What is the Procedure for Cancellation of GST Registration?

Cancellation of GST Registration Online Process

GST registration once obtained, can be cancelled or surrendered in the future. There can be many reasons such as GST is not applicable anymore on such entity, the taxpayer is shutting down the business, or it can be any other valid reason for the same. This blog will guide you to understand the process of GST surrender.

Consequences of post-cancellation of GST

Following are the implications of cancelling the GST registration:

• The entity will be no more eligible to collect the GST, nor he is required to pay the same to Government
• There is no requirement to comply annually/monthly/quarterly by filing the return
• Cancellation of GST registration means surrendering the GSTIN, and the taxpayer will not be shown on the registered entity on the GST database.

Apply for GST Registration Online Process

Reasons for cancellation of Registration

GST Registration can be cancelled due to the following reasons such as:

• A taxpayer can apply for GST surrender in case his annual turnover falls below the compulsory threshold limit of INR 40 Lakhs
• Taxpayer wishes to cancel his registration due to the reason he shut down the business
• If the constitution of the company is completely changed, for example, Private Ltd converted to Public Ltd.
• If the business is transferred in the form of amalgamation, demerger, or otherwise disposed of off.
• Sometimes GST is cancelled by GST tax authorities in case the taxpayer is not conducting his business from a declared business place or violates any provisions or guidelines of GST Act.

Steps of GST Surrender

GST cancellation procedure varies as per the reason of GST surrender that is explained herein below:

a) Turnover falls below threshold limit:

• Login to GST portal and select the tool of cancellation of provisional registration from the Dashboard
• Give the reason for GST surrender and proceed further by furnishing all the required information
• In case the taxpayer has issued any tax invoice needs to file Form GST REG-16 online for GST cancellation

b) Other reasons:

• Application for cancellation must be made in Form GST REG-16
• Details such as inputs, raw material, and finished goods including liability thereupon
• Within 30 days of receipt of cancellation application, the proper officer shall issue an order in Form GST REG- 19 with the date with effect from which cancellation prevails.

c) Cancellation by tax authority:

• Proper office if deems fit and proper to cancel GST of the taxpayer, shall send a show-cause notice to such person in Form GST REG-17
• Within 7 days of serving of notice, the taxpayer shall reply in Form GST REG- 18 to show cause the reason why his GST shall not be cancelled
• If the proper officer is satisfied with the respond of the taxpayer, shall pass an order in Form GST REG- 20 to drop the further proceedings.

Final Thought

The decision to cancel the GST registration can also be revoked. Revocation of cancellation implies decision of cancellation of GST registration online has been reversed and GSTIN stands valid. To get the complete help relating to GST registration, surrender, revocation or GST compliances, contact us.