When you decide to close your business or if a tax officer initiates the cancellation process, it's crucial to understand how GST registration cancellation works. In this article, we'll guide you through the various aspects of GST registration cancellation, including its meaning, consequences, and the processes involved.
What Does GST Registration Cancellation Mean? :-
Cancellation of GST registration simply signifies that a taxpayer will no longer hold GST registered status. Consequently, they won't be required to pay or collect GST, claim input tax credits, or file GST returns.
Consequences of GST Registration Cancellation :-
- No GST Payments: Once your GST registration is canceled, you won't be liable to pay GST anymore.
- Legal Implications: For certain businesses, GST registration is mandatory. Continuing business operations without a valid GST registration can result in legal violations under GST laws, leading to substantial penalties.
Who Can Initiate GST Registration Cancellation? :-
GST registration cancellation can be initiated by the taxpayer, tax authorities, legal heirs, or new owners in cases of business transfer. The process and requirements may vary by country and region. In India, taxpayers can apply for cancellation if they no longer meet registration criteria. To ensure compliance, it's advisable to consult with tax professionals and refer to official tax authority guidelines.
Cancellation of GSTIN for Migrated Taxpayers :-
If you were registered under previous indirect tax laws, you were required to migrate to GST, even if you may not have met the GST registration threshold. To cancel your GSTIN in such cases:
- Submit an application electronically using form GST REG-29 on the GST portal.
- The proper officer will conduct an inquiry and subsequently cancel the registration.
Steps for Cancelling GSTIN by Migrated Taxpayers on the GST Portal :-
Step 1: Log in to the GST Portal and select "Cancellation of Provisional Registration."
Step 2: Provide the reason for cancellation and information about any tax invoices issued during the month. Additionally, fill in details of authorized signatories and sign off accordingly.
Cancellation by Taxpayer (Other than Migrated) :-
A taxpayer may seek cancellation of their GST registration for various reasons, including business discontinuation, full business transfer, amalgamation, demerger, or a change in the business's constitution. To do this:
- File an application for cancellation in form GST REG 16.
- Include details of inputs, semi-finished, finished goods in stock, liability, and payment information.
- The proper officer will issue an order in form GST REG-19 within 30 days, specifying the effective cancellation date.
Cancellation by Tax Officer :-
A tax officer can cancel your GST registration if you:
(a) Do not conduct any business at the registered location.
(b) Issue invoices without supplying goods/services.
(c) Violate anti-profiteering provisions.
(d) Utilize ITC from electronic credit ledger excessively, violating Rule 86B.
(e) Fail to file GSTR-1 due to non-filing of GSTR-3B for two consecutive months (or one quarter for QRMP scheme participants).
(f) Avail input tax credit in violation of Section 16 of the Act or the rules.
Procedure for Cancellation by Tax Officer :-
- The tax officer will issue a show-cause notice in form GST REG-17.
- The taxpayer must respond in form REG–18 within 7 days, justifying why their registration should not be canceled.
- If the response is satisfactory, the proceedings will be dropped, and an order in form GST REG–20 will be issued.
- If cancellation is deemed necessary, the tax officer will issue an order in form GST REG-19 within 30 days from the response date.
Revocation of Cancellation of Registration :-
Revocation of cancellation means reversing the decision to cancel registration, reinstating its validity. This option is available when the tax officer initiates cancellation.
Procedure for Revocation of Cancellation :-
- Submit an application for revocation in form GST REG-21 within 30 days from the cancellation order date.
- The tax officer may revoke the cancellation by issuing an order in form GST REG-22 within 30 days, stating the reasons.
- If the application is rejected, a show-cause notice in form GST REG–23 is issued. Respond with form GST REG-24 within 7 working days.
- The proper officer will make a decision within 30 days of receiving the clarification in form GST REG-24.
Please note that revocation cannot be sought if registration was canceled due to non-filing of returns. In such cases, file pending returns and pay all dues before reapplying for registration.
Can a Business Register for GST After Cancellation? :-
Yes, a business can register for GST again after cancellation, except when the cancellation was initiated by the tax officer.
For more information on GST registration and related topics, explore additional articles by Clear Tax:
- Procedure for GST Registration Cancellation by Tax Officer
- All You Need to Know About the Revocation of Cancelled GST Registration
- Cases of Suspension of GST Registration and What to Do
- Filing of GSTR-10: Final Return Under GST"