How to Cancel GST Registration: Step-by-step process

Learn the step-by-step process of cancelling your GST registration.
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3 min
02 July 2024

GST registration is mandatory for businesses exceeding a specified turnover threshold in India. It enables them to collect GST from customers and avail input tax credits. Registration ensures compliance with tax laws and provides legal recognition as a supplier.Businesses can also track their GST registration application ARN status to stay updated on their registration process.

Cancellation of GST registration: An introduction

Cancellation of GST registration refers to the process of nullifying a taxpayer's GST identification number, rendering them ineligible to collect GST or claim input tax credit. This process can be initiated by the taxpayer, tax authorities, or legal heirs in the case of the taxpayer's demise. Understanding the criteria and procedures for cancellation is crucial for compliance with GST laws and avoiding legal complications.

Who can cancel GST registration?

  • Taxpayer: A registered taxpayer can voluntarily apply for cancellation of GST registration if their annual turnover falls below the threshold limit, or if they are discontinuing their business or changing their business constitution.
  • Legal heirs: In the case of the death of a sole proprietor, the legal heirs can apply for the cancellation of GST registration.
  • Tax authorities: GST officers have the authority to cancel GST registration if they find any non-compliance with GST rules and regulations. This includes issues like non-filing of GST returns, supplying goods or services without issuing an invoice or engaging in fraudulent activities.
  • Business merger or demerger: In cases where businesses are merged or demerged, the existing GST registration might be cancelled, and a new one issued as per the new business structure.

Reasons for cancellation of GST registration

  • Non-compliance with GST rules: GST registration can be cancelled if a taxpayer does not adhere to the GST rules outlined in the GST act and GST laws, such as failing to file GST returns for a continuous period.
  • Discontinuation of business: If a business discontinues its operations, the taxpayer can apply for cancellation of GST registration to avoid unnecessary compliance requirements.
  • Change in business constitution: A change in the constitution of a business, such as from a sole proprietorship to a partnership, necessitates the cancellation of the existing GST registration and obtaining a new one.
  • Turnover below threshold limit: If the annual turnover of a registered taxpayer falls below the prescribed threshold limit, they can opt to cancel their GST registration.
  • Voluntary cancellation: Taxpayers may voluntarily cancel their GST registration if they believe it is no longer required, provided they meet the conditions specified in the GST act.
  • Fraudulent activities: Engaging in fraudulent activities such as issuing fake invoices or claiming input tax credits without genuine transactions can lead to the cancellation of GST registration by tax authorities.

How can I file for cancellation of GST registration?

 

  1. Application:
    • Visit the GST Portal.
    • Login to the GST Portal with your user-ID and password.
    • Navigate to the Services > Registration > Application for Cancellation of Registration option
  2. Details: Provide details such as GSTIN, business name, address, and reason for cancellation.
  3. If taxpayer has issued any tax invoice, then submit a GST REG-16 form online through the GST portal.
  4. Verification: The tax officer verifies the application and supporting documents.
  5. Approval: Upon approval, the officer issues an order for cancellation in the GST REG-19 form within 30 days.
  6. Final return: File a final GST return in the GSTR-10 form to clear any pending liabilities.

 

Procedure for cancellation of GST registration

  • Application: Submit a GST REG-16 form online through the GST portal.
  • Details: Provide details such as GSTIN, business name, address, and reason for cancellation.
  • Verification: The tax officer verifies the application and supporting documents.
  • Approval: Upon approval, the officer issues an order for cancellation in the GST REG-19 form within 30 days.
  • Final return: File a final GST return in the GSTR-10 form to clear any pending liabilities.

Consequence of cancellation of GST registration

  • Cessation of business: The business must stop making taxable supplies.
  • Tax payment: Pay outstanding GST liabilities, including interest and penalties.
  • Input tax credit: Unused input tax credit cannot be claimed.
  • Legal compliance: Comply with all legal obligations, including filing final returns.
  • Revocation restrictions: Once cancelled, registration can only be reinstated through the revocation process.

Revocation of GST registration cancellation

  • Eligibility: Apply for revocation within 30 days of cancellation order.
  • Application: File GST REG-21 form online through the GST portal.
  • Approval process: Tax officer reviews the application and supporting documents.
  • Communication: Officer may seek additional information or clarifications.
  • Decision: Upon satisfaction, the officer issues GST REG-22 form for revocation.

Steps for revocation of GST registration cancellation:

  • Login: Access the GST portal and log in with credentials.
  • Form GST REG-21: Navigate to services > registration > application for revocation of cancellation.
  • Submit: Fill in the form and submit.
  • Documents: Attach required supporting documents.
  • Confirmation: Receive an acknowledgement for the application submission.

Documents and information required for revocation of GST registration cancellation:

  • GSTIN: Copy of GST registration certificate.
  • Cancellation order: Copy of the cancellation order issued.
  • Reason: Detailed explanation for revocation request.
  • Returns: Copies of all filed returns post-cancellation.
  • Supporting documents: Any other relevant documents as requested by the tax officer.

After submission of the application:

  • Acknowledgement: Receive an acknowledgement receipt.
  • Verification: The tax officer reviews the application and attached documents.
  • Clarification: Respond to any additional information requests from the officer.
  • Order: The officer issues the revocation order or rejects the application within 30 days.
  • Status update: Check the status of the application online through the GST portal.

Conclusion

The GST registration process is crucial for maintaining legal compliance in business operations. Proper cancellation and potential revocation ensure businesses meet regulatory requirements, impacting eligibility for various financial services, including instant business loans. Understanding these procedures helps businesses manage their tax obligations effectively.

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Frequently asked questions

Can GST registration be cancelled?
Yes, GST registration can be cancelled by the registered person or by the tax authorities in India. Cancellation can occur due to reasons such as business discontinuation, turnover falling below the threshold, or non-compliance with GST regulations. The process involves submitting an application online through the GST portal and following the prescribed procedure.
What is the time limit for a GST cancellation order?
The time limit for a GST cancellation order is 30 days from the date of the order. The taxpayer must file for cancellation within this period to ensure compliance. Delays beyond this timeframe may lead to penalties or other legal consequences, as stipulated by the GST regulations.
What is the final return of GST after cancellation?
The final return of GST after cancellation, known as GSTR-10, is a one-time return that must be filed by a taxpayer whose GST registration has been cancelled or surrendered. This return provides details of stock held and liabilities up to the cancellation date, ensuring all dues are settled.
How to revoke GST registration after 180 days?
To revoke GST registration after 180 days, log in to the GST portal and navigate to the "Services" tab. Select "Application for Cancellation of Registration," fill in the required details, and submit the form. Ensure all pending returns and liabilities are cleared before applying. The GST officer will review and process your request.
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