GST Cancellation

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GST Cancellation means Cancellation of GST Registration that the taxpayer will not be a GST registered person any more. He will not have to pay or collect GST. GST Cancellation can be done in two ways:

GST CANCELLATION
BY JURISDICTIONAL OFFICER
 
BY TAXABLE PERSON / LEGAL HEIR
OF TAXABLE PERSON
1Cancellation by the Jurisdictional Officer on his motion

If the proper officer has reasons to cancel the registration of a person then the said officer can do so. The proper officer may cancel the registration of a person from such date, including any retrospective date, as he may deem fit, where,–

  • A registered person has contravened the provisions of the Act or the rules
  • A person paying tax under section 10 (Composition scheme) has not furnished returns for three consecutive tax periods; or
  • Any registered person, other than a person who has opted for composition scheme, has not furnished returns for a continuous period of six months
  • Any person who has taken voluntary registration but has not commenced business within six months from the date of registration
  • Registration has been obtained by means of fraud, wilful misstatement or suppression of facts
Procedure adopted by Officer for Cancellation
  1. Issue Show cause notice in FORM GST REG-17 to put forth the explanation as to why Registration should not be cancelled
  2. Submit Reply in FORM REG–18 within 7 days from date of service of notice
  3. Proceedings will be dropped and order will be passed in FORM GST REG –20 if Proper officer satisfied otherwise order will be issued in FORM GST REG-19 for Cancellation within 30 days from the date of reply.
Note:

Any registered person, whose registration is cancelled by the proper officer on his own motion, may apply to such officer for revocation of cancellation of the registration within thirty days from the date of service of the cancellation order and the proper officer may, revoke cancellation of the registration or reject the application after giving an opportunity of being heard.

Application for revocation cannot be filed if the registration has been cancelled because of the failure to file returns. Such returns must be furnished first along with payment of all dues amounts of tax, interest & penalty.

2Cancellation by the Jurisdictional Officer on an application filed by the registered person or by his legal heirs, in case of death of such person:

Any person / entity who has obtained Registration under GST Act, 2017 can also apply for cancellation of the Registration, if such person is not liable any more for registering under the said Act. One may apply for cancellation of registration in following case:

  • The business has been discontinued, transferred fully for any reason including death of the proprietor, amalgamated with other legal entity, demerged or otherwise disposed of; or
  • There is any change in the constitution of the business; or
  • The taxable person, other than the person voluntarily registered, is no longer liable to be registered the ACT. For e.g. person who was registered under old laws had to mandatorily migrate to GST. Many such persons may not liable to be registered further as per the provisions of the GST Act, thus they can apply for Cancellation of the Registration.
Procedure to be adopted for applying for Cancellation
  • Taxable person has to submit an application electronically at the common portal
    1. FORM GST REG-29 to be used by persons who are mandatorily to be registered as registered under old laws and now not required to be registration as per the law and has not issued any Tax invoice
    2. FORM GST REG - 16 to used by all other persons.
  • Provide following details, as applicable
    1. Reason for cancellation.
    2. Give details of any tax invoices issued
    3. Details of inputs, semi-finished, finished goods held in stock on the date on which cancellation of registration is applied
    4. Liability thereon
    5. Details of the payment
  • Verify the form with EVC / DSC if you are a proprietorship or a partnership. LLPs & Companies must mandatorily sign with DSC.
  • The proper officer shall, after conducting an enquiry as required will cancel the registration and issue an order for cancellation in FORM GST REG-19 within 30 days from date of application. The cancellation will be effective from a date determined by the officer and he will notify the taxable person
Note:

Once Registered person has applied for cancellation of registration, such taxable person should not stop filing the returns after applying for cancellation till the cancellation it become effective from a date determined by the officer and notified to the taxable person.

Non denial of liabilities in can case of cancellation

The cancellation of registration shall not affect the liability of the person to pay tax and other dues or to discharge any obligation under this Act or the rules made for any period prior to the date of cancellation whether or not such tax and other dues are determined before or after the date of cancellation.

Every registered person have to pay off the net liability upto the day immediately preceding the date of such cancellation.