Home / GST Cancellation

Updated on 24 Oct 2020  9.00 AM IST | 4 min read

What Is Cancellation Of GST Registration?

When GSTIN number issued to the registered taxpayer cancelled by the taxpayer himself voluntarily or by the central tax authority, it is known as cancellation of GST registration. GST cancellation is basically done to surrender GST number and to opt out of GST scheme. It is mandatory for certain businesses to apply for GST registration. After GST cancellation, you will not be considered as a registered person under GST scheme and you don’t have to pay or collect any GST. If you are still running your business after GST cancellation, you will be liable to pay high penalties to the income tax department. Tax officer is responsible for cancellation of GST registration in India.

In case of voluntary registration, cancellation application can only be made after one year from the date of registration by the registered taxpayer.

Reasons for GST Cancellation

There are various reasons for GST cancellation which are as follows –

  1. Persons registered under any of the previous tax laws are not liable for registration under GST act.

    For example – The threshold limit for registration of already registered persons under VAT was Rs.10 Lakhs which has been extended to Rs.40 lakhs for GST registration and therefore persons who were registered under VAT are not liable for registration under GST scheme.

  2. Discontinuation of business is also considered one of the reasons for GST cancellation. GST number can be cancelled in the following situations –
    • Business discontinuation
    • Transfer of business (either full or partial) includes the death of the proprietor.
    • Combining of one business entity with other known as amalgamation.
    • Any change in the constitution of business results in GST number cancellation.
    • Any registered taxable person who is no longer entitled for GST registration can go for GST cancellation. It excludes persons or individuals registered voluntarily under section 25(3) of the CGST act.
    • In case a person registered under GST composition scheme fails to submit the return for 3 months continuously, GST number of the concerned person will be cancelled by the tax authorities.
    • Every registered person must comply with GST laws and provisions. Non-Compliance with any of the GST laws & provisions will be considered as an offence and results in GST cancellation under GST act.
    • There are certain cases where persons take voluntary registration under section 25(3) of the CGST act but don’t start their business within 6 months from the registration date results in GST cancellation.
    • If a person registered under GST unable to submit GST returns for the period of 6 months continuously, GST number of the concerned person will be cancelled by the tax authorities.
    • If any person obtains registration by means of fraud, misstatement or suppression of facts, GST registration of the concerned person will be cancelled by the tax authorities.
Cancellation of GST Registration

Who Can Cancel the GST registration?

There is a standard procedure which is to be followed by the tax officer for cancellation of GST registration in India. A show cause will be sent by the tax officer to the registered person that he or she needs to answer within 7 working days from the date of GST cancellation order. The registered person needs to reply this notice within the specified time unless the GST registration will be cancelled by the tax authorities.

Cancellation of GST registration can be done by the following persons –

  1. By the taxpayer
  2. By tax officer
  3. By legal heirs (in case of death of taxpayer)

Who can file for cancellation of GST registration in India?

The following persons can file for GST cancellation online in India –

  • Existing taxpayer
  • Migrated taxpayer whose enrolment application has been approved
  • Migrated taxpayer who has not filed any other form after filing the enrollment application.

Who Cannot File For Cancellation of GST registration in India?

Following persons cannot file for GST cancellation online in India –

  • Persons registered as tax deductors/tax collectors.
  • Persons with unique identification number (UIN)

How to Cancel GST Registration?

Procedure for GST cancellation by the tax officer

Certain procedure has been specified by the tax department for cancellation of GST registration. Following steps must be followed by the applicant while filing application for cancellation of GST registration in India –

STEP 1:

In the first step, a show cause notice will be sent by the tax officer to the registered taxpayer via form GST REG-17

STEP 2:

The registered tax person needs to reply this show cause notice explaining “why this registration should not be cancelled?” within 7 working days from the date of service of notice.

STEP 3:

In case the tax officer is satisfied with the reply sent by the person, he or she will drop the proceedings and issue an order via form GST REG-20.

STEP 4:

In case tax officer found the reply unsatisfactory, he or she will issue an order via form GST REG-19. This order must be sent by the tax officer within 30 days from the date of reply.

Note - A Registered person can also put application for cancellation of GST registration to the tax authorities voluntarily.

