Registered in GST by mistake? Surrender your GST registration or face government notice.
This “How to cancel GST registration” is intendant for those who have a turnover less than 20 lacs and registered in GST. Now if you don’t want to file your GST then you must surrender of GST registration.
Let’s get started..
Who can cancel GST Registration?
The following persons are allowed to cancel a GST registration:
- The registered person himself
- A proper GST officer
- The legal heir of the registered person can request cancellation through an application, in case of death of the person
The voluntary registrations can apply for cancellation of registration even before the expiry of one year from the date of GST registration.
Conditions for cancellation of GST Registration
Cancellation by the registered person himself
A registered GST person can himself/herself cancel their registration in one of the following conditions:
- If your turnover is not more than 20 lakh and you have registered on the portal, but you do not want to file the return. Then, you should get it deactivated asap, otherwise, you may receive a tax notice from the government.
- If your business has been discontinued.
- The business has been sold or transferred to some other party. That other party needs to register under GST.
- If the person or business is no longer liable for GST registration. (As if the registration threshold is increased later by the government and you get out from its cover)
Cancellation by a GST officer
The GST registration of a person or business can be cancelled by a proper GST officer in one of the following cases:
- If the registered person has violated any of GST provisions or laws.
- A composition registered person has not filed tax returns for three consecutive quarters.
- A normal registered person who has not filed returns consecutively for six months.
- A voluntarily registered person who has not commenced any business in the six months from the registration date.
- If the registration is obtained by fraud methods, the proper officer has the right to cancel the registration with retrospective effect.
If the GST registration of a seller is cancelled with retrospective effect, it may result in denial of credits to the buyers who have purchased from such dealers.
The concerned person will receive a legal notice showing the cause of registration and will be given an opportunity to explain themselves before the actual cancellation.
Payment of Pending Tax after cancellation
The GST cancelled person will have to pay all the dues and liable taxes prior to cancellation.
The person will have to pay his due taxes either by reversing the input credit in the semi-furnished/furnished/raw stock of goods one day before the date of cancellation or by paying taxes on these goods. (whichever is higher of the two)
For capital goods, the person will have to pay either the input credit back which was taken on these capital goods, possibly reduced by a certain percentage or the tax applicable on the transaction value of goods. (whichever is higher)
How to Cancel GST Registration
If you want to cancel your GST enrollment, you have to submit an application on the GST Common Portal in FORM GST REG-16 with required details.
GST registration can be cancelled by using the forms below.
GST REG 16 – this form is to be used to apply for cancellation.
GST REG 17 – A proper officer can send the cancellation notice to a registered person using this form.
GST REG 18 – The concerned person must reply back in this form within 7 days of notice explaining why his/her registration should not be cancelled.
GST REG 19 – This form will be used by the proper officer to issue a formal order for cancellation of registration. The order is to be sent within 30 days from the application date or from the date of response in GST REG 18 form.
GST REG 20 – If the proper officer is satisfied with the explanation, he can use this form to drop the cancellation proceeding and pass a formal order.
Revocation of cancellation of GST registration
A registered person whose registration has been cancelled by a proper office on his own motion can apply for revocation of cancellation using form GST REG 21 within 30 days from the date of issuance of the order. It is not applicable to conditions where an application has been filed for cancellation. The revocation application is also not applicable if the person has not filed his due returns and paid tax.
If the officer chooses to revoke the cancellation, he can do so by passing a formal order in form GST REG 22 mentioning the reasons for revocation of cancellation in writing. This form must be filed within 30 days from the date of receipt of the application. The officer also has the right to reject the application for revocation. He can do so by passing an order in form GST REG 05 and sending the same to the applicant.
GST Cancellation Forms
GST REG–23 is to be used by the proper officer to issue a notice to the applicant asking why his/her application for revocation should not be rejected.
GST REG–24 can be used by the applicant to send a proper response within 7 working days from the date of issuance of the notice.
GST REG–29 form can be used by a person who is registered under VAT/ Service tax laws to request cancellation of his/her GST registration within 30 days from the GST implementation date.