GSTN Cancellation or Surrender - Meaning

Cancellation of GST registration simply means that the taxpayers will not be a GST registered person any more. He is not required to pay or collect GST further.

Consequences of Cancellation or Surrender

The taxpayers will cease to be Registered person under GSTN.

For certain businesses, registration under GST is mandatory. If the GST registration is cancelled and business is still continued, it will constitute an offence under GST and therefore heavy penalties will be levied.

Cases when GSTN can be Cancelled

  • Turnover is less than 20 lakhs
  • 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)

Cancellation Process 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 due to threshold limit.
  • 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.

Cancellation Process In Other Cases

  • For cancellation, the taxpayer will have to submit an E-application in FORM GST REG-29 through the GST Portal. An authorised officer, upon proper enquiry, shall provide cancellation of the registration.
  • If in case, a registered person is deceased or expired, the family or the legal heir of the taxpayer can apply for cancellation of GST registration in FORM GST REG 16.
  • Application for cancellation has to be made in FORM GST REG 16 by Legal Heirs along with Details of inputs, semi-finished goods held in stock on the date on which cancellation of registration is applied, Liability thereon and Details of payment.

GSTN Cancellation By Tax Officer

Why will the officer cancel registration?

The registration can be cancelled, if the taxpayer-

  • Does not conduct any business from the declared place of business OR
  • Issues invoice or bill without supply of goods/services ( i.e., in violation of the provisions) OR
  • Violates the anti-profiteering provisions (for example, not passing on benefit of ITC to customers)

Procedures

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 persons 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.

Revocation Of Cancellation Of Registration

What is revocation of cancellation?
Revocation of cancellation of registration means that the decision to cancel the registration has been reversed and the registration is still valid.

When is revocation of cancellation applicable?
This is applicable only when the tax officer has cancelled the registration of a taxable person on his own motion. Such taxable person can apply to the officer for revocation of cancellation within thirty days from the date of the cancellation order.

Procedures To Revoke GST Cancellation

Step 1.

A registered person can submit an application for revocation of cancellation, in FORM GST REG-21, if his registration has been cancelled suo moto by the proper officer.

Step 2.

To be submitted within 30 days from the date of service of the cancellation order at the Common Portal.

Step 3.

If the proper officer is satisfied he can revoke the cancellation of registration by an order in FORM GST REG-22 within 30 days from the date of receipt of the application. Reasons for revocation of cancellation of registration must be recorded in writing.

Step 4.

The proper officer can reject the application for revocation by an order in FORM GST REG-05 and communicate the same to the applicant.

Step 5.

Before rejecting, the proper officer must issue a show notice in FORM GST REG-23 for the applicant to show why the application should not be rejected. The applicant must reply in FORM GST REG-24 within 7 working days form the date of the service of notice.

Step 6.

The proper officer will take decision within 30 days from the date of receipt of clarification from the applicant in FORM GST REG-24.

NOTE: Application for revocation cannot be filed if the registration has been cancelled because of the failure to file returns. Such returns must be furnished first along with payment of all dues amounts of tax, interest and penalty.

Pricing

Normal

Starting at Rs. 1,299 /- Onwards
  • GST registration cancellation service. Applicable for entities with no activities.

Standard

Starting at Rs. 1,999 /- Onwards
  • GST registration cancellation service and filing of last GST Return.

Executive

Starting at Rs. 4,999 /- Onwards
  • GST registration cancellation service, filing of last GST return and responding to any notice.

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Frequently Asked Questions

How will I know if my GST registration is likely to be cancelled?

If your GST registration is likely to be cancelled by order, the GST authority will send you a show cause notice to which you will have to give a suitable reply within 7 days.

What are the types of cancellation of Registration?

While a taxpayer can opt to cancel registration himself, a Proper Officer can is also authorised to do so. The provisions related to this are covered in section 29(1) of CGST Act 2017.

  • Cancellation of GST registration by a registered person (or his legal heirs)
  • Cancellation of GST registration by the Proper Officer

What is Suo Moto cancellation in GST?

Suo Moto Cancellation of GST Registration means cancellation of registration by GST Officer on its own. There must be a valid reason for initiation of proceeding for Suo moto cancellation as specified under Section 29(2) of the CGST/SGST Act.

What is revocation of cancellation of GST Registration?

The GST Act is very comprehensive and covers various situations a taxpayer may face with provision and procedures. In this article, we look at the procedure for revocation of GST registration cancellation order along with the applicable forms. The provision for revocation are contained under rule 23 of the CGST Rules, 2017.

Revocation of GST registration can be initiated if a GST registration certificate has been cancelled by GST authorities.

How long does to take to proper officer to cancel GST Registration?

If the proper officer is satisfied he can revoke the cancellation of registration by an order in FORM GST REG-22 within 30 days from the date of receipt of the application.