GST Cancellation

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What is GST Cancellation?

GST registration can be cancelled for specified reasons. Either the department on their own motion or the registered person can voluntarily initiate for the cancellation of their registration. In case the registered person dies, application for cancellation can be filed by his/her legal representatives. When the registration has been cancelled by the department, the taxpayer can apply for revocation of the cancellation. Once cancelled, the registered person has to file a return which is called the final return.

Table Of Contents

Overview

Cancellation of GST registration basically means that the registered person under GST is surrendering his liability to pay tax or collect tax.

1. Cancellation of GST Registration by Officer

GST registration can be cancelled by an officer under the following circumstances:-

  •  Registered person does not conduct any business from the registered place
  •  Violates any prescribed rule and provisions under the GST act as prescribed.
  •  GST returns are in default for a continuous period of 6 months (in case of composition taxpayer returns for 3 consecutive tax periods)

However, the officer is required to give a notice to such a registered person before cancelling his GST registration. If the registered person does not reply to the notice within the given time frame, the GST registration stands cancelled.

2. Voluntary cancellation of GST registration

A registered person can voluntarily cancel his GST registration under the following circumstances:-

  •  Shutting down of business
  •  Transfer of business, merger, de-merger or amalgamation
  •  Change in PAN in lights of change in the constitution of Business or any other pertinent reasons
  •  Turnover falls below the threshold limit
  •  In case of sole proprietor, its death or its insolvency.
  •  Any other reason as prescribed under GST law.

It is important to note that before applying for voluntary registration the taxpayer must have filed all his GST returns.

Steps for Cancellation

1) In case of voluntary cancellation of GST registration, the taxpayer must make an application in Form GST REG – 16 on the GST portal online. The application form asks for the following details from the taxpayer :-

  •  Reason for cancellation
  •  Date from which the registration is required to be cancelled
  •  In case the business is transferred, amalgamated, de-merged, particulars of the entity to whom such transfer, de-merged has been entered with.
  •  Particulars of last return filed
  •  Amount of tax payable on the inputs/ capital goods held in stock on the effective date of cancellation (Taxpayer needs to pay back the input tax contained in the stock of inputs, semi-finished goods, finished goods, and capital goods or the output tax liability on such goods – whichever is higher to the department because input tax credit on the existing stock cannot be claimed on cancellation of GST registration.)
  •  Details of tax paid, if any through credit ledger or cash ledger

2) Once the GST registration stands cancelled, the taxpayer is then required to file a final GST return in FORM GSTR 10. This form needs to be filed within 3 months from the date of cancellation on the GST portal. This form ensures that the taxpayer has cleared all his GST liabilities.

Non-acceptance of cancellation application

The Assessing officer can reject the application under following situation:

  • The application is incomplete.
  • The new entity to whom the business is transferred, or is merged or amalgamated with has not obtained a registration with the tax authority prior to the submission of application.

In such a case, the assessing officer shall provide the taxpayer with an opportunity to be heard by giving a written intimation to the applicant regarding the nature of the discrepancy. The applicant is then required to respond to the same within 7 days of the date of receipt of the letter, failing which the concerned Officer may reject the application after

Requisites

Cancellation of GST registration with the help of ICI GST experts

Our GST experts at ICI, can help you get rid of your GST registration with our simplified online process.

Follow the below steps to quickly get yourself free from GST provisions:-
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FAQs

a. By when should a person apply for cancellation of GST registration

In case of voluntary registration, a person should apply for GST cancellation within 30 days from the date when he was liable to cancel.

b. Do I have to pay any governmental fee for cancellation of GST registration?

No, there is no governmental fee for cancelling your GST registration.

c. Who are not required to file the Final return – GSTR10 ?

Input Service Distributor or a non-resident taxable person or a person paying tax under the composition scheme are not required to file the Final return.

d. What happens if Form GSTR 10 is not filed within 3 months from the date of cancellation order?

If the final GST return is not filed within the given time limit in Form GSTR-10, the department will issue a notice to the taxpayer, asking him/her to file the return within 15 days from the date of such notice. If still the compliance is not made then the officer may reject the cancellation application.

e. Can we file GST returns after cancellation?

No, once your cancellation has been approved, the only GST return you can file is Form GSTR-10.

f. What happens when the registration is cancelled by the officer on his own motion?

In this case, if the taxpayer is not satisfied with the officer’s decision, he can apply for revocation of cancellation within 30 days from the date of service of cancellation order on the common portal.

g. How will I know if my GST registration is cancelled by the officer?

You will receive a show cause notice on your registered email ID when the officer on his own cancels the GST registration to which you have to reply in 7 days.

h. For how long is the GST registration valid?

GST registration is valid until it is cancelled or suspended. However, GST registration granted to casual or non-resident taxpayers is valid only for a limited period.

i. Still Confused?

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