Cancellation of GST Registration- Brief Study

Cancellation of GST registration means you are not more liable to pay tax or file the return. GST registration must be cancelled within 21 days of selling or closing of the business. A GST no obtained in India can be cancelled by the registered person or by an Officer or by the legal heirs.

Person Applicable for Cancellation of GST Registration:

In the case of death of such person who is liable to file GST return his Legal Heirs, representative, of the registered person should apply for cancellation of GST registration.

GST registration must be cancelled at the time of selling or closing of the business or in the case of merger of the business.

A person who obtained GST registration voluntarily can not apply for the cancellation of GST registration.

A GST registration granted to a person can be cancelled by an Officer, if:

• If the taxable person does not conduct any activity from the registered place of business.

• Issues invoice or bill without supply of goods or services in violation of the GST Act and/or GST rules.

Before the cancellation of the GST registration, Officer would have to issue a notice to the person whose GST registration has to be cancelled, requiring 7 days show cause notice from the date of service of such notice as it is to be mentioned why GST registration is to be cancelled. The registered person can reply to the show cause notice within the prescribed time or the GST registration can stand cancelled.

 How to Cancel GST Registration:

1. Pay Input Tax Credit equal to Stock of Goods.
2. File Final GST Return effecting Cancellation.
3. Return shall be filed in 3 Months from Cancellation.
4. The format is prescribed in GSTR-1.
5. Follow Schedule-I

Cancellation of Registration by GST Officer:

Proper officer shall cancel the registration by giving the person an opportunity of being heard on the following grounds:

1. Registered person has contravened provisions of the Act or the rules made there under as may be prescribed;
2. Composition tax payer has not furnished returns for three consecutive tax periods;
3. Normal tax payer has not furnished returns for a continuous period of six months;
4. Person opted for voluntary registration has not commenced business within six months from the date of registration;
5. Registration has been obtained by means of fraud, willful misstatement or suppression of facts.

GST registration cancellation procedure:

 Through GST migration process, all the taxpayers registered under existing laws have been automatically migrated to GST regime. But the exemption threshold limit for registration under GST has been increased to Rs. 20 Lakhs. Such persons below taxable limit apply for cancellation of registration or may be cancelled by proper officer on his own motion for the reasons prescribed u/s 29(1) of CGST Act, 2017. This article discusses in detail about GST registration cancellation procedure.

Cancellation by the registered person himself

A registered GST person can himself/herself cancel their registration in one of the following conditions:

• If your turnover is not more than 20 lakh and you have registered on the portal, but you do not want to file the return. Then, you should get it deactivated ASAP, otherwise, you may receive a tax notice from the government.
• If your business has been discontinued.
• The business has been sold or transferred to some other party. That other party needs to register under GST.
• If the person or business is no longer liable for GST registration. (Like if the registration threshold is increased later by the government and you get out from its cover).

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