Procedure for GST cancellation by the taxpayer voluntarily

STEP 1:

Go to the website www.gst.gov.in and fill your username and password.

STEP 2:

Choose option “Application for cancellation of registration” from registration tab given under “Services” menu

STEP 3:

After choosing this option, you will get form GST REG-16 displayed over the screen. You will get fields like GSTIN, business name & address auto-filled in the form.

STEP 4:

Next, you need to choose the reason for cancellation from the drop down list.

STEP 5:

In the next step, you need to provide the details about the stock value and its tax liability.

STEP 6:

In order to set-off your tax liability, you need to fill this value either in electronic cash register or credit register or both.

STEP 7:

Tick the verification box and enter the name of the authorized signatory & place in the boxes given below.

STEP 8:

Finally, click on option “Submit with DSC” or “Submit with EVC” and submit the form to the tax authorities.

Note - In case of sole proprietor’s death, legal heir/successor of the sole proprietor need to file an application to the tax authorities for cancellation of GST registration via form GST REG-16. It should be filed by the legal heir /successor before the tax authorities. In case registration is cancelled by the tax officer via Suo moto, you can apply for the revocation of GST cancellation by filing form GST REG-21 within 30 days from the cancellation order.

Information needed to cancel GST registration

In order to cancel GST registration, you need to provide the following information –

GSTIN of business

GSTIN number is the number allotted to the registered individual after getting registration under GST scheme. It is a 15 digit unique identification number given to every registered person under GST scheme.

Stock details

It is necessary to provide the details of closing stock hold by the taxpayer at the time of ceasing the business. You need to pay the credit lying in a stock along with your return.

Details of pending tax liability, fine or a penalty

A person registered under GST needs to furnish the details of pending tax liabilities such as fines and penalties to the tax authorities. Any pending tax liability, fine or a penalty should also be paid along with the return.

Details of input tax credit

Every registered GST taxpayer need to furnish details about the input tax credit claimed by him in the past. This information is also considered as one of the important information to be shared with the tax authorities at the time of GST cancellation.

GST Registration Cancellation Forms

It is important to understand the use of GST cancellation forms as they vary depending upon the situation. There are various forms used for cancellation of GST registration in India and the same are mentioned in the table below –

Form Description
FORM GST REG-16 Voluntary cancellation by registered user
FORM GST REG-17 Show cause notice issued by the officer
FORM GST REG-18 Reply to show cause notice by the taxpayer
FORM GST REG-19 Order for dissolution
FORM GST REG-20 To stop cancellation proceedings
FORM GST REG-21 Application to revoke GST cancellation
FORM GST REG-22 Order to revoke cancellation

Information required for filling cancellation form

The information required for filing cancellation form is as follows –

  1. Name, complete address, E-mail-ID and the registered mobile number of the taxpayer.
  2. Valid reason of cancellation and desired date of cancellation.
  3. Details related to input stock & capital stock, input available on semi-finished and finished goods. You need to fill these values manually at the time of filing tax liability.
  4. In order to set off your tax liability, you need to fill either electronic cash register or credit register.
  5. Details of previous return filed by the taxpayer.
Note - In case of merger or demerger or transfer of entity, you need to provide the registration details of the entity i.e. GSTIN of the transferee.

Filing Your Final GST Return (GST F8)

GST 8 form is the final GST return issued by the GST department containing all the relevant information till the last date of GST deregistration. It is mandatory for every GST registered business –

  • To submit complete GST F8 form within one month period from the end of the accounting period mentioned on the return.
  • To settle all outstanding GST returns & payments (in case if any)

Effective Date of Cancellation

Effective date of cancellation means the date of cancellation of GST registration. Sometimes taxpayer applies for revocation of GST cancellation; therefore effective date of cancellation may vary according to the situation.

For example – Suppose, you are filing your GST return monthly and your effective date of cancellation is 01 January 2019. Form GST F8 will be issued for the period of 01 December 2018 to 31 December 2018 which you need to submit by 31 January 2019.

Revocation of GST Cancellation

What is revocation of cancellation?

The revocation of GST cancellation means reversing the decision of “cancelling the registration” and considering it again as a valid GST registration.

