Cancellation of GST Registration – A Complete Guide

As known world-wide, the Goods and Service Tax (GST) has been made effective from 1^st July 2017 in India. Following article highlights various provisions affecting cancellation of GST registration and procedure thereon.

Persons Who Can Apply For Cancellation of GST Registration 

Following persons can apply for cancellation of GST registration –

1. Registered taxpayer;

2. An officer on his own accord;

3. Legal heirs, in case of death of the taxpayer.

Probable Reasons For Cancellation of GST Registration

Following are the circumstances under which registered taxpayer can apply for cancellation of GST registration –

1. Closure / discontinuation of the business;

2. When a taxable person ceases to be liable to pay tax;

3. In case of transfer of business due to amalgamation or merger or de-merger or sale or lease etc.;

4. In case of a change in PAN due to change in the constitution of business;

5. Non-commencement of business within the specified time limit;

6. In the case were the taxable person is no longer liable to be registered under the Goods and Service Tax Act.

Procedure For Cancellation Of Registration By The Officer On His Own Accord 

Following is the procedure to be followed by the officer in case he has a reason to cancel the GST registration of the taxpayer –

1. The proper officer is required to raise a show cause notice in form GST REG-17;

2. The taxpayer, on receipt of the notice from the proper officer, is required to file a suitable reply in form GST REG-18 within a period of 7 days from the date of receipt of the show cause notice;

3. If the proper officer is satisfied with the reply provided by the taxpayer, he would cancel the proceedings and issue an order in form GST REG-20;

4. If the proper officer is not satisfied with the reply provided by the taxpayer, he will issue an order in form GST REG-19.

5. The proper officer is required to issue an order, either in form GST REG-20 or GST REG-19, within a period of 30 days from the date of reply by the taxpayer.

Procedure For Voluntary Cancellation Of GST Registration By The Taxpayer

Following steps needs to be followed for online cancellation –

1. Login to the site gst.gov.in using the username and password;

2. Navigate to the Services > Registration > Application for cancellation of registration option.

3. Form GST REG-16 is the application form which would be opened by navigating the above option.

4. Details like GSTIN, the name of the business and address would be auto-filled;

5. From the drop-down list, the reason for cancellation needs to be selected by the applicant;

6. Enter the value of stock and respective tax liability of the stock;

7. Enter the value to set-off the tax liability either from the Electronic cash ledger or Electronic credit ledger or both;

8. Tick the verification box and mention the name of authorized signatory and place;

9. Now select SUBMIT WITH DSC OR SUBMIT WITH EVC.

Following persons are eligible to sign the application form digitally –

Procedure For Cancellation Of Gst Registration In Case Of Death of Sole Proprietor

In case of death of the sole proprietor, the legal heir / successor of the sole proprietor are required to file an application for cancellation of GST registration in form GST REG-16, manually. The legal heirs are required to file their application before the concerned tax authorities.

Checkout GST Calculation Worksheet Examples Here