registration’.
3. Fill the Details:
Provide the required information, including the reason for cancellation, the cancellation date, and details regarding the ITC of your inventory as of the cancellation date. If you have multiple businesses registered in the same state, specify which business the cancellation applies to.
4. Pay the Liability and File Return:
Ensure that all pending dues, including taxes, interest, or penalties, are paid. Additionally, file any outstanding returns up to the cancellation date.
5. Verification and Submission:
Verify the details in your application form using either a Digital Signature Certificate (DSC) or an Electronic Verification Code (EVC). After verification, submit the completed application.
6. ARN Generation:
After submission, an Acknowledgement Reference Number (ARN) will be generated. This ARN is important for tracking the status of your application in the future.
7. Officer’s Review:
A GST officer will review your cancellation application. They may request additional information through the GST portal, and it’s important to respond to any queries promptly.
8. Issue of Cancellation Order:
If the officer is satisfied with your application, they will issue a cancellation order using Form GST REG-19, which will include the effective date of your GST registration cancellation.
9. Final Return (Form GSTR – 10):
After obtaining the cancellation order, the taxpayer must submit the final return using Form GSTR-10 within 3 months from the date of cancellation or the date of the cancellation order, whichever is later.
What happens when registration is cancelled?
Once the tax official cancels the GST registration, the following will occur:
1. Taxpayers will receive notifications about the cancellation through SMS and email.
2. A cancellation order in GST Form REG-17 will be issued to taxpayers. This order will also be accessible on the taxpayers’ dashboard for viewing, printing, and downloading.
3. After the cancellation date, taxpayers will be prohibited from filing returns or uploading invoices. Additionally, GST Practitioners (GSTPs) will not be able to perform their functions post-cancellation.
4. Taxpayers will not have the ability to modify registration details after the cancellation order is issued. However, they can update their email and mobile number until all dues are settled.
5. The status of the GSTIN will change from ‘proceeding for cancellation initiated’ to ‘inactive’, and this will be communicated to other relevant tax authorities.
Revocation of Cancel GST Registration:
A registered individual whose registration has been canceled by the proper officer can apply to that officer for the revocation of the cancellation. This application must be made in the prescribed manner within 30 days from the date the cancellation order is served.
The proper officer has the authority to either revoke the cancellation of the registration or reject the application, but must first provide the applicant with an opportunity to present their case.
Steps to revoke the cancellation of GST registration:
Here are the steps for cancellation of GST registration -
• Log in to the GST portal with your credentials.
• Navigate to the ‘Services’ tab, choose ‘Registration,’ and then click on ‘Application for Revocation of Canceled Registration.’
• Complete the application form by entering the necessary details, including your reason for revocation, and attach any supporting documents.
• Once the application form is filled out, verify it using either a Digital Signature Certificate (DSC) or an Electronic Verification Code (EVC) before submitting it.
After you submit the application:
• The GST officer will examine it for revocation. They may request more documents if necessary.
• If the officer finds the application and the information satisfactory, the revocation request will be approved.
Following this, the GST registration will be restored.
• In case the application is denied, the officer will explain the reasons for the rejection, and you can file an appeal against their decision.
- FAQ
1. Is a taxpayer notified prior to a suo moto cancellation?
Yes, a taxpayer is notified through a show cause notice issued in Form GST REG-17. The registration of the taxpayer cannot be canceled without providing a reasonable opportunity for them to be heard.
2. Can the business register for GST after cancellation?
Yes, a business can register for GST again after cancellation, unless the cancellation was initiated by the tax officer.
3. Do I need to file any returns before applying for cancellation?
Yes, you need to file all outstanding returns (like GSTR-1 and GSTR-3B) up to the cancellation date. Also, a final return (GSTR-10) is required to be filed after the cancellation.
4. How long does it take for GST registration cancellation to be processed?
The cancellation process usually takes between 30 to 60 days, although this can vary based on the complexity of the case and how the GST authorities handle the verification process.
5. What If my GST registration is canceled due to non-filing of returns?
If your registration is canceled because you didn't file your returns, you need to pay any outstanding returns and taxes, and then apply for revocation within 30 days of the cancellation to get your registration back.