Taxpayers already registered under GST can apply for the cancellation of GST registration. They can apply for cancellations if they need to close their business or any such situation arises. Let us read about who can and who cannot cancel a GST registration, the reasons for cancellation, how to cancel GST registration, etc.
Cancellation of GST Registration
Cancellation of GST registration is done when the taxpayer is not registered under GST anymore. The business will not be able to pay or collect GST after cancelling the GST registration.
Who Can Cancel GST Registration?
Registration granted to taxpayers under the GST can be cancelled for various reasons. The following entities can cancel or apply for cancellation:
- The GST department can cancel the registration if the taxpayer doesn't follow the GST rules and regulations.
- The taxpayers can apply for cancellation if:
- They don’t meet the requirements.
- They decide to close down the business.
- Legal heirs can apply for cancellation in case of the death of the taxpayer.
Note: If the cancellation is initiated by the department, they will issue a notice to the taxpayer to provide an opportunity to be heard and to clarify the situation. If the department is satisfied with the clarification, or if the issue has been resolved then the GST registration will not be cancelled. However, if the department is not satisfied with the response or the situation is not resolved, the GST registration will be cancelled.
Who Cannot File a Cancellation of GST Registration?
Following persons are not allowed to file for cancellation of GST registration:
1. UIN (Unique Identification Number) allotted persons paying tax.
2. Taxpayers who have registered as tax deductors or tax collectors.
Reasons for Cancellation of GST registration
The following factors can lead to the cancellation of the registration under GST:
- When there is no input tax credit in the return filed by the taxpayer, and Tax software doesn’t support GST return.
- If the user is not eligible to register under GST and if the GST return is not filed for a continuous period of 6 months.
- There is no GST invoice uploaded in the system.
- The tax calculation done by the taxpayer is not correct.
- A pending demand notice from an enforcement authority.
- A fraud complaint by a taxpayer.
- Non-filing of TDS reconciliation notice on the return filed by the taxpayer.
- A user has had a three-year interval of non-filing of returns. In this case, there will be no cancellation. If a taxpayer has a registration cancelled in 2013, there will be no cancellation again in 2018.
- A person acquiring GST registration through fraud, willful misstatements, or hiding of facts.
Also Read: GST Explained For Everyone
Early Cancellation of GST registration
- You can also apply for early cancellation of registration. You can request to cancel GST registration by providing the reasons for the same.
- It would cut the time taken for processing refund applications. The payee will get the amount of refund in electronic mode.
- You will get the refund after verification by the officials. The Central GST will charge a fee for service to enable these transactions.
How To Cancel GST Registration?
The cancellation can happen in 2 ways:
- First, when the cancellation is done by the taxpayer:
- To cancel a registration, you must submit a return called Final Return.
- If a person has registered for GST voluntarily, there are restrictions. The person cannot apply for it before the end of one year from the registration date.
- Second, when it is done by the authorities:
- The officer must issue a notice to the taxpayer before making any cancellation. The officer will specify the reasons for cancellation. The taxpayer must reply with enough reasons to prevent the cancellation.
- The taxpayer must reply within 7-days of receiving the notice.
- If the taxpayer doesn't reply within the time, the officer will cancel the GST registration.
If you're cancelling your GST registration, you should file a Final Return. You must file it within three months from the date of cancellation or date of issue of order, whichever is later in GSTR-10. Here the registered person excludes an ISD or a non-resident taxpayer.
Procedure for Cancellation of GST Registration
- You'll receive the refund of tax paid under CGST only after the cancellation. But, you will not receive the tax paid under SGST.
- You must submit an application containing reasons for the cancellation of registration. You must apply within the time limit.
- If the GST department does not accept the application, you can approach the Deputy Commissioner.
- You can go up to the Principal Commissioner if the lower officers do not accept your applications.
- The Union Finance Secretary will receive the application based on the details submitted.
- Once approved, you'll be able to get the refund of CGST paid.
Also Read: Key Advantages & Disadvantages of GST for businesses
What are The Steps for Cancellation of GST Registration?
The steps on how to surrender the GST registration are as follows:
- Visit the GST website and click on Login.
- Enter the username and password. Enter the captcha code and click on login.
