GST Cancellation - Meaning, Process, Condition, and More
As we all know, it is mandatory for every supplier, with an aggregate turnover of over twenty lakh rupees during a financial year, to take GST registration. But there are various circumstances where the proper officer can cancel this registration.
The GST law provides unbounded authority to the proper officers to cancel taxpayers’ registration when found in default. Not only this, but the law also specifies provisions where a taxpayer himself can surrender his registration.
In this article, we will learn all the implications that the GST law has on a taxpayer’s registration.
Who can Cancel the GST Registration?
Section 29 of the CGST Act, 2017 provides that a proper officer may, either suo moto or on an application made by the taxpayer or by his legal heir in case of his death, cancel the registration. The registration can be canceled in any manner or within any period as prescribed in the law.
Hence the proper officer can cancel the registration on his own if he believes that the taxpayer is in default and the registration should be cancelled. The taxpayer himself can also apply for cancellation of registration.
Circumstances where the Proper Officer can Cancel the Registration
The proper officer may cancel the registration on his own motion if:
- The registered person has contravened any provisions of the Act or rules made as may be prescribed
- The person paying tax under section 10 has not furnished returns for three consecutive tax periods
- The registered person, other than a person specified in point 2 above, has not furnished returns for a continuous period of six months
- Any person who has taken voluntary registration under sub-section (3) of section 25 has not commenced business within six months from the date of registration
- The registration has been obtained by means of fraud, wilful misstatement, or suppression of facts.
Circumstances where the Taxpayer can Apply for Cancellation of Registration
A taxpayer or his legal heir in case of death of the taxpayer may apply for cancellation or surrender of his GST registration in the following cases:
- Where the business of the taxpayer has been discontinued, transferred fully for any reason including death of the proprietor, amalgamated with other legal entity, demerged, or otherwise disposed of
- there is any change in the constitution of the business
- Where the taxable person is no longer liable to be registered under section 22 or section 24 or intends to opt out of the registration voluntarily made under sub-section (3) of section 25
How to Cancel the GST Registration - Step by Step Process
Where the taxpayer falls under the conditions mentioned above and wishes to cancel his registration, he can follow the following process. However, this process is applicable only to migrated taxpayers i.e. taxpayers who were registered in the erstwhile indirect tax law and had to mandatorily migrate to GST.
The step by step process for cancellation is as follows:
Step 1: Log in to the GST portal using a valid username and password
Step 2: Click on cancellation of "provisional registration" from the dashboard
Step 3: The cancellation of registration of the Migrated Taxpayer page will open up. The GSTIN and legal name of the business of the taxpayer will be shown on that page.
Step 4: After this, the taxpayer will be asked the reason for the cancellation of registration
Step 5: Once the taxpayer has entered the reason for cancellation, the portal will then ask if the taxpayer has issued any tax invoice in the GST regime. Select "No" in that option.
Note: This process is only for those taxpayers who have not issued any invoice in the GST regime. However, if the taxpayers who have issued invoices in the GST regime need to file Form GST REG - 16 for cancellation of registration.
Step 6: The "Verification" tab will open up where the taxpayer needs to fill in the details of the authorized signatory, place, designation, and date.
Step 7: After filling up all the required details, submit and complete the application with DSC or EVC.
Forms Applicable under Cancellation of Registration
Form GST REG-16: This form is used in the case of migrated taxpayers who have issued any invoice under the GST regime and the other taxpayers who cannot follow the above method. While filing form GST REG 16, the taxpayers need to include the following details:
- Details of input, semi finished, and finished goods held in stock as on the date on which the application for cancellation of registration is filed
- Any liability thereon
- Details of payment
Form GST REG-17: This form is used by the proper officer to issue show cause notice to the taxpayer. Where a proper officer intends to cancel a taxpayer’s registration, he issues a show cause notice to the taxpayer by filing form GST REG-17, asking why his registration should not be cancelled.
Form GST REG-18: After receiving the show cause notice, the taxpayer is required to reply to that notice, within 7 days from the date of issue of notice, in Form GST REG-18
Form GST REG-19: When the proper officer suo moto intends to cancel the registration, he issues an order in Form GST REG 19 to the taxpayer. This is treated as a formal order which is issued within 30 days from the date of application or the date of reply to the show cause notice issued.
Form GST REG-20:If the reply to the show cause notice is satisfactory, the proper officer will drop the proceedings and pass order in Form GST REG-20.
Author : Simran
Date : 04-Jul-2022
FAQs on GST Cancellation
If the GST registration is canceled, the taxpayer will not be liable to pay GST. Further, in case the registration is canceled by the proper officer but the business is still continued then it is considered as an offense. The taxpayer can be charged heavy penalties for such offense.
Yes, the cancellation of registration can be revoked by the proper officer if he deems fit. However this is applicable only in case where the cancellation has been done by the proper officer in his own motion. The application for revocation should be made within thirty days from the date of order of cancellation.
Yes, the taxpayer whose registration has been canceled needs to fill in the final return within three months from the date of cancellation or date of order of cancellation whichever is later.