Cancellation of registration [Section 29 read with Rule 20-22]
- Cancellation of registration [Section 29 read with Rule 20-22]
- When GST Registration can be cancelled
- Who can cancel the GST registration?
- Cancellation of GST Registration when Turnover is less than 20 lakhs
- Steps for cancelling GST Registration on GST Portal
- Why does a taxpayer wish to cancel his GST registration?
- Forms for cancellation of GST registration
- Cancellation by tax officer of GST registration
- Procedure to be followed by officer for GST registration Cancellation
Any Registration granted under the CGST Act may be cancelled by the proper officer either on his own motion or on an application filed by the registered person or by his legal heirs, in case of death of such person.
A registered person, other than a person to whom a unique identification number has been granted under Rule 17 or a person to whom registration has been granted on the basis of TAN under Rule 12, can seek cancellation of his registration.
In respect of a taxable person who has obtained voluntary registration, the application for cancellation of registration would not be entertained before expiry of 1 year from effective date of registration.
When GST Registration can be cancelled
A registration granted can be cancelled when –
- The business is discontinued, transferred fully for any reason including death of the proprietor, amalgamated with other legal entity, de-merged or otherwise disposed of; or
- There is any change in the constitution of the business; or
- The taxable person, other than the person registered under Section 25(3), is no longer liable to be registered under Section 22 or Section 24; or
- The registered person does not conduct any business from the declared place of business [Rule 21]; or
- The registered person issues bill or invoice without supply of goods and/or services in violation of the provisions of the Act or the Rules made thereunder. [Rule 21]
- Where registered taxable person has contravened the provisions of the Act as may be prescribed
- A composition supplier has not furnished returns for 3 consecutive tax periods/ any other person has not furnished returns for a continuous period of 6 months
- Non-commencement of business within 6 months from date of registration by a person who has registered voluntarily.
- The registered person violates provisions of Section 171 of the Act or rules
Proper officer may cancel the registration of a person from such date, including retrospective date, as he may deem fit only after affording an opportunity of being heard, when – a registered taxable person has contravened such provisions of the Act or the rules made there under as may be prescribed; or Registration 37 a person paying tax under Composition Scheme has not furnished returns for three consecutive tax periods; or
- any registered person, other than the person paying tax under composition scheme, has not furnished returns for a continuous period of six months; or
- any person who has taken voluntary registration and has not commenced business within 6 months from the date of registration; or
- where registration has been obtained by means of fraud, willful misstatement or suppression of facts.
Cancellation of registration, shall not affect the liability of the taxable person to pay tax and other dues under the Act for any period prior to the date of cancellation whether or not such tax and other dues are determined before or after the date of cancellation.
Cancellation of registration under SGST or UTGST Act shall be deemed to be a cancellation of registration under the CGST Act or vice versa
Notice of hearing and opportunity of being heard is a MUST before cancellation
Where the registration is cancelled, the registered taxable person shall pay an amount equivalent to the credit of input tax in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock on the day immediately preceding the date of such cancellation or the output tax payable on such goods, whichever is higher. The payment can be made by way of debit in the electronic credit or electronic cash ledger. In case of capital goods, the taxable person shall pay an amount equal to the input tax credit taken on the said capital goods reduced by the prescribed percentage points or the tax on the transaction value of such capital goods [under sub-section (1) of section 15 (Value of Taxable supply) of Act], whichever is higher. The amount payable under these provisions shall be calculated in accordance with the generally accepted accounting principles.
For ease of reference the brief of Registration Rules with regard to Cancellation of Registration are provided in a flowchart form:
GST Registration Cancellation using Portal
Who can cancel the GST registration?
Cancellation of GST registration can be done by-
*** Application for cancellation, in case of voluntary registrations made under GST, can be made only after one year from the date of registration.
Let us take up each case.
Cancellation of GST Registration when Turnover is less than 20 lakhs
Every person who was registered under old laws had to mandatorily migrate to GST. Many such persons are not liable to be registered under GST.
For example, the threshold under VAT in most states was 5 lakhs whereas it is 20 lakhs under GST. However, do make sure you are not making inter-state supplies since registration is mandatory for inter-state suppliers except for service providers.
Such a taxpayer can submit an application electronically in FORM GST REG-29 at the common portal.
The proper officer shall, after conducting an enquiry as required will cancel the registration.
Steps for cancelling GST Registration on GST Portal
Log in to the GST Portal and click the Cancellation of Provisional Registration
- The Cancellation page opens.
- Your GSTIN and name of business will show automatically.
- You are required to give a reason for cancellation.
You will be asked if you have issued any tax invoices during the month.
Simply fill up the details of authorized signatories, place. Finally, sign off with EVC with you are a proprietorship or a partnership. LLPs & Companies must mandatorily sign with DSC.
Note: Taxpayers who have not issued tax invoice can avail above service. If the taxpayer has issued any tax invoice then FORM GST REG-16 needs to be filed. Refer below.
Cancellation of GST Registration by taxpayer in other cases
Why does a taxpayer wish to cancel his GST registration?
- The business has been discontinued
- The business has been transferred fully, amalgamated, demerged or otherwise disposed —The transferee (or the new company from amalgamation/ demerger) has to get registered. The transferor will cancel its registration if it ceases to exist.
- There is a change in the constitution of the business (For example- Private limited company has changed to a public limited company)
Forms for cancellation of GST registration
All those who cannot follow the above method must file an application for cancellation in FORM GST REG 16. The legal heirs of the deceased taxpayer will follow the same procedure as below.
- Application for cancellation has to be made in FORM GST REG 16.
- The following details must be included in FORM GST REG 16-
- Details of inputs, semi-finished, finished goods held in stock on the date on which cancellation of registration is applied
- Liability thereon
- Details of the payment
- The proper officer has to issue an order for cancellation in FORM GST REG-19 within 30 days from date of application. The cancellation will be effective from a date determined by the officer and he will notify the taxable person
Cancellation by tax officer of GST registration
Why will the officer cancel registration?
The registration can be cancelled, if the taxpayer-
(a) Does not conduct any business from the declared place of business OR
(b) Issues invoice or bill without supply of goods/services (i.e., in violation of the provisions) OR
(c) Violates the anti-profiteering provisions (for example, not passing on benefit of ITC to customers)
Procedure to be followed by officer for GST registration Cancellation
- If the proper officer has reasons to cancel the registration of a person then he will send a show cause notice to such person in FORM GST REG-17.
- The person must reply in FORM REG–18 within 7 days from date of service of notice why his registration should not be cancelled.
- If the reply is found to be satisfactory, the proper officer will drop the proceedings and pass an order in FORM GST REG –20.
- If the registration is liable to be cancelled, the proper officer will issue an order in FORM GST REG-19. The order will be sent within 30 days from the date of reply to the show cause.