- Click on Application for cancellation of registration. The link will be under the Services tab displayed on the home page.
- The site displays various types of cancellation registration forms. There are three tabs like basic details, cancellation, and verification details. Click on each tab and enter details.
- The Basic Details tab will show the complete details in the Basic Details section. The address of the main business location is also displayed.
- You have to fill in the address for any future communication. You can also look for the same as the above option to copy the same address.
- Now, click the "Save and Continue" button. A tick will appear on the basic details tab. This means you've completed the basic details. Proceed to the next tab.
- Only by completing the Basic Details tab, you can access the Cancellation Details tab.
- Now, select the reason in the cancellation list box. The following five reasons are available for choosing from the list box:
- Change in business constitution leading to change in PAN.
- Ceased to be liable to pay taxes.
- Discontinuance of business or closure of business.
- Transfer of business on account of amalgamation, merger, demerger, sale, lease, or otherwise.
- On completing the Cancellation Detail tab, you can access the Verification tab.
- Now, Click on the Checkbox to confirm the details given in the application are correct.
- Select the Name of the Authorised Signatory from the dropdown menu.
Note: The system fills in the Authorised Signatory details.
- Enter the place of making this declaration.
- Sign the form using the Digital Signature Certificate option. When you use this option, the registered user receives the OTP.
- Enter OTP and click the OTP confirmation button.
- Now, the system will generate an ARN and display a confirmation message.
- The GST Portal will also send a confirmation message to the registered phone number.
- The approved Tax Officer will review the application and decide.
Checking The Application Status
- To view the ARN, click on "Track Request Status" under the Services tab on the home page.
- Select the Submission Period radio button.
- Enter the From and To dates on the registration cancellation form.
- Click the search button. It will display the ARN and its status.
Consequences of Cancellation of GST Registration
- The person does not have to pay GST or collect GST
- The person will be no longer be required to file any GST return.
- If the business continues after cancellation, it is an offence. Penalties will apply to the person who continues the business after cancellation.
Revocation of Cancellation of GST Registration
Revocation means the formal cancellation of a promise or any decision. So the revocation of cancellation is a reversal of the cancellation. This means the registration under the GST is still valid.
The Time Limit for Revocation of Cancellation of GST Registration
Any registered taxable person can apply for revocation of cancellation of GST registration. The person must apply within 30 days from the date of receiving the order of cancellation.
Applicability of Revocation of Cancellation of GST Registration
- A reversal of the cancellation applies when a tax officer cancels the registration.
- A taxpayer must apply within 30 days of the order of cancellation issued on the GST portal.
- In some cases, the cancellation of registration is due to failure to submit the return. In that case, the person can lodge a claim only after submitting the return and any fees payable as tax. It also includes any interest, penalty.
COVID Relief for Revocation of Cancellation GST Registration
25th June 2020, Update: Taxpayers can file for revocation of cancellation of registration. But, this was only for those taxpayers whose registration stands cancelled up to the date 12th June 2020. The expiry of 30 days limit will be later of:
1. Date of service of the said cancellation order, or
2. 31st August 2020
The extension is a one-time measure due to the Covid-19 and lockdown situation. It was to ease those who wanted to continue their business. This relief will help businesses to resume their operations without much hassle.
1. Where can I apply for the cancellation of the GST registration?
Ans: One can get an application for GST registration from the GST Portal after logging in. The method says Services> Registration> Application for Cancellation of Registration.
2. How much time do taxpayers need to apply to cancel GST registration?
Ans. Some taxpayers go for voluntary cancellation. In this case, they need to apply for the cancellation of the GST registration. The application filing must be within 30 days from the date on which registration can be cancelled.
3. Can I file a Core field amendment file after applying for GST cancellation?
Ans: No. Once you have submitted the cancellation and received an ARN, you cannot file a Core field amendment file.
4. I have a temporary ID by Suo Moto. Can I file a cancellation for this registration?
Ans: No. You cannot apply for the cancellation of a Suo Moto registration. But, you can raise a complaint about Suo Moto registration.
5. Is it mandatory to provide reasons for the cancellation of registration?
Ans: Yes, it is compulsory to provide reasons for the cancellation of registration.