Cancellation of GST Registration Online in India

About the Service

You can cancel your GST registration if the GST rules don’t apply to you or you are shutting down your business or profession, or the tax officer calls for cancellation. Cancellation of GST registration simply means that the taxpayer will not be a GST registered person anymore. He will not have to pay or collect GST or claim the input tax credit and accordingly, need not file GST returns.

Documents required

1. Address, email ID, and registered mobile number

2. Reason for cancellation of GST registration and the most desired date to effect  cancellation

3. Details of the last return filed by the taxpayer

4. When the existing unit is merged/de-merged/transferred, etc., the GST registration details of the new entity

5. GST certificate

6. Particulars on which tax is payable: namely:

- The stock of input and capital

- Input available on semi-finished and finished goods

Timeline of the service 

The cancellation request will be done within 2-3 days of receipt of documents and maximum time taken by the authority for cancellation is 30 days.

FAQs

1. Why will the officer cancel registration?

The registration can be cancelled if the taxpayer-

(a) Does not conduct any business from the declared place of business OR 

(b) Issues invoice or bill without supply of goods/services (i.e., in violation of the provisions) OR 

(c) Violates the anti-profiteering provisions (for example, not passing on the benefit of ITC to customers) OR

With effect from 1st January 2021-

(d) Utilization of ITC from electronic credit ledger to discharge more than 99% of the tax liability for specified taxpayers violating Rule 86B – with the total taxable value of supplies exceeding Rs.50 lakh in the month, with some exceptions. OR

(e) A taxpayer who cannot file GSTR-1 due to GSTR-3B not being filed for more than two consecutive months (one quarter for those who opt into the QRMP scheme) OR 

(f) Avails input tax credit in violation of the provisions of section 16 of the Act or the rules.

Procedure

If the proper officer has reasons to cancel the registration of a person, then he will send a show-cause notice to such person in form GST REG-17.

The person must reply in form REG–18 within 7 days from the date of service of notice because his registration should not be cancelled.

If the reply is found to be satisfactory, the proper officer will drop the proceedings and pass an order in the form GST REG–20.

If the registration is liable to be cancelled, the proper officer will issue an order in the form GST REG-19. The order will be sent within 30 days from the date of reply to the show cause.

2. What is revocation of cancellation?

Revocation means the official cancellation of a decision or promise. Revocation of cancellation of registration means that the decision to cancel the registration has been reversed and the registration is still valid.

3. When is revocation of cancellation applicable?

This is applicable only when the tax officer has cancelled the registration of a taxable person on his own motion. Such taxable person can apply to the officer for revocation of cancellation within thirty days from the date of the cancellation order.

4. When can GST registration be cancelled?

Before starting the GST cancellation process, the applicant must pay any overdue GST liabilities. Furthermore, the taxpayer must remit the input tax in the stock of inputs, semi-finished goods, finished goods, and capital goods, or the output tax liability of such goods, whichever is larger.

The input tax credit on the current stock must be repaid, as the taxpayer will no longer be eligible to claim ITC if the GST registration is cancelled.

GST electronic credit or cash ledger can be used to make the final GST payment. The final payment can be made at the same time that the final GSTR-10 return is being filed.

5. What are the Benefits of Voluntary GST Cancellation?

If no business activity occurs after acquiring GST registration, the taxpayer must begin the GST cancellation process as outlined. If a taxpayer stops filing GST returns and allows his GST registration to lapse, he will be unable to apply for fresh GST registration using the same PAN.

Further, 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, appropriately cancel the GST or continue filing GST returns.

As a result, once a GST registration is received, the taxpayer must keep track of compliance. Hence, if there is no commercial activity, apply for GST registration cancellation as soon as possible.