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Cancellation or Surrender of GST Registration

Be regular with filing your GST returns. Your GSTIN can get cancelled if you fail to furnish returns for a continuous period of 3 months. You are not allowed to continue your business, post the cancellation.

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Cancellation or Surrender of GST Registration

Nowadays, GST is one of the most discussed topics in India. All of us are still confused about the method for registration, filling the return forms, tax challan, e-way bill and other forms for GST. If you have mistakenly registered for GST and are required to cancel your GST Registration, one can only do so if the annual turnover of his/her company is less than Rs. 20 lakhs that is the total of sales plus unregistered purchase.

The Cancellation of GST registration indicates that the taxpayer will not be a GST enrolled person anymore. He/she will not endure to pay or make GST. The results of the removal are:

  • The taxpayer will not pay GST anymore
  • For certain businesses, registration under GST is compulsory. If the GST registration is canceled and business is maintained, it will involve an offense under GST and large penalties will apply.
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    Checklist Requirements of Cancellation of GST

    The following information must be mandatorily defined by the applicant while using for Cancellation in Form GST REG-16:

  • Contact address, which involves the mobile number and email address.
  • Grounds of Cancellation.
  • The desired date of Cancellation.
  • Specifications of the value and the tax payable on the stock of inputs, the inputs possible in semi-finished goods, inputs available in complete goods, the stock of capital goods/plant and machinery.
  • Details of registration of the entity if the current unit merged, amalgamated, or transferred.
  • Specifications of the latest return filed by the taxpayer along with the ARN of the particular return.
  • Reasons for GST Cancellation

  • Cancellation occurs when turnover is less than 20 lakhs.
  • Cancellation by the taxpayer in other cases like discontinuation of business, conversion of business
  • Cancellation by a tax officer, if the business not follows the established parametres.
  • GST Cancellation if the Turnover is less than 20 lakhs

    Every person who was listed under the old tax system has to mandatorily move to GST. Many such persons are not responsible to be filed under GST. For example, the threshold under VAT in most cases was Rs. 5 lakhs, whereas it is 20 lakhs below GST. However, do make sure you are not removing inter-state supplies since enrollment is mandatory for inter-state suppliers except for service providers. Such a taxpayer can file an application electronically in FORM GST REG-29 at the public portal. The proper officer shall, after analyzing as per requirement, will cancel the registration.

    Cancellation by the taxpayer in different cases

    Why does a taxpayer wish to remove his/her registration?

  • The business has been discontinued
  • The business has been assigned fully, amalgamated, demerged or contrarily disposed of the transferee or the new business from amalgamation/ demerger has to get registered. The transferor will withdraw its registration if it ends to exist.
  • There is a difference in the constitution of the business. For example, a private limited company has turned to a public limited company.
  • GST Cancellation Forms

    All those who cannot understand the above method must implement for Cancellation in FORM GST REG 16. The legal heirs of the late taxpayer will follow the identical method as below.

  • Application for removal has to be done in FORM GST REG 16.
  • The following details must be entered in FORM GST REG 16-
  • Details of inputs, semi-finished, polished goods held in stock on the date on which removal of registration is implemented
  • Liability thereon
  • Features of the payment
  • The proper officer has to continue with an order for removal in FORM GST REG-19 within 30 days from the date of request. The Cancellation will be useful from a date decided by the officer and he will inform the taxable person
  • Cancellation by the tax officer

    Why will the officer cancel a registration?

    The registration can be cancelled if the taxpayer-

  • Does not handle any business from the stated place of business or
  • Concerns invoice or bill without supply of goods/services (i.e., in violation of the provisions) or
  • Breaks the anti-profiteering requirements (for example, not passing on the benefit of ITC to customers)
  • GST Cancellation Procedure

  • If the proper officer has reasons to remove the enrollment 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 the date of service of notice why his/her registration should not be removed.
  • If the answer is found to be satisfying, the usual officer will leave the proceedings and give an order in FORM GST REG –20.
  • If the registration is likely to be canceled, the proper officer will assign an order in FORM GST REG-19. The order will be posted within 30 days from the date of return to the show cause.
  • Revocation of Cancellation of registration

    What is a revocation of Cancellation?

    A revocation means the proper Cancellation of a declaration or agreement. Revocation of Cancellation of registration means that the choice to cancel the enrollment has been changed and the registration is still valid.

