Complete Guide to GST Registration Cancellation in India

The Goods and Services Tax, which was implemented recently, on July 1st, 2017, with a lot of promises and a work in progress tagline, is known for combining all indirect taxes into one.

All business units with a yearly turnover of fewer than 20 lakhs are exempt from paying GST, and all business units with a turnover greater than this exemption limit must register with the GST.

But what if you want to cancel your GST registration? How can you do it? Are you even eligible for it?

To understand this we must first learn about the cancellation process, eligibility, the forms required for the cancellation process, and more.

In the following sections, we will learn all these details along with the step-by-step process to cancel the GST registration.

What does the term "Cancellation of GST Registration" mean?

Cancellation of GST registration simply means that the taxpayer is no longer a GST registered individual.

He/she will not be required to pay or collect GST, nor will he/she be able to claim the input tax credit. This implies that he/she will also be unable to file GST returns.

The conditions under which a GST registration can be canceled

Who is eligible to cancel the GST registration?

Businesses can cancel their registration using the recently added feature on the GSTN portal. However, the cancellation feature is limited to only three entities:

Taxpayers who have already registered under the GST Act may cancel their registration at any time. The cancellation could be for various reasons, such as:

In some cases, such as the death of the taxpayer, the cancellation of the registration can be initiated by the legitimate heir. While registration can be done voluntarily, it can only be done after a specified time has passed since the date of GST registration.

What happens after the cancellation of GST registration?

Following are the consequences of a GSTIN cancellation:

Forms required for cancellation under GST regulations

The taxpayer must file a cancellation application in FORM GST REG 16. The legal heirs of the deceased taxpayer will proceed in the same manner as described below:

    1. Form GST REG 16
      • Form GST REG 16 must be used to file a cancellation request.
      • Form GST REG 16 must include -
        • the details of inputs, semi-finished goods, and finished goods held in stock on the date of cancellation of registration.
        • Liability in this regard
        • Payment information
    2. Form GST REG 17
      • Using the REG 17 form, an authorized GST officer can provide notice of show cause/cancellation to the registered taxpayer and its business entity.
      • The authorized officer can cancel the registration after issuing the GST REG 17 form to the taxpayer, and he can ask for show cause as to why the registration should not be canceled.
    3. Form GST REG 18
      • The show-cause notice can be responded to using the provided GST REG 18 form within the time specified.
      • The taxpayer or the concerned party must respond to the notice within 7 days of its issuance, explaining why the registration should not be canceled.
    4. Form GST REG 19
      • Within 30 days of the date of application, the proper officer must issue a cancellation order in form GST REG-19.
      • The cancellation will take effect on a date determined by the officer, and the taxable person will be notified.
    5. Form GST REG 20

If the GST officer is unsatisfied with the show cause notice, he may direct the revocation of any proceedings toward the cancellation of the registration, and he must issue an order in Form GST REG 20.

    1. Form GST REG 21

This form is used by the taxpayer to apply for the revocation of GSTIN cancellation.

    1. Form GST REG 22

Form GST REG 22 is used by the authorized officer to issue an order for the revocation of the cancellation.

GST registration cancellation for migrated taxpayers

This service is available to all taxpayers who have not issued an invoice since their registration. It’s important to note that if the individual has filled out any tax invoices, he can fill out form GST REG 16.

After conducting the necessary investigation, the proper officer shall cancel the registration.

The procedure for cancellation of GST registration online on the GST portal
Follow the steps listed below for GSTIN cancellation:

GST registration cancellation by the tax officer

The authorized tax officer can order for the cancellation if the taxpayer:

*These recent regulations have been put in effect since January 1st, 2021.

Procedure

Revocation of cancellation of GST registration

The official cancellation of a decision or promise is referred to as revocation. In this case, a revocation means the registration cancellation process has been reversed and the registration is still valid.

This is only applicable when a tax officer cancels a taxable person's registration on his initiative. Within thirty days of the date of the cancellation order, the taxable person may apply to the officer for revocation of the cancellation.

Procedure

It's important to note here that if the registration has been canceled due to failure to file returns, an application for revocation cannot be filed. Such returns must be filed first, along with payment of all tax, interest, and penalty amounts owed.

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