GST registration cancellation is a frequently asked issue, and we’ve addressed a few of the most prevalent concerns regarding it in this article.
# Meaning of cancellation of GST registration
If the taxpayer cancels their GST registration, it simply implies that they are no longer a GST registered business or individual. Such businesses or individuals won’t be required to make any of these payments or collect GST or claim any input tax credits, and won’t have to file any GST returns.
# Who can cancel the GST registration?
- Registration can be cancelled in one of two ways: either by the department acting independently or by the registered person submitting a cancellation request.
- The legal heirs of a deceased registered individual also have the right to request cancellation of the registration.
- GST registration can be cancelled if an individual’s annual income is below INR 20 lakhs.
- Upon the sale of a business, the prior owner must revoke his GST registration, and the current owner must obtain a new GST registration through the government’s online service.
# Under what circumstances is a taxpayer entitled to cancel their GST registration?
- The company’s indefinite absence or shutdown
- The taxpayer no longer has to pay tax.
- The sale, lease, or other transfer of a firm as a result of a merger
- Changes in the corporate structure have led to adjustments in PAN.
- Registered freely, but did not begin any company operations within the time frame stated
# Who can’t cancel their GST registration and file a cancellation request?
- Individuals who have been assigned a taxpayer identification number
- Taxpayers who are also enrolled as tax deductors or Tax collectors
# Steps for cancellation of GST registration online on GST portal
Go to GST Portal
Use a valid set of credentials to access your account.
After log in, you’ll see the “Service” option in the menu bar at the top.
Following that, a drop-down menu will appear, and you’ll want to select the “Registration” menu option and then the “Application for Cancellation of Registration” from the list.
A new page will open in which you must complete the following two sections.
A. Basic Information
B. Specifics of the Cancellation
A. In this section fill in your “basic details“, address of the principal place of business and address for future correspondence.
B. Fill in the “cancellation details” in the next section.
After providing the given information, you must verify it with “DSC or EVC based verification”.
“Enter the OTP”
On successful filing of application for cancellation of registration, the system will also generate ARN and display a confirmation message.
# Cancellation by the tax officer
The GST Tax Officer has the authority to revoke a company’s GST registration under the following circumstances:
- When the taxpayer does not conduct business at the registered business location,
- When the taxpayer has not filed a GST return for six consecutive months.
- The taxpayer flouts any GST provisions, such as issuing an invoice or statement without actually supplying any goods or services.
- Not complying with anti-profiteering provisions such as not passing on Input Tax Credits to customers.
- If someone registered using a false identity.
As soon as the taxpayer gets it, he or she must respond in writing to the IRS using Form GST REG-18 within seven days of the date on which the notification was served.
# Revocation of cancellation of registration:
The term “revocation” refers to the act of formally repealing a decision or pledge. It’s possible that the decision to abandon your registration was reversed, in which case your record is still active.
When can cancellation be revoked?
Tax officers have the authority to unilaterally cancel the registration of taxpayers. These taxpayers have 30 days from the termination order’s date to request a reversal of cancellation.
- If the authority has revoked the cancellation of registration, the registered person may make a request for reversal of cancellation in form GST REG-21.
- After receiving the cancellation order, the taxpayer has 30 days to file a response.
- Within thirty days of receiving the application, if the authority is satisfied, he or she may order an order in form GST REG-22 revoking the cancellation. Cancellation or revocation reasons must be documented in writing.
- If the application is rejected, the relevant official will issue an order in the form GST REG-05, which will be notified to the petitioner.
- An application can only be refused if the authority issues a show-cause notice in the form GST REG–23 to the applicant. Within seven working days of receiving the notification, the applicant must react in writing using Form GST REG-24.
- Within 30 days of receiving the applicant’s clarification in form GST REG-24, the appropriate official will render a decision.
# Forms used to cancel GST registration:
Form GST REG-17
The Tax officer sends a show-cause notice for the cancellation of the GST registration.
Form GST REG-18
Once received, the taxpayer must respond with a justification within seven days from the date on which the notification was issued to him in form GST REG-18.
Form GST REG-19
If the taxpayer does not find the rationale provided adequate, the proper officer will proceed with the termination of the taxpayer’s GST registration by issuing an order in the form GST REG-19.
Form GST REG –20
If the proper official deems the response adequate, he will dismiss the legal action and issue a ruling in the Form GST REG –20.
# Possible reasons for GST registration cancellation
- The business has come to an end.
- The business has been sold completely.
- The organizational structure of the company has shifted.
- After an organization is sold, integrated, demerged, or otherwise dealt off, the buyer or the new organization formed from a merger or demerger must register.
- If the transferor goes out of business, the registration will be cancelled.
# Required information needed while filing for cancellation of GST
When filling out Form GST REG-16 to request a cancellation, the following details must be provided by the individual:
- Contact information should contain a phone number and email address
- Reasons for cancellation.
- The desired cancellation date
- Details of the value and tax payable on input stock, semi-finished products stock, finished goods stock, and capital goods/plant and machinery stock.
- Information about registering the new entity after a merger, amalgamation, or transfer of the old one.
- If an existing unit merges, amalgamates, or is transferred, the registration details for the new organization will be provided.
- Detailed information about the taxpayer’s most recent return, including the return’s ARN number
GST registration is necessary for any seller of taxable goods and services who sells more than the threshold amount. There have been instances where firms have attempted to re-register after their registration was revoked by an officer for failing to comply with the statutory requirements.
While applying for another registration in the same state, an authorised official must determine if a current registration will continue or be cancelled before proceeding. When a registration is cancelled, an investigation into whether the cancellation is due to a violation of Section 29 (2) (b) begins
- Section 29 applies if the dealer fails to provide returns for three consecutive tax periods.
- A registered taxpayer who hasn’t filed any returns in over a year
# Latest updates on cancellation of GST registration
If the last deadline for revocation falls between March 1, 2020, and August 31, 2021, taxpayers will be given an extension until September 30, 2021, to revoke their cancelled GST registration. CGST notice number 34/2021, issued August 29th, 2021, applies if the GST registration is revoked under Section 29(2) clauses (b) or (c) of the CGST Act.
If your cancellation date falls between 15 April 2021 and 29 June 2021, the deadline to lodge a revocation application is 30 June 2021.
- The tax office has the option to terminate a GST registration under CGST Rule 21 if the following conditions are met:
- Section 16 of the Act or the rules are violated by claiming the input tax credit.
- ITC from a computerized credit ledger used to discharge more than 99 per cent of the tax burden for specific taxpayers – with the total taxable value of supply surpassing INR 50 lac in the month, with some exclusions.
- For more than two consecutive months, a taxpayer has failed to file GSTR-1 since GSTR-3B was never summited.
- If there are significant inconsistencies between GSTR-3B and GSTR-1 and GSTR-2B, suspension of GST registration may be warranted under CGST Rule 21A.
Taxpayers who have cancelled their GST registrations before the 14th of March 2020 may submit a request for the revocation of that cancellation at the 39th GST Council meeting. This application will be open until the 30th of June, 2020. To help individuals who want to keep doing business, the extension was made a one-time measure.
Frequently asked questions’ (FAQs)
# I have GST registration even though I have no active sales. How do I know if I need to file my GST returns?
GST returns must be filed by everyone who is GST-registered. Nil returns should be filed if you did not conduct any business during the accounting period covered by your GST return (i.e., filling in “0” in the boxes). If your firm has closed and you no longer make taxable supplies, you must cancel your GST registration by submitting a cancellation request online.
# What if the 30-day cancellation period has expired?
It is impossible to identify the exact date of an occurrence in all instances. Therefore the CBIC has recommended that the 30-day limit may be flexibly constructed.
# Is it true that cancelling a CGST registration also cancels it under the SGST Act?
Yes, cancellation of registration under one Act (say, the SGST Act) is treated as cancellation of registration under the other Act (i.e., CGST Act).
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