GST Registration Cancellation/Surrender
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An overview
GST cancellation means the person will not be a registered person in GST anymore. Also, the person need not pay GST or claim input tax credit (ITC) and not even required to file GST returns.
The cancellation of GST can either be initiated by the GST Officer on his own motion or the registered person can apply for cancellation of their registration.
Whenever the registration has been cancelled by the GST department there is an option for the taxpayer for revocation of the GST cancellation. On cancellation of the registration, the Registered Person has to file a Final Return.
Who can Cancel the GST Registration?
Cancellation can be applied by the registered person.
Cancellation by the proper officer, when the officer believes it as right to make it stand unregistered
Cancellation request by legal heirs in case of taxpayer’s death
The consequence of GST Registration Cancellation
|
Particulars |
Related ITC |
Output Tax Payable |
|
Higher of the two shall be payable |
||
|
Inputs of Stock |
ITC availed on such input |
Output tax payable on it |
|
Capital Goods Underlying |
Reduced ITC |
Output tax payable on it |
Note: The above-calculated amount can be paid through debit in the e-credit ledger or e-cash ledger.
After finalisation of cancellation proceedings, The GSTIN status will change from ‘proceeding for cancellation initiated’ to ‘inactive’.
GST cancellation by Taxpayers
Situations where Cancellation of Registration applied by Registered Party
- Discontinuation of business by an entity
- Person transfers his business
- There is a change in the constitution of the registered entity.
- Registered person whose Goods/Services have now become wholly exempt under GST.
GST cancellation by Department
Situations where Cancellation of Registration done by GST Officer:
- Entity doesn’t conduct any business from the declared place of business
- Entity issues invoice or bill without supply of Goods or Services
- Person obtained registration by fraudulent means
- Entity doesn’t commence any business within 6 months after voluntary registration is taken
- Consistent default in filing of GST Returns
- Person transfers his business
- Register person violates the provisions of section 171 of the Act (Anti-profiteering measures)
Steps to cancel GST Registration Online (GST Cancellation Process)
Application for cancellation of GST registration is to be made in Form GST REG-16 on the GST portal within 30 days of the “occurrence of the event warranting the cancellation.”
Mandatory details to be filled in application –
- Address of Future Correspondence with e-mail and phone number
- Reasons for GST cancellation
- Date from which cancellation of GST is sought
- Details of Value of stock/ capital goods and Tax payable or Input tax reversed.
|
Particulars |
Related ITC |
Output Tax Payable |
|
Higher of the two shall be payable |
||
|
Inputs of Stock |
ITC availed on such input |
Output tax payable on it |
|
Capital Goods Underlying |
Reduced ITC |
Output tax payable on it |
In case of merger or transfer of entity, particulars of registration of entity in which existing business is amalgamated, merged or transferred (attachment of a copy of transfer deed) has to be given.
Details of last filed by the person along with ARN number.
After filling in all the required information, submit the application by using one of the below-mentioned methods:
- By Electronic Verification Code (EVC): The code will be sent to the mobile number registered in the application.
- By e-Sign method: An OTP will be sent to the Aadhar linked mobile number
- In case of companies, the application must be submitted using the Digital Signature Certificate (DSC).
Note: Every registered entity whose registration has been cancelled after acceptance from the proper officer shall file a final return in Form GSTR-10, within three months of the effective date of cancellation or order of cancellation, whichever is later.
Revocation of Cancellation of Registration
For revocation of cancellation of registration, the taxpayer has to file Form GST REG-21 online over GST Portal within 30 days from the date of order of cancellation.
In accordance with Rule 23, all returns due till the date of such cancellation are required to be furnished before filing of the application for revocation.
If a person has received a notice in Form GST REG-23, then he should file a reply online to the department in Form GST REG-24 within 7 working days from the date of service of notice in Form GST REG-23.
The GST officer either revoke the cancellation of registration or reject the application, provided rejection can’t be done unless the applicant has been given an opportunity of being heard.
Frequently Asked Questions
Yes, cancellation of registration in the SGST Act shall be deemed to be the cancellation of registration in the CGST Act. (Vice versa is also true)
As per the latest update by CBIC, the application for cancellation of GST registration in Form GST REG-16 filed by the person can be withdrawn. Such withdrawal is possible only if the department has not initiated action against the cancellation application.
Yes, if a business relocates to another state, the GST registration in the existing state has to be cancelled.
Yes, such persons can apply after effect from Notification no. 03/2018-CT dt. 23.01.2018. Earlier, such a voluntarily registered person could not apply for cancellation before the expiry of one year from the date of registration.
Yes, a demerged entity can cancel GST registration by applying over the GST Portal online.
