GST registration can be cancelled voluntarily if the business is dormant or does not have the necessary business turnover. Further, a GST registration can also be cancelled by a GST officer if the business is non-compliant under GST. Once GST registration is cancelled, the person or entity is no longer required to file GST returns and is not required to pay or collect GST.
Voluntary GST Cancellation:
If a person or entity with GST registration wishes to cancel their GST registration, a cancellation request must be submitted to the GST Department in Form GST REG-16. After reviewing the application, if the GST Officer is satisfied, he or she will issue an order to terminate GST registration in Form GST REG-19.
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 cancelling a GST registration can save the business owner from unnecessary hassles of filing GST returns each month and payment of penalty or late-filing fee.
Cancellation by GST Officer:
An officer can initiate the cancellation of a GST registration under GST, if the Officer has justification to cancel the GST registration. The proceedings for GST Cancellation by Officer will begin by issuing a show-cause notice in Form GST REG-17.
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 case of cancellation by the GST Officer, the Officer would notify the taxpayer whose GST registration is liable to be terminated before cancellation. The taxpayer would then be given a reasonable opportunity to be heard before their GST registration is cancelled.
The notice to the taxpayer from GST Officer would be sent in Form GST REG-17 with specific reasons why the GST registration should be cancelled. The notice would also allow the taxpayer to respond to the notice and have a date and time if a hearing is scheduled.
If the taxpayer responds to the notice and the proper authority is satisfied with the response, he or she may dismiss the case and issue an order in Form GST REG-20. If he is not satisfied, he may issue a Form GST REG-19 order cancelling the GST registration.
Procedure for GST Registration Cancellation
Before beginning the process, the taxpayer must file all overdue GST returns. If there is non-compliance with the GSTR-3B, GSTR-1, or GST annual return, the late return must be filed before the GST cancellation process can begin.
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.
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 Indian Filing GST Expert if you have a GST registration that 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.
Filing of Final Return
Once GST registration is cancelled, the person or entity must file a final GST return on Form GSTR-10 within three months of the cancellation date or the date of the cancellation order, whichever comes first.
This is done to make sure the taxpayer has no GST dues pending. This provision does not apply to input service distributors or non-resident taxpayers who must pay tax under Sections 10, 51, or 52.
If the final GST return is not filed in Form GSTR-10, the taxpayer will receive a notice in Form GSTR-3A requiring him or her to do so within 15 days after the notice’s issuance.
If the taxpayer ignores the notice, steps will be made to determine the taxpayer’s liability using the facts available to the concerned Officer. The assessment order will be cancelled if the applicant files the return within 30 days of receiving the notice.
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 such circumstances, the concerned Officer provides an intimation in writing to the applicant regarding the discrepancy’s nature. The applicant must respond to the same within seven days of the date of receipt of the letter. If the applicant fails to do the same, he may reject the application after providing him/her with an opportunity to be heard.
Key Deliverables
a. Duly filed application form
b. Final Return copy