What is GST Registration Cancellation Process?
GST registration cancellation process is required in the cases when you’ are winding up your business due to any reason or you have received a notice from the tax officer regarding GST cancellation or in the cases described later in this blog.
While searching for simple GST registration cancellation procedure, you will get myriads of options by which you will be bewildered. But, in this blog, we have tried to explain the GST registration cancellation procedure in quite a simple way. Moreover, we have covered the following topics in this blog:
- Reasons why people cancel GST registration
- Consequences of cancellation
- Procedure for cancellation of GST registration
Reasons why people cancel GST registration
There could be various reasons why people want to cancel the GST registration. A few of them are as follows:
- The person doesn’t want to operate the business and hence, he is willing to shut the profession;
- In case, the person’s annual turnover has gone less than Rs. 20 lakhs;
- If GST doesn’t apply to the person anymore;
- In case, the person had the registration under GST inadvertently, he/she can choose to cancel the registration;
- If the person has sold the business to somebody else, then he needs to cancel the GST registration, while the new owner is supposed to get new GST registration.
Consequences of cancelling or surrendering GST registration
After the cancellation of the GST registration, there will be the following consequences:
- The taxpayer won’t be able to pay GST anymore, and
- If the taxpayer has cancelled the GST registration and is still operating the business, then the person will have to pay a heavy penalty of minimum Rs. 10,000 or jail term of 1 year depending on the type of offence.
Who can cancel the GST registration?
Any of the following can cancel the GST registration of the company or business:
- The taxpayer who has requested the cancellation on the GST portal for any valid reasons;
- The tax officer;
- The legal heir of the taxpayer (if the taxpayer has attained death).
Procedure for cancellation of GST registration
So you want to know how to cancel GST registration in India. As described above, one can cancel GST registration in various cases in several ways. Here, we have described steps for GST cancellation for some popular reasons. Let’s start-
Case 1: When the annual turnover has gone less than Rs. 20 lakh/10 Lakh
If the annual turnover of your business goes below Rs. 20 lakh or Rs. 10 lakh (in North-Eastern or Hilly States), then you can surrender your GST. Well unlike before the turnover limit for non-North Eastern or hilly states the Exemption limit of 20 Lakh has been enhanced to 40 lakh with effect from 1st April. Being a taxpayer, you need to submit an e-application in Form GST REG-29 at the common portal. The authorized officer shall cancel the registration after conducting an inquiry. For the complete procedure, you need to follow the prescribed steps where we have focused on how to cancel GST registration online India:
Step1: Go to the official website of GST
Login to the GST portal and click the cancellation of provisional registration in the right side.
Step2: Fill up the form
The cancellation page will open. Your GSTIN and name of the business are already present there which will show automatically. You are supposed to provide a reason for cancellation. After that, you are required to answer if you have issued any tax invoices during the month.
At the end of the page, you need to fill up the details of authorized signatories and place. And finally, you need to sign off with EVC (Electronic Verification Code) with whether the business was a proprietorship or partnership firm.
In the case of LLP and companies, they must mandatorily sign with DSC.
To be noted
In case, the taxpayer has issued any tax invoice, then he needs to file Form GST REG-16. If the taxpayer hasn’t issued any tax invoice, then you can proceed with the above process.
Case 2: GST registration cancellation by the Tax Officer
The tax officer can cancel the registration if the taxpayer doesn’t conduct the business from the registered business location or he issues invoices or bills without a supply of goods or services or if he violates the anti-profiteering provisions.
- The tax officer will send a show-cause notice to the taxpayer in Form GST REG-17.
- The taxpayer is supposed to respond in Form REG-18 within 7days from the date of service of notice why his registration shouldn’t be cancelled.
- If his response is satisfactory, then the officer will stop the proceedings and pass an order in Form GST REG-20.
- If the registration needs to be cancelled, the officer will issue an order in Form GST REG-19. The order to the taxpayer will be sent within 30 days from the date of reply to the show cause.
Case 3: Cancellation by the taxpayer in other cases
If you think you can’t follow the above-described method, then you should file an application for cancellation in Form GST REG 16. The legal heirs of the deceased taxpayer need to follow the procedure as follows:
- File an application for cancellation in Form GST REG 16.
- While filing, you must include the details as mentioned below:
- Input details, details of semi-finished and finished goods held in stock on the date on which cancellation of registration is filed.
- Payment details.
- Liability thereon.
- The concerned officer will issue an order for cancellation in Form GST REG-19 within 30 days from the date of application. The cancellation will have an effect from the date determined by the officer. Plus, the officer will also inform or notify the taxable person.
From the above discussion, it’s obvious that if you anyhow go out of the GST eligibility frame, then you can surrender GST registration. Reasons for cancellation could be many some of which is if your annual turnover goes less than the threshold limit if you opt to close your business and more. We have already described the cancellation procedure above, you can refer the same.
If you want to cancel the GST registration of your company and isn’t able to figure out how to do that, then contact our experts at Swarit Advisors, who are well-versed in GST registration. They will help you out of the confusion with proper guidance. The team will help you with GST cancellation pending, providing GST registration cancellation format, and more.
Also, Read: What is Bill of Supply under GST?.