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Tanya Verma
| Updated: 08 Dec, 2019 | Category: Goods and Service Tax, Taxation

Cancellation of GST Registration in India: Full guide

GST Registration

GST Registration is needed to be obtained by business owners who have a turnover more than Rs. 40 lