GST Cancellation

If a business is inactive or doesn't generate the required amount of revenue, the GST registration may be voluntarily terminated. Additionally, a GST officer has the authority to revoke a business's GST registration if it is not GST compliant. Once the GST registration has been canceled, the person or organization is no longer required to submit GST returns or pay or collect GST.

Voluntary GST Cancellation

The GST Department must receive a cancellation request in Form GST REG-16 from any person or business with a GST registration if they wish to have their registration cancelled. The GST Officer will issue an order to terminate GST registration in Form GST REG-19 after evaluating the application if they are satisfied.

The following are some of the top reasons for voluntary GST registration cancellation:

• shutdown or discontinuation of an enterprise.
• Reasons such as business transfers, mergers, leases, and other relevant events.
• Changes to a company's organizational structure that affect PAN.
• Reduced turnover brings it below the GST registration level.
• The only proprietor's passing.

The business owner can avoid extra inconveniences like monthly GST return filing and late-filing fines by voluntarily canceling their GST registration.

Cancellation by GST Officer

If an official has cause to believe that a GST registration should be canceled, then the officer may do so under GST. A show-cause notice in Form GST REG-17 would be issued to start the GST Cancellation by Officer proceedings.

If any of the following circumstances take place, a GST officer may begin the cancellation procedure.

• if a taxpayer has repeatedly neglected to submit GST filings.
• An assessee voluntarily enrolled for GST but did not open for business within six months.
• One or more provisions of the GST Act or its Rules have been broken by the registered taxpayer.
• Deception or willful misrepresentation is used to obtain the GST registration.
• A taxpayer supplies goods or services without producing an invoice or creates an invoice without providing any goods or services in order to avoid paying taxes or to incorrectly claim the input tax credit.

The taxpayer whose GST registration is subject to termination would be notified by the GST Officer in the event of cancellation before cancellation. Before the taxpayer's GST registration is canceled, they would first be given a fair chance to be heard.

The notice from the GST Officer to the taxpayer would be sent in Form GST REG-17 and would include specific justifications for why the GST registration should be canceled. If a hearing is planned, the notification would also include a date and time for the taxpayer to respond and provide any information.

In the event that the taxpayer replies to the notice and the appropriate authority is pleased with the response, the matter may be dismissed and an order in Form GST REG-20 may be issued. In the event that he is not content, he may issue a Form GST REG-19 order to revoke the GST registration.

Procedure for GST Registration Cancellation

The GST registration can be online canceled with IndiaFilings' assistance. The taxpayer is required to submit all past-due GST returns prior to starting the procedure. The late return must be filed before the GST cancellation procedure may start if the GSTR-3B, GSTR-1, or GST annual return were not submitted on time.

Step 1: The unified GST platform accepts applications for GST cancellation using Form GST REG-16. The GST cancellation application must contain the following details.

• Contact information, including a phone number and email address.
• Justification for cancellation.
• The desired cancellation date.
• Information on the value and tax obligations associated with the stock of raw materials, the stock of semi-finished goods, the stock of finished goods, and the stock of capital goods/plant and machinery.
• The taxpayer files the ARN of the specific return along with the specifics of the most recent GST return.

Step 2: Within 30 days of the application's date, the GST Officer must assess the request and issue an order cancellation in the Form GST REG-19. The Officer shall provide the taxable person notice of the cancellation, which shall take effect on a date designated by the Officer.

If you want to cancel a GST registration, speak with a GST Expert at IndiaFilings. We'll check to see if your GST returns have been filed, help you finish any that are still unfinished, and submit a GST cancellation application.

Once you have submitted your application for the cancellation of your GST registration, we will also keep track of it, respond to any inquiries, and help you finish the procedure.

Final Return

In the event that a person or business' GST registration is canceled, they are required to submit a final GST return on Form GSTR-10 within three months of the cancellation date, which is the earlier of the cancellation order's date or the cancellation date.

This is carried out to ensure that the taxpayer has no unpaid GST obligations. Input service distributors and non-resident taxpayers who are required to pay tax under Sections 10, 51, or 52 are exempt from this provision.

A notification in Form GSTR-3A will be sent to the taxpayer if the final GST return is not submitted in Form GSTR-10 and instructing them to do so within 15 days of the notice's issuance.

If the taxpayer disregards the notification, actions will be taken to ascertain the taxpayer's liabilities based on the information the relevant Officer is in possession of. If the applicant submits the return within 30 days of receiving the notice, the assessment order will be canceled.

Preparing to Cancel GST Registration

The applicant must settle any past-due GST liabilities before beginning the cancellation of GST process. In addition, the taxpayer is required to pay the greater of the input tax in the stock of inputs, semi-finished goods, finished goods, and capital goods, or the output tax liability of such goods.

If the GST registration is revoked, the taxpayer will no longer be qualified to claim ITC, so the input tax credit on the present stock must be reimbursed.

To make the final GST payment, you can use a cash ledger or a GST electronic credit. When filing the final GSTR-10 return, the final payment may be paid concurrently.

Rejection of application for GST cancellation

For the reasons listed below, the relevant Officer may choose in some cases to refuse the application.

• The submitted application is incomplete.
• In the transfer, merger, or amalgamation of business, the new entity has not registered with the tax authority before applying.

The responsible Officer notifies the applicant in writing of the nature of the disagreement in such cases. Within seven days of the letter's receipt, the applicant must reply to the same. If the applicant doesn't comply, he may reject the application after giving the applicant a chance to be heard.

Revocation of GST Cancellation

Revocation of GST cancellation means that the cancellation decision has been overturned, and the registration is still in effect. This only applies when a tax official decides to unilaterally revoke a taxable person's registration. A taxpayer may request the order be revoked within thirty days of obtaining the cancellation order. The methods to file for revocation of GST cancellation are as follows:

A request for revocation of cancellation in form GST REG-21 may be submitted within 30 days following the cancellation order if a registered person's registration has been revoked suo-motto by the appropriate Officer.

Within 30 days of receiving the application, the GST Officer may, if satisfied, reverse the cancellation of registration by issuing an order in form GST REG-22. Revocation or cancellation of registration must have a written justification.

The Officer may additionally issue an order in form GST REG-05 denying the revocation application and notifying the applicant. However, the Officer must first issue the applicant a show-cause notice in GST REG-23 asking them to provide justification for the application's approval before rejecting it. The applicant must reply in form GST REG-24 within seven business days of receiving the notice. After receiving the applicant's clarification in form GST REG-24, the appropriate officer will make a decision within 30 days.

Benefits of Voluntary GST Cancellation

After obtaining a GST registration, if no business activity takes place, the taxpayer must start the specified GST cancellation process. A taxpayer would not be able to reapply for GST registration with the same PAN if he stops filing GST returns and lets his GST registration lapse.

Additionally, the taxable person must first apply for the cancellation to be overturned by paying any late fines if the government cancels a GST registration. Once the restoration is complete, properly cancel the GST or keep submitting GST reports.

As a result, the taxpayer must monitor compliance after receiving a GST registration. Therefore, if there is no economic activity, apply as quickly as possible to terminate your GST registration.