GST Registration Cancellation

GST Registration can be cancelled in two ways, Voluntary cancellation of GST Registration or Cancellation of GST Registration by the department.  A business can voluntarily apply for cancellation of GST Registration when they do not have the necessary turnover or when it decides to wind up the business etc. GST Registration can be cancelled by the department for the reasons like non-compliance. The reasons for voluntary cancellation and cancellation by department are discussed in detail below:

When a business decides to voluntarily cancel the GST Registration, it has to apply for cancellation of GST Registration (surrender the GST Registration) by filing an application for cancellation in form GST-REG-16. If the GST officer, after reviewing the application, is satisfied, he will issue an order for cancellation of GST Registration in Form GST-REG-19. Few of the main reasons for cancellation of GST Registration are mentioned below:

• Closure of business
• Death of the Sole Proprietor
• Transfer of business due to amalgamation, merger, demerger etc.
• Change of PAN of the business due to change in constitution.
• Turnover falling below the threshold limit under GST

It is always advisable to cancel the GST Registration when the business is not running to avoid unnecessary hassles of filing zero returns or paying penalties on late filing.

The GST Officer may also initiate cancellation of GST Registration of a business if he has justification to cancel the same. The GST Officer may send a notice in form GST-REG-17 to show-cause why the GST Registration of a business should not be cancelled. The main reasons for initiation of GST Registration cancellation by the GST department are as below:

• A business has done voluntary registration but not started business within six months;
• A GST registration was obtained with misrepresentation;
• The assessee has failed to file GST Returns continuously, generally six months;
• The assessee has violated the GST law or rules;
• In case of improper or fraudulent claim of input tax credit;

In case of cancellation of GST registration by the department, the assessee will be given a reasonable opportunity of being heard before cancellation of the registration. The GST officer will send a notice in form GST-REG-17 to the taxpayer with specific reasons for cancellation of registration. The taxpayer will then be given chance to reply to the notice within reasonable time to show-cause why the registration should not be cancelled.

If the GST officer is satisfied with the explanation given by the assessee he may issue an order in form GST-REG-20 and dismiss the case. If the GST officer is not satisfied with the explanation given by the assessee, he may proceed with cancellation of GST Registration and issue an order in form GST-REG-19.

The prerequisite for GST Registration cancellation is to make sure that all the GST Returns including GSTR-3B, GSTR-1 and GSTR-9 are filed until the month of cancellation.

Once all the GST Returns are updated, the assessee may file GST Registration cancellation request in form GST-REG-16 on the GST portal by including the below mentioned information:

• Reason for cancellation of GST Registration;
• Date of cancellation of Registration;
• Details of latest GST Return filed by the assessee;
• Contact details of the assessee with contact number and email I’d;
• Details of stock; capital goods and input tax credit available on the date of cancellation

The GST officer will review the application for cancellation of Registration and issue an order for cancellation of GST Registration in form GST-REG-19.

After cancellation of GST Registration and receipt of GST-REG-19, the assessee is required to file the final return of GST in Form GSTR – 10 within three months of cancellation of registration. The GSTR – 10 makes sure that there are no pending GST liabilities by the assessee.

In case of non-filing of the last return of GST, the GST officer may send a notice in form GSTR – 3A to the assessee asking him to furnish the GSTR – 10 within given time.

In case of non compliance of notice in Form GSTR – 3A, the GST  officer may determine the liability of the assessee based on the available facts.

The GST officer will review the application for cancellation of Registration and issue an order for cancellation of GST Registration in form GST-REG-19.

The GST officer may reject the application for cancellation of GST registration in below mentioned circumstances:

• In case where the cancellation is due to amalgamation, merger, demerger etc, the new entity has not availed registration;
• In case the application for cancellation of registration is incomplete

The GST officer issues a notice in writing to the assessee regarding the discrepancies to which the assessee may reply within given time period. The GST officer may reject the application for cancellation of GST Registration in case the assessee does not reply to the notice within given time.

If a business is not carrying any business activity after GST Registration, it is always advisable to voluntarily cancel the GST Registration. If the assessee stops filing GST Returns without cancelling the GST Registration, the same PAN will never be allotted a new GST Registration in future.

The assessee should always file the GST Returns on time to avoid cancellation of GST Registration by the department to make sure that he is not denied GST Registration in future.