Cancellation of registration under GST

What is meant by cancellation of GST registration?

Section 29 of CGST Act, 2017 read with Rule 20 to 22 of CGST Rules, 2017 deals with cancellation of GST registration. As per Section 29(1) of CGST Act, GST registration can be cancelled either by the applicant by filing an application or by the officer on suo-moto basis.

Cancellation of GST simply means that the taxpayer will not be a GST registered person anymore and will not be liable to pay or collect GST.

Consequences of cancellation:

Following are some of the results of the consequences of cancellation of GST registration in India:

• • The mere result is that the taxpayer does not require paying GST after the cancellation of registration.
  • GST registration is mandatory for certain businesses. If they still continue their businesses after the cancellation of registration they have to pay heavy penalties under the GST law.

Who can cancel the GST registration?

The GST Registration can be cancelled by following individuals:

• • Taxpayer
  • Tax Officer
  • Legal heirs, in case taxpayer dies

Reasons for GST registration cancellation:

The possible reasons for GST registration cancellation are:

• • Discontinuance of business or closure of business.
  • Taxable person ceases to be liable to pay tax.
  • Transfer of business on account of amalgamation, merger, de- merger, sale, leased or otherwise.
  • Change in constitution of business leading to change in PAN.
  • Registered voluntarily, but did not commence any business within specified time.
  • Taxable person no longer liable to be registered under GST Act.
  • Death of sole proprietor.

Cancellation by tax officer:

Some of the times GST registration can be cancelled by the tax officer. There can be following reasons to it:

• • The taxpayer has violated the anti- profiteering provisions.
  • A taxpayer does not carry any kind of business from the declared place or business.

Cancellation of GST when turnover is less than 20 lakhs:

• • As per the provisions laid under GST every person who was registered earlier under the old laws had to mandatorily migrate to GST. Many such persons are not able to be registered under GST.
  • For example, the threshold limit under VAT in most states was 5 lakhs whereas it is 20 lakhs under GST. However, do make sure you are not making any inter- state supplies since registration is mandatory for inter-state suppliers except for service providers.
  • Such a taxpayer can submit an application electronically in the requisite form at the common portal.
  • The proper officer shall, after conducting an enquiry as required will cancel the registration.

How to cancel your GST registration online:

An 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.”

The steps to cancel GST registration online are:

1. • Log in to GST portal
   • Click the option “Application for cancellation of GST registration”
   • The cancellation page is displayed with three tabs namely basic details, Cancellation details and verification details.
   • Moving ahead, fill up the basic details and fill up the reason for GST registration cancellation
   • Once you have given the reason, they will ask you ‘value of stock and also the corresponding tax liability on the stock.’ Enter the respective details manually and move forward towards verification tab.
   • At the end kindly fill up the details of authorized place and signatures. Then sign off with EVC or DSC as applicable.

Revocation of cancellation of GST registration:

• • If your GST was canceled by the proper officer on his own motion, then you can apply for revocation of GST cancellation within 30 days from the date of service of the order of cancellation of GST registration (revocation cannot be used when GST registration was cancelled voluntarily by a taxpayer).
  • If the time limit of 30 days has elapsed and you are not able to file an application for revocation of GST registration, then you can apply for a new GST registration.