How to surrender GST Registration Number and when it can be cancelled
Under GST, every person with an aggregate turnover in a financial year exceeding Rs. 20 lakhs is required to take GST registration. However, the GST law provides specific provisions according to which the registration can be cancelled or surrendered. When the registration of a taxpayer is cancelled, he or she will no longer be registered under the GST i.e. he or she will no longer be liable to make taxable supplies or pay or collect any GST thereon.
Let’s understand the cancellation and surrender provisions in detail below.
Surrender or Cancellation of GST Registration
The cancellation or surrender of GST registration means permanent cancellation of GSTIN of the taxpayer. Section 29 of the CGST Act 2017 provides for the cancellation or surrender of GST registration. According to this section, a proper officer may either suo moto i.e. on his own or by an application made by the registered person or his legal heir, cancel the registration of the person.
The GST registration can be cancelled in two following cases:
- If the registered person himself or herself wishes to surrender or cancel the registration i.e cancellation on voluntary application by the registered person or
- Specific circumstances arise in the business entity under which the proper officer believes that it's better to cancel the registration i.e. suo moto cancellation of registration by the proper officer
Surrender or Cancellation of GST Registration on Voluntary Application by the Registered Person
The GST registration can be cancelled by the proper officer on a voluntary application made by the registered person in case of the following circumstances-
- The business of the registered person is discontinued, transferred fully for any reason including death of the proprietor or amalgamated with other legal entity or deserted or otherwise disposed of or
- There is any change in the constitution of business or
The taxable person is no longer liable to be registered under section 22 or 24 or intends to opt-out of the registration voluntarily made under subsection (3) of section 25.
How to Surrender GST Registration or Process for Surrender of Registration
Where a registered person voluntarily wishes to surrender or cancel his registration on account of the circumstances mentioned above, then he can do so by filing an application in Form GST REG - 16. The application shall be made electronically and shall include details like:
- Input or input contained in semi-finished or finished goods and capital goods held in stock as on the date on which the application is filed
- Any liability thereon
- Detail of any payment made against the liability, if any.
After the submission of the application for surrender of registration by the registered person, the proper officer will issue the order approving the cancellation in Form GST REG - 19 within a period of thirty days from the date of application.
Once the order is passed by the proper officer, the status of the GSTIN of the registered person will change to “Suspended” until the proper officer specifies the date from which the cancellation will come into force.
Suo moto Cancellation of GST Registration by the Proper Officer
The proper officer may on his own motion cancel the registration of the registered person, as he may deem fit, in the following cases:
- The registered person has contravened such provisions of the Act or rules made thereunder as may be prescribed or
- A person paying tax under section 10 i.e. composition scheme has not furnished the return for a financial year beyond 3 continuos tax periods from the due date of furnishing the said return or
- The registered person, other than that mentioned in clause (b) above, has not furnished the return for a continuous 6 months as may be prescribed or
- Any person who has taken voluntary registration under section 25(3) has not commenced the business within six months from the date of registration or
- Registration has been obtained using fraud, wilful misstatement, or suppression of facts.
Procedure for Cancellation of Registration by Proper Officer
Where the proper officer believes that the registration of the taxpayer should be cancelled due to the reasons mentioned above then he can order the cancellation of registration.
The proper officer will then send a show-cause notice to the taxpayer in Form GST REG - 17 asking the taxpayer to reply to the notice within a period of 7 days.
The taxpayer is required to file Form GST REG - 18 in response to the show-cause notice within 7 days from the date of service of notice by the proper officer.
If the proper officer is satisfied with the reply of the taxpayer, then he will pass an order in Form GST REG - 20 notifying no cancellation of registration. However, if the proper officer is not satisfied then he will continue with the cancellation process and will pass an order in Form GST REG 19. This order will be passed within 30 days from the date of reply, of the taxpayer, to the show cause notice.
Author : Simran
Date : 09-Jul-2022