When is revocation of cancellation applicable?

Revocation of cancellation of GST registration is applicable at the time when GST registration of a taxable person is cancelled by the tax officer. You must apply for revocation of GST cancellation within 30 days from the date of cancellation. You need to submit an application for the revocation of cancellation of registration to the tax authorities. Tax officer has the authority to accept or reject the application sent by the taxpayer for GST revocation.

Procedure for revocation of GST cancellation

  1. In the first step, a person registered under GST scheme can submit an application via form GST REG-21 (in case registration is cancelled by suo moto by the tax officer)
  2. Registered person must submit the application to the tax authorities within 30 days via GST portal.
  3. If tax officer become satisfied, he or she revokes the process of cancellation by issuing order via form GST REG-22 within 30 days from the date of receipt of the application.
  4. In case tax officer is not satisfied with the application sent by the taxpayer for revocation, he or she can reject the application via form GST REG-05 and sends a show cause notice to the applicant. The applicant needs to answer this notice within 7 days from the date of notice. It is sent by the tax officer to get explanation from the taxpayer about “why this application should not be rejected”.
  5. After receiving the reply from the applicant, tax officer needs to take the decision within 30 days from the date of notice received by the taxpayer via form GST REG-24.

What Is Included In Our Package?

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GST Cancellation FAQ’S

GST registration can be cancelled in the following situations –

  1. Discontinuation in business
  2. Change in constitution of business
  3. When the business turnover of a GST registered person is below the threshold limit.
  4. Non-filing of GST return
  5. When GST registration obtained by an individual by means of fraud, willful misstatement or suppression of facts.
  6. Non-compliance of GST rules & provisions.
  7. When an individual does not commence the business within 6 months after taking voluntary GST registration. In such cases, GST officer has the authority to cancel GST registration.

In order to check GST cancellation status, you need to follow the steps given below -

  1. Go to website www.gst.gov.in and click on “Track application status” under services menu.
  2. In the second step, enter your ARN number, type the characters given in the box below and click on search.
  3. On the basis of ARN search, result will be displayed over the screen and provide you information about your application status i.e. Approved or not approved. You will also get a mail from GST department of the government that whether your application for cancellation of registration is approved or not.

In case of GST number cancellation, you need to apply for revocation of GST cancellation through GST portal online –

  1. Go to website www.gst.gov.in to access GST portal.
  2. Enter your username & password
  3. Choose option “Application for revocation of cancelled registration” from registration tab given under “Services” menu.
  4. Enter reason of GST cancellation and attach a supporting document.
  5. Tick the verification box & enter the name of authorized signatory and place in the given boxes.
  6. In the final step, click on “Submit with DSC” or “Submit with EVC” and submit the form to the tax authorities.

In the case of voluntary cancellation, a registered tax payer needs to apply for GST cancellation within 30 days from the order of cancellation.

GSTIN number is a unique 15 digit identification number allotted to every registered person under GST scheme.

In order to activate cancelled GST registration, you need to apply to the tax authorities within 30 days from the date of cancellation order. It can only be activated in case when registration is cancelled by the tax officer. A registered person cannot go for revocation of GST cancellation in case the cancellation is done voluntarily.

Yes, we can cancel GST registration without filing returns. Many persons who are not liable for GST registration can submit a form GST REG-29 electronically on GST portal.

GST registration may be cancelled by the supplier due to the following reasons –
  1. Discontinuation of business or business closure
  2. Business transfer on account of amalgamation, sale, merger, de-merger, leased or otherwise.
  3. No requirement to pay GST
  4. Change in business constitution
  5. No business activity
Form GST REG-17 is used for issuing a show cause notice. It is issued by the officer of the GST department.
An applicant needs to file Form GST REG-21 within 30 days from the date of cancellation.

How FinacBooks help in cancelling the GST Cancellation?

FinacBooks is a leading Indian portal providing accounting, finance & taxation services to small businesses. We are having more than 10 years of experience in helping GST registered users to cancel GST registrations at a least possible price. We will guide you through the entire process of cancellation of GST registration. To avail the best deals on cancellation of GST registration, kindly call us at 8800221252 or you can also e-mail us at info@finacbooks.com

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