GST Registration Cancellation

A Guide on GST Registration Cancellation

You can cancel your GST registration if the tax authorities demand it if you're closing down your business or profession, or if the GST requirements do not apply to you. The Central Goods and Service Tax Act, 2017, governs essential issues such as the cancellation, suspension, and revocation of GST registration. Lawgical Adda will provide several situations under which a GST registration can be cancelled and the associated online cancellation procedures. 

Significance of terminating a GST registration.

The simple definition of cancellation of GST registration is the taxpayer's disappearance from the GST register. He won't be required to file GST returns because he won't be required to pay GST, collect it, or claim the input tax credit.

Taxpayer Cancellation of Registration:

A taxpayer may request to have his GST registration cancelled in the following circumstances:

• The company has shut down.
• The company has been completely transferred for any cause, such as the owner's passing, or it has merged, split up, or been otherwise disposed of by the transferee; alternatively, the company's charter has changed.
• The taxable person wishes to voluntarily opt out of the registration made under sub-section (3) of section 25 or is no longer subject to registration under sections 22 or 24.

Departmental Cancellation of Registration:

The Central Goods and Service Tax Act, 2017 (hereafter referred to as the "CGST Act") gives the appropriate officer the authority to revoke a person's registration as of any date, including any retrospective date, for any cause he sees suitable. The Central Goods and Service Tax Rules, 2017 (hereafter referred to as the "CGST Rules") should be read in conjunction with the CGST Act of 2017.

Declining GST Registration Status:

After the original CGST Act, the CGST (Amendment) Act, 2018 contained rules regarding the suspension of GST registration, which became effective on February 1, 2019. Moreover, Rule 21A was added to the CGST Rules as of the date as mentioned earlier.

The CGST Act's proviso to Section 29(1) states that the GST registration will remain suspended for the duration and in the manner specified in Rule 21A of the CGST Rules while the cancellation procedures are pending.

Why will the officer cancel the registration?

Cancelling the registration is possible if the taxpayer:

(a) Does not carry out any business activities from the stated location of operation OR 

(b) Generates an invoice or bill without providing the goods or services—that is, in contravention of the provisions—OR 

(c) Disregards the anti-profiteering clauses (by failing to give clients the benefit of ITC, for example) OR

Commencing on January 1, 2021:

(d) With certain restrictions, using the input tax credit (ITC) from the computerised credit ledger to pay off more than 99% of the tax obligation owed by specific taxpayers who have violated Rule 86B and whose monthly total taxable value of supply exceeds Rs. 50 lakh.

(e) A taxpayer whose inability to file GSTR-3B for more than two consecutive months (or one quarter for those who choose to participate in the QRMP program) prevents them from filing GSTR-1 OR 

(f) Uses the input tax credit in contravention of the regulations or section 16 of the Act.

Who Is Not Eligible to File a GST Cancellation of Registration Request?

Tax Collectors and Deductors: Cancellation requests are not accepted from those specifically registered to deduct or collect taxes.

Holders of Unique Identity Numbers (UINs): Organizations or persons assigned to UINs, such as UN agencies, foreign diplomatic missions, etc., cannot file to cancel their GST registration. They are provided with the UIN to request a tax refund on their imported goods.

Nevertheless, a person who voluntarily registers for GST is only eligible to ask for the cancellation of their registration after a year has passed since the registration's effective date.

Information Needed to File a Cancellation of Registration under the GST

When applying to cancellation using Form GST REG-16, the applicant is required to provide the following details:

• Email address and mobile number are included in the contact address.
• Reasons for cancellation.
• The preferred cancellation date.
• specifics regarding the cost and taxes due on the capital goods/plant and machinery stock, the inputs available in semi-finished goods, the inputs available in finished goods, and the available in stock.
• If the current unit was transferred, merged, or amalgamated, information about entity registration.
• details from the taxpayer's most recent return and the ARN for that specific return.

Revocation of registration cancellation

What does it mean to revoke or cancel?

Revocation is the formal term for breaking a commitment or decision. Revocation of cancellation of registration denotes a reversal of the cancellation decision, maintaining registration validity.

When is it appropriate to revoke a cancellation?

This is only relevant when the tax officer voluntarily cancels a taxable person's registration. Within thirty days of the cancellation order date, the taxable person may apply to the officer to revoke the cancellation.

Final Return

If a person's registration is cancelled, they have three months from the date of cancellation or the order of cancellation, whichever comes first, to file a final GST return in Form GSTR-10.

This is done to make sure the taxpayer is free from any obligations that would have arisen under Section 29 of the CGST Act.

Note that this rule does not apply to Input Service Distributors or non-resident taxpayers who are obligated to pay tax under section 10, section 51, or section 52.

In summary:

It is important to abide by provisions like timely updating the place of business, including any additional locations in the GST registration, maintaining a monthly reconciliation between the outward supplies reported in GSTR-1 & GSTR-3B and ITC availed as per GSTR-3B & GSTR-2B, and timely filing of returns, since the number of cases where the department cancels registrations retroactively is on the rise. By taking these steps, the possibility of a registration cancellation from a retrospective date would be decreased.

Lawgical Adda can assist you if you need expert support with the GST registration cancellation procedure. Thanks to our extensive knowledge and competence, we can expedite the procedure and guarantee that all requirements are fulfilled accurately and on schedule. Contact us Now!