Cancellation or Surrender of GST Registration

Your GSTIN can be cancelled or suspended for various reasons. You cannot continue your business, post the GST cancellation. Learn more about it here.

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Cancellation or Surrender of GST Registration

Registering GST for your business or GST return filing is one of the most discussed topics in India. Many people are still confused about the registration method, filling the return forms, tax challan, e-way bill and other forms for GST.

This lack of knowledge leads to errors while filling out the form. Suppose you have mistakenly registered for GST and you require to cancel your GST Registration; you can apply for cancellation under one condition.

One can only apply for cancellation if the annual turnover of his/her company is less than ₹ 20 lakhs which is the total of sales plus unregistered purchases.

The cancellation of GST registration indicates that the taxpayer will no longer be a GST-enrolled person. The consequences of GST removal are:

  • The taxpayer will not pay GST anymore
  • For certain businesses, registration under GST is compulsory. If the GST registration is cancelled and business is maintained, it will involve an offence under GST, and huge penalties will be applicable.

Checklist Requirements for Cancellation of GST

The following information must be provided by the applicant for cancellation in Form GST REG-16:

  • Contact address, with mobile number and email address
  • Reasons 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 finished goods, the stock of capital goods/plant and machinery
  • Details of registration of the entity if the current unit is 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

  • A taxpayer who pays the Composition Levy has not filed returns for three consecutive tax periods
  • Cancellation by the taxpayer in other cases like discontinuation of business or conversion of business
  • Cancellation by a tax officer if the business does not follow the established parameters
  • Registration was obtained through deceit, willful misstatement, or suppression of facts
  • There is a difference in the constitution of the business. For example, a private limited company has become a public limited company
  • The business has been discontinued
  • The tax officer will cancel if the person breaks the anti-profiteering requirements (for example, not passing on the benefit of ITC to customers).

Procedure for GST Cancellation

  • Step 1: If the concerned 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
  • Step 2: The person must reply in FORM REG–18 within seven days from the date of service of notice why his/her registration should not be removed
  • Step 3: If the answer is found to be satisfying, the concerned officer will leave the proceedings and give an order in FORM GST REG –20
  • Step 4: If the registration is likely to be cancelled, the concerned officer will assign an order in FORM GST REG-19
  • Step 5: The officer will determine within 30 days from the release date of an explanation from the candidate in FORM GST REG-24.

What Is a Revocation of Cancellation?

A revocation means the cancellation of a declaration or an 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.

Why Vakilsearch?

Vakilsearch has a team of legal experts who will help you to cancel the GST registration as per your needs. Vakilsearch caters to each customer's needs during registration. Our team of legal experts will inform you about the technicalities involved in the cancellation or surrender of GST, which will make it easy for you to understand. Vakilsearch has a handful of legal experts who guide you in every step, making it less stressful during the entire process.

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