All you need to know about GST Cancellation
- Posted on Jun 22, 2021
- By Shrotriyo S
The goods and service tax introduced by the Government of India In 2017, Registration to which is mandatory for any business exceeding 40 lakh INR turnover.
Now, in case you want to go for GST Cancellation, i.e. cancel your GST registration, here is all you need to know on how to cancel your GST registration.
Before, you cancel your GST registration, here are a few things you should know.
Who Can Cancel A GST Registration?
A GST registration can be cancelled by the following:
1. The Taxpayer himself,
- In case of the business being transferred, sold or in case of merger, demerger
- In case of a change in the constitution of the business, for example, from a proprietorship to a private limited company
- In case the aggregate turnover of the company falls below the limit defined under Section 22 of the CGST Act.
- Taxpayer had obtained for voluntary registration which was not covered under section 3 & 4
2. The Tax officer,
- There is a violation of the GST law
- Collecting tax in places other than place of business.
- No tax invoice issued
- No bank account details
- When composite taxpayers don’t file and submit CMP-08 for three quarters
- Regular taxpayers haven’t filed for GSTR-3B for six consecutive months
- Taxpayer with voluntary registration did not commence business with-in six months of registration date.
3. The legal heir of the taxpayer.
- In case of death of the proprietor.
How To Cancel A GST Registration?
Cancellation of GSTIN (for Migrated Taxpayers)
Every person who was previously registered under indirect tax laws had to migrate to GST, compulsorily. Many such people may have not been liable to be registered under GST. For example, the threshold under VAT in a lot of the states were 5 lakhs however, it is 20 lakh* under GST. Furthermore, do make sure you are not making inter-state supplies since GST registration is mandatory for inter-state suppliers except for service providers. Rs. 10 lakh and Rs. 40 lakh in certain union territories & states. Such taxpayers have to submit an application electronically in FORM GST REG-29 at the GST portal. The proper officer shall, after conducting an enquiry as required would cancel the registration.
Forms for GST cancellation
All those who cannot follow the aforementioned method. Form GST REG 16 should be filed for the application for cancellation, by those taxpayers. The legal heirs of the deceased taxpayer will follow the same procedure as below.
- Application for cancellation has to be made in FORM GST REG 16.
- The following details must be included in FORM GST REG 16
- Details of inputs, semi-finished, finished goods held in stock on the date on which cancellation of registration is applied
- Liability thereon
- Details of the payment
- The proper officer has to 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
GST Cancellation on GST portal
- Log in with registered user id and
- Click Cancellation of Provisional Registration on the right side of the screen.
- Click “No” for the “Have you issued any tax invoice in GST regime”.
- Complete the verification tab.
- Submit the form with the help of Digital Signature or Electronic Verification Code
Please keep in mind that the taxpayer is liable to pay the unpaid tax dues before the date of cancellation.
GST Cancellation by tax officer
- If the proper officer has reasons to cancel the registration of a person then he will send a show cause notice to such person in FORM GST REG-17.
- The person must reply in FORM REG–18 within 7 days from date of service of notice why his registration should not be cancelled.
- If the reply is found to be satisfactory, the proper officer will drop the proceedings and pass an order in FORM GST REG–20.
- If the registration is liable to be cancelled, the proper officer will issue an order in FORM GST REG-19. The order will be sent within 30 days from the date of reply to the show cause.
How To Activate Cancelled GST Registration?
A taxpayer whose registration is cancelled by the proper officer can apply for reversal of such cancellation of GST registration by applying Form GST REG-21. This application should be filed within 30 days of receiving the notice for the cancellation of GST registration
When is revocation of GST cancellation applicable?
Revocation of application is only applicable when the tax officer has cancelled the registration on their accord. The taxable person can apply for the revocation of cancellation to the tax officer within 30 days of the date of cancellation. The following is the procedure.
- A registered person can submit an application for revocation of cancellation, in FORM GST REG-21, if his registration has been cancelled suo moto by the proper officer.
- He must submit it within 30 days from the date of service of the cancellation order at the Common Portal.
- If the proper officer is satisfied he can revoke the cancellation of registration by an order in FORM GST REG-22 within 30 days from the date of receipt of the application. Reasons for revocation of cancellation of registration must be recorded in writing.
- The proper officer can reject the application for revocation by an order in FORM GST REG-05 and communicate the same to the applicant.
- Before rejecting, the proper officer must issue a show cause notice in FORM GST REG–23 for the applicant to show why the application should not be rejected. The applicant must reply in FORM GST REG-24 within 7 working days from the date of the service of notice.
- The proper officer will take decision within 30 days from the date of receipt of clarification from the applicant in FORM GST REG-24.
What Are the Consequences Of Cancellation Of GST Registration?
- The taxpayer is no longer liable to pay taxes
- Cannot collect GST from the customers
- Cannot avail Input Tax Credit (ITC) like before
- Cannot conduct business if registration was mandatory under Section 24 of the CGST act
- The taxpayer will continue to be liable for the unpaid tax dues before cancellation, whenever such liability is identified.
- Posted on Jun 22, 2021
- By Shrotriyo S
- 0 Comments