GST Registration Cancellation

1. Discontinuance or closure of business

If you're shutting down your business entirely, you'll want to cancel your GST registration.

2. Transfer of business

The new owner must get a separate GST registration if you're ultimately transferring your business ownership (merger, demerger, sale, etc.). You can then cancel yours.

3. Change in business constitution

If your business structure changes (e.g., from a sole proprietorship to a partnership), your PAN might change, necessitating cancellation of the old GST registration.

1. Below the threshold:

You can voluntarily cancel your registration if your annual turnover falls below the threshold requiring GST registration (currently ₹20 lakh for most businesses).

1. Composition scheme

Your registration can be canceled if you're registered under the composition scheme and fail to file returns for three consecutive tax periods.

2. Regular scheme

Not filing GST returns for six months can lead to cancellation for businesses under the regular scheme.

3. Other Non-compliance

Issuing invoices without supplying goods or services, tax evasion attempts or any other violation of GST provisions can also result in registration cancellation.

1. Approve cancellation

If everything is in order and the taxpayer has fulfilled all obligations (returns filed, taxes paid).

2. Reject cancellation

Suppose there are discrepancies in the application or outstanding tax liabilities. The officer will provide reasons for rejection.

3. Issue a notice

Sometimes, the officer may need further clarification or verification before deciding. They might issue a show-cause notice asking the taxpayer to explain a specific point or provide additional information.

1. Ineligibility to Collect GST

Once the GST registration is cancelled, the entity becomes ineligible to collect GST from customers. This means they cannot charge GST on their supplies.

2. Input Tax Credit (ITC) Reversal

Upon cancellation, the registered entity needs to reverse any Input Tax Credit (ITC) availed on goods or services that remain in stock or are used for business purposes post-cancellation.

3. Filing Final Returns:

The taxpayer needs to file final GST returns and pay any outstanding tax liabilities before the cancellation is processed.

4. Ongoing Obligations

Although the registration is cancelled, the entity may still have to fulfill certain ongoing obligations such as maintaining records for a specified period and responding to any queries from tax authorities.

1. Impact on Business Operations

Cancellation of GST registration can significantly impact business operations, especially if the entity relied on input tax credits or if it conducts interstate trade.

2. Potential Penalties:

Failure to comply with cancellation procedures or continuing to collect GST post-cancellation can lead to penalties imposed by tax authorities.

3. Reapplication Process

If the entity intends to resume business activities subject to GST in the future, it will need to reapply for GST registration, which can involve additional time and administrative effort.

1. Application for Cancellation

The registered taxpayer needs to apply for cancellation of GST registration through the GST portal by submitting the required form along with supporting documents.

2. Clearance of Dues

Before cancellation, the taxpayer must clear any outstanding tax liabilities and file all pending returns.

3. Verification and Approval

Tax authorities verify the application and supporting documents submitted by the taxpayer. If everything is in order, they approve the cancellation request.

4. Cancellation Order

Upon approval, the tax authority issues a cancellation order specifying the effective date of cancellation.

5. Intimation to Taxpayers

The tax authorities publish the cancellation details on the GST portal, and the taxpayer receives intimation of the cancellation.

6. ITC Reversal and Compliance

Post-cancellation, the taxpayer needs to reverse any unutilized input tax credit and comply with any additional requirements specified by tax authorities.