June 5, 2023

Cancellation of GST Registration

The GST registration might be revoked for a variety of reasons. The department may begin the cancellation on its own initiative, or the registered individual may ask for cancellation of GST registration. In the event that a registered individual dies, the legal heirs may petition for cancellation of GST Registration. There is a mechanism for reversal of the cancellation if the registration has been revoked by the department. When a registration is cancelled, the individual is required to file a return known as the final return.

The reason for the cancellation of GST Registration

Cancellation of registration is possible for the following reasons:

  1. A person who is registered under any existing legislation but is not required to register under the GST Act;
  2. The business has been discontinued, entirely transferred for whatever cause, including the proprietor’s death, amalgamated with another legal entity, demerged, or otherwise disposed of;
  3. There is a modification in the type of business’s constitution;
  4. The taxable person (other than a person who has voluntarily registered under section 25 of the CGST Act, 2017) is no longer required to register;
  5. A registered person has violated such provisions of the Act or the rules promulgated thereunder;
  6. A person or Individual paying Composition levy has not filled returns for three consecutive tax periods; or any registered person other than Composition levy payer who has not filled returns for a continuous period of six months;
  7. Any individual who has taken voluntary registration under section 25 sub-section (3) but has not started a business within six months of registration;
  8. Registration was acquired via deception, will full misrepresentation, or suppression of facts

 

Cancellation procedure

  • A person who is already registered under any of the existing laws (Central Excise, Service Tax, VAT, etc.) but is no longer required to be registered under the GST Act must apply electronically at the common portal by 31 ST December 2017, in FORM GST REG-29, for the cancellation of the registration granted to him. After conducting such an investigation as considered necessary, the Superintendent of Central Tax shall revoke the stated registration.
  • If the Superintendent of Central Tax has reason to believe that a person’s registration is liable to be cancelled, he will be served with a notice in FORM GST REG-17 requiring him to show cause, within seven working days of the date of service of such notice, why his registration should not be cancelled.
  • Within seven working days of receiving the show cause notice, the registered person must respond in FORM REG-18.
  • If the show cause notice response is judged to be adequate, the Superintendent of Central Tax will dismiss the proceedings and issue an order in FORM GST REG-20.
  • The registered person whose registration is cancelled shall pay an amount equal to the credit of input tax in respect of the inputs held in stock and the inputs contained in finished products or semi-finished held within stock or  plant and machinery or capital goods on the day immediately preceding the date of such cancellation, whichever is greater.
  • In the case of capital goods or plant and machinery, the taxable person shall pay an amount equal to the in-put tax credit claimed on the said capital goods or machinery and plant, reduced by such percentage points as may be prescribed, or the tax on the transaction value of such capital goods or machinery and plant, whichever is greater.
  • The cancellation of registration has no effect on the person’s duty to pay tax and other dues for any time previous to the date of cancellation, whether determined before or after the date of cancellation.

Final Results

When the registration of a registered person other than an Input Service Distributor, a non-resident taxable person, or a person paying tax under the composition scheme or TDS/TCS; is cancelled, the person must file a final return electronically in FORM GSTR-10 through the common portal, either directly or through a Facilitation Centre notified by the Commissioner, within three months of date of GST cancellation or date of order of GST cancellation, whichever is later.

 

Cancellation Revocation

  1. If the registration is cancelled by the Proper Officer (Superintendent of Central Tax) on his own initiative rather than on the basis of an application.
  2. However, if the registration has been cancelled due to failure to furnish returns, an application for revocation shall be filed only after such returns have been furnished and any amount due as tax in terms of such returns, as well as any amount payable to-wards interest, penalty, and late fee in respect of the said returns, has been paid.
  3. Upon examination of the application, if the Proper Officer (Assistant or Deputy Commissioners of Central Tax) is satisfied, for reasons to be recorded in writing, that there are sufficient grounds for revo-cation of cancellation of registration, he shall revoke the cancellation of registration by an order in FORM GST REG-22 within thirty days of the date of receipt of the application.
  4. However, if the Proper Officer (Assistant or Deputy Commissioners of Central Tax) is not satisfied after looking at the revocation application, he will issue a notice in FORM GST REG-23 requiring the applicant to show cause why the revocation application should not be rejected, and the applicant must furnish the reply within seven working days from the date of service of the notice in FORM GST REG-24.
  5. Upon receipt of the information or clarification in FORM GST REG-24, the Proper Officer (Assistant or Deputy Commissioners of Central Tax) shall dispose of the application within thirty days of the date such information or clarification was received from the applicant. If the information or explanation supplied is sufficient, the Proper Officer (Assistant or Deputy Commissioners of Central Tax) shall dispose of the application in accordance with paragraph (iii) above. If it is not satisfactory, the applicant must be given an opportunity to be heard, after which the Proper Officer (Assistant or Deputy Commissioners of Central Tax) may, by order in FORM GST REG-05, reject the application for revocation of cancellation.
  6. A revocation of cancellation of registration under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act, as applicable, is regarded to constitute a revocation of cancellation of registration under the Central Goods and Services Tax Act.

