Cancellation of GST Registration refers to the process by which a taxpayer ceases to be obligated to pay or collect Goods and Services Tax (GST), claim input tax credit (ITC), or file GST returns. The provisions for GST registration cancellation are covered under section 29 of the Central Goods and Services Tax (CGST) Act.
Voluntary cancellation of GST registration can be initiated by a person or entity registered under GST by submitting a cancellation request on Form GST REG-16 to the GST Department. This form serves as an application for cancellation of registration. The taxpayer needs to provide relevant information such as the reason for cancellation, the effective date of cancellation, and details of the authorized signatory.
There are various reasons that may lead to the cancellation of GST registration:
- These include the discontinuation or closure of business activities,
- Transfer of business through amalgamation, merger, de-merger, lease, or other reasons,
- Change in the constitution of the business resulting in a change of Permanent Account Number (PAN), turnover falling below the threshold limit prescribed by the GST department, or
- the unfortunate event of the proprietor’s death.
Process for cancellation of GST registration:
- Log in to the GST portal by using the registered user ID and password.
- Access the “Service” menu, click on the “Service” tab, and select “Registration” from the drop-down menu.
- Select the option “Application for cancellation of GST registration.”
- Fill out the form GST REG-16, providing details such as the reason for cancellation, the effective date of cancellation, and information about the authorized signatory.
- Submit the application along with the required documents.
- Follow up on the application status: The GST officer will review the application and may request additional documents or information if needed. It is important to respond promptly to any such requests to avoid delays.
- Receive the cancellation order: If the application and supporting documents are approved, a cancellation order for the GST registration will be issued within 30 days from the application date.
Once the cancellation of GST registration application is submitted, the GST Officer will review the application and supporting documents. The officer may request additional documents or information if necessary. It is crucial for the applicant to respond immediately to any such requests to avoid any delays in processing the application.
After reviewing the complete application for cancellation of GST, if the GST Officer is satisfied with the information provided in the application, they will issue an order in the form of GST REG-19 to terminate the GST registration. This order will specify the effective date of cancellation, and from that date onwards, the taxpayer will no longer be liable to pay or collect GST, claim input tax credit, or file GST returns.
Once the cancellation of GST registration order is issued, the GST registration will be deemed cancelled from the effective date mentioned in the order. It is important to note that cancellation of GST registration does not absolve the taxpayer from any liabilities or obligations that may have arisen before the cancellation. The taxpayer must fulfill any pending compliance requirements, including filing any outstanding GST returns and paying any dues or penalties, if applicable.
Additionally, it is advisable for the taxpayer to update their business records and communicate the cancellation of GST registration to their suppliers, customers, and other relevant parties to ensure a smooth transition. This will help avoid any confusion or complications regarding the taxpayer’s GST status.
In the event that the taxpayer intends to restart their business activities in the future, they will need to undergo the GST registration process again. It is important to consider this aspect and plan accordingly.
Conclusion:
To summarize, the cancellation of GST registration relieves a taxpayer from their GST obligations, including the payment and collection of GST, claiming input tax credit, and filing GST returns. The process involves submitting a cancellation request, providing necessary information, and complying with any additional requirements from the GST Officer. Once the cancellation order is issued, the taxpayer’s GST registration is deemed cancelled, and they must fulfill any pending compliance requirements.