    When is a revocation of Cancellation applicable?

    This is applicable only when the tax officer has removed the registration of a taxable person on his/her plan. Such a chargeable person can employ the officer for revocation of Cancellation within thirty days from the date of the Cancellation request.

    GST Cancellation Procedure

  • A certified person can apply for revocation of Cancellation, in FORM GST REG-21, if his/her enrollment has been removed suo moto by the proper officer.
  • He/she must present it within 30 days from the date of service of the revocation order at the common portal.
  • If the proper officer is convinced he/she can delete the removal of registration by an application in FORM GST REG-22 within 30 days, from the date of acceptance of the application. Ideas for revocation of removal of registration must be filed in writing.
  • The proper officer can deny the application for Cancellation by an order in FORM GST REG-05 and deliver the same to the applicant.
  • Before declining, the proper officer must publish a show-cause notice in FORM GST REG–23 for the applicant to explain why the application should not be denied. The applicant must fulfill in FORM GST REG-24 within 7 functioning days from the date of the set of notice.
  • The proper officer will determine within 30 days from the date of release of an explanation from the candidate in FORM GST REG-24.
  • As per Section 29 of CGST ACT:

  • The proper officer may file for Cancellation, either on his/her plan or an appeal filed by the designated person or by his/her legal heirs, in case of loss of such person, cancel the registration, in such way and within such time as may be directed, having interest to the cases where:
    • a. The business has been suspended, assigned fully for any reason including loss of the owner, amalgamated with other authorized entity, demerged or otherwise disposed of, or
    • b. There is any difference in the constitution of the business; or
    • c The taxable person, other than the person listed under sub-section (3) of section 25, is no longer subject to be registered under section 22 or section 24.
  • The proper administrator may remove the rea. gistration of a person from such date, including any retrospective date, as he may consider fit, where:
    • a. A registered person has violated such requirements of the Act or the laws made thereunder as may be directed; or
    • b. A person giving taxa. under section 10 has not provided returns for three progressive tax periods; or
    • c. Any registered person, other than a person named in the clause, has not proa. vided returns for a consecutive period of six months; or
    • d. Any person who has become voluntary enrollment under sub-section (3) of section 25 has not started a business within six months from the time of filinga. ; or
    • e. Registration has been taken using fraud, wilful distortion or destruction of facts: Granted that the individual officer shall not remove the registration without providing the person a chance of being heard.
  • The revocation of registration under this section shall not modify the liability of the person to pay tax and other dues under this Act or to perform any obligation under this Act or the rules enacted thereunder for any period before the date of removal whether or not such tax and other dues are decided before or after the date of removal.
    • a. The removal of registration under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax, as the situation may be, shall be assumed to be a Cancellation of registration below this/her Act.
    • b. Every certified person whose registration is removed shall pay an amount, by way of debit in the automatic credit ledger or electronic cash ledger, similar to the credit of input tax in regard of inputs held in stock and inputs received in semi-finished or finishea. d goods held in stock or capital goods or plant and machinery on the day directly leading the date of such removal or the output tax due on such goods, whichever is greater, determined in such way as may be ordered:
    • c. Given that in fact of capital goods or plant and machinery, the chargeable person shall give a sum similar to the input tax credit taken on thea. said capital goods or plant and machinery, succeeded by such percentage points as may be required or the tax on the transaction value of such capital goods or plant and method under section 15, whichever is higher.
  • The amount payable below sub-section (5) shall be determined in such manner as may be directed.
  • FAQs on Cancellation or Surrender of GST Registration

    Is it possible to cancel the GST number?

    GST Registration can be removed by any person who is no longer needed to file GST return if both his/her yearly turnover is under the exemption limit or the taxpayer is no longer likely to be a registered person or any other purpose described below.

    Can I cancel GST registration without registering returns?

    As far as the Cancellation of registration is involved, you have to register all your returns and prepare all your dues with the GST department for the Cancellation of your enrollment. You cannot continue ahead for Cancellation unless and until you clear all your dues.

    What is the maximum penalty for GST?

    The law has set a peak late fee of Rs 5,000. This suggests that in any case, the maximum late fees that can be imposed by the Government is Rs 5,000, for each return being registered under each Act.

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