A registered taxpayer may want to cancel his GST registration if GST is no more applicable to him. In such a case, he can go to the GST Common Portal and get his registration cancelled. Cancellation may also be done by a Proper Officer if he has reasons to do so. In this guide by SahiGST, we will understand the cancellation of GST registration in great detail.
What is Cancellation of GST Registration?
The cancellation here means that the taxpayer’s status will no longer be of a registered taxable person under GST. As a result, he will not be liable to collect and pay GST.
Who can Cancel GST Registration?
The registration can be cancelled by the Proper Officer under GST, either on the registered person’s request or if he finds reason to do so (like non-compliance).
Voluntary Cancellation of GST Registration by Registered Person
Since GST registration is mandatory for several taxpayers, one can simply not opt to get his registration cancelled. A taxpayer is allowed to opt for cancellation of registration under the following circumstances:
Reasons for Voluntary Cancellation
If the registered person has discontinued the business for which he had obtained registration
- If the business registered under GST has been sold to a third party
- If the registered person is no longer liable to be registered under GST
Time Period to Apply for Voluntary Cancellation
The taxpayer cannot get his registration cancelled until the expiry of one year from the effective date of registration.
Note: Please note that Proper Officer can also cancel the registration for the above mentioned cases as per the provisions of section 29(1) of the CGST Act.
Cancellation of Registration by GST Officer
The Proper Officer can cancel the registration of a person even without receiving any application for any of the earlier mentioned reasons. Other than those reasons, he can cancel the registration if he finds certain specified defaults in the registration details. However, the Proper Officer will give the taxpayer an opportunity to be heard on the following grounds:
- The taxpayer has contravened prescribed provisions and rules of the Act;
- The taxpayer is a Composition dealer and has failed to file returns for three consecutive tax periods;
- The taxpayer is a Normal taxpayer and has failed to file returns for a continuous period of six months;
- The taxpayer opted for voluntary registration but failed to do business within six months from the date of registration;
- The taxpayer obtained registration by means of fraud, willful misstatement or suppression of facts.
Process to get Registration Cancelled
- The taxable persons who want to get their registration cancelled can do so on the GST Common Portal by filing the appropriate cancellation form.
- He will require the details of stock held on the date of application and the amount of payment dues and credit reversal.
- The taxpayer must apply for cancellation within 30 days of the event which prompted them for getting the cancellation done.
- The application is reviewed by the Proper Officer.
- If the Proper Officer is satisfied with the reason after his assessment, he will cancel the registration within 30 days from the date of application.
Impact of Cancellation of Registration on tax Liability
Whether the registration was cancelled due to voluntary application or was initiated by the Proper Officer, the concerned person will be required to discharge any tax, fees, interest or penalty dues he has. After cancellation of registration, the taxpayer will be required to pay an amount, by way of debit in the electronic credit ledger or electronic cash ledger, equivalent to higher of:
- the input credit in semi-finished / finished / raw stock of goods on the day immediately before the date of cancellation or;
- output tax payable on such goods.
For capital goods or plant and machinery, the taxpayer will be required to pay an amount higher of:
- the input credit taken on such capital goods, reduced by a certain percentage or
- the tax applicable on the transaction value of such capital goods.
Forms Required for Cancellation of GST Registration
Here is a list of forms required for GST registration cancellation process:
|Name of Cancellation Form||Purpose of Form|
|Form GST REG 16||Cancellation of registration by registered person|
|Form GST REG 17||For GST Officer to issue show cause notice for cancelling registration|
|Form GST REG 18||For registered person to reply to show cause notice by registered person|
|Form GST REG 19||For GST Officer to pass order for cancellation of GST registration by|
|Form GST REG 20||For registered person to stop the cancellation proceedings based on explanation from Form GST REG 18|
|Form GST REG 21||For registered person to apply for revocation of cancellation|
|Form GST REG 22||For GST Officer to pass order for revoking cancellation of GST registration|
Revocation of Cancellation of GST Registration
If the registration is being cancelled by the Proper Officer without the application of the concerned registered person, then the person has an opportunity to avoid cancellation. The concerned person can apply for revocation of cancellation by filing Form GST REG-21 within 30 days of service of cancellation order, requesting the officer for revoking the cancellation ordered by him. However, the person needs to clear all the defaults due to which registration was cancelled by the officer like filing all pending returns, making payment of all dues and so on. The Proper Officer will assess his case after receiving the application. If he is satisfied, he will revoke the cancellation by filing Form GST REG-22.
Note: The due date to file GSTR-9 is approaching soon. It is important to be fully prepared and have a reliable tool for filing returns at hand to avoid unnecessary hassles in filing.
How can SahiGST help you?
When it comes to filing any GST return, SahiGST’s world class cloud-based platform can help you. The robust tax filing platform offered by SahiGST is fully capable of handling even the last day rush to give you a smooth and streamlined experience making the filing process a breeze for you.
SahiGST also offers everything you require to comply with the GST laws right from registration, filing and reconciliation of returns to cancellation of registration at one place.