 

FAQS For GST Cancellation

Q1. Will I be notified if my registration is cancelled due to Suo Moto?

Answer: Yes. Registration cannot be terminated unless the taxpayer receives a Show Cause Notice and a reasonable chance to be heard by the Tax Official. Thus, in the event of Suo Moto cancellation of registration, the Tax Official/Property Officer will send a Show Cause Notice to the taxpayer, and the taxpayer will be given the opportunity to provide explanations within the time period specified.

Q2. What is the prerequisite for Suo Moto Registration Cancellation?

Answer: As indicated in Section 29(2) of the CGST/SGST Act, there must be a valid grounds for the beginning of a process for Suo moto cancellation.

Q3. How long do I have to file a response to the Show Cause Notice about Suo Moto Cancellation of Registration?

Answer: You must respond to the Show Cause Notice (SCN) within the time restriction of 7 working days by utilising the Services > Registration > Application for Filing Clarifications page. If no answer is received within the statutory 7 working days, the Tax Official may cancel the registration.

Q4. What happens once the Show Cause Notice is withdrawn?

Answer: If the Tax Official is pleased with the taxpayer’s response to the Show Cause Notice, the proceedings can be terminated.

  1. The dropping of SCN will be communicated to the Primary Authorised Signatory through SMS and email.
  2. The issuance of an order to remove a SCN will also be sent to the Primary Authorised Signatory through email and SMS.
  3. The order will be available for viewing, printing, and downloading on the taxpayer’s dashboard.
  4. The GSTIN status will change from “Proceeding for Cancellation Initiated” to “Active”.

Q5. What is the effective date of registration cancellation?

Answer: The cancellation will take effect on the date specified in the cancellation order.

Q6. Does the termination of my registration imply that I am no longer liable?

Answer: No, all liabilities incurred previous to the date of suo moto cancellation must be paid by the taxpayer, regardless of when the liabilities are determined. Any responsibility associated with that specific GSTIN must be paid by the taxpayer. It can be retrieved later, even after the GSTIN has been cancelled.

Q7. Will the Suo moto registration cancellation be handled independently for each act?

Answer: Cancellation of registration under the CGST Act, SGST Act, UTGST Act, or IGST Act is treated as cancellation of registration under the SGST Act, UTGST Act, or CGST Act, respectively, and vice versa.

Q8. Will I be able to check in after cancelling my registration on my own?

Answer: Yes, you may use the GST Portal after cancelling your registration suo moto.

Q9. Can I change my email and phone number after cancelling my registration on my own?

Answer: After the cancellation order is issued, you will not be able to change your registration. However, email addresses and mobile phone numbers can be modified until the outstanding balance or refund is received.

Q10: Can I submit earlier period returns following suo moto registration cancellation?

Answer: After suo moto cancellation of registration, you may file returns for the previous period (i.e. for the time prior to the date of cancellation specified in the cancellation order). However, you will not be able to submit returns or upload invoices for the period after the date of cancellation specified in the cancellation order. Furthermore, GSTP will be unable to carry out GSTP responsibilities on your behalf for a period of time following the cancellation date specified in the cancellation order.

Q11. Where can I get the Suo Moto Cancellation of Registration Show Cause Notice?

Answer: Select Services > User Services > View Notices and Orders to see the Suo Moto Cancellation of Registration Show Cause Notice. To learn more, visit https://tutorial.gst.gov.in/userguide/taxpayersdashboard/index.htm#t=View_Notices_and_Demand_Orders.htm

Q12. How do I respond to the Suo Moto Cancellation of Registration Show Cause Notice?

Answer: To respond to the Show Cause Notice regarding Suo Moto Cancellation of Registration, go to Services > Registration > Application for Filing Clarifications. To learn more, visit  https://tutorial.gst.gov.in/userguide/registration/index.htm#t=Application_for_Filing_Clarification.htm.

Q13: Where can I get the date for the Suo Moto Cancellation of Registration personal hearing?

Answer: Select Services > User Services > View Notices and Orders to see the Suo Moto Cancellation of Registration Show Cause Notice. To view the personal hearing date, download the notification. To learn more, visit https://tutorial.gst.gov.in/userguide/taxpayersdashboard/index.htm#t=View_Notices_and_Demand_Orders.htm

Q14. Where can I get the Suo Moto Cancellation of Registration Order?

Answer: Select Services > User Services > View Notices and Orders to see the Suo Moto Cancellation of Registration order. To learn more, visit https://tutorial.gst.gov.in/userguide/taxpayersdashboard/index.htm#t=View_Notices_and_Demand_Orders.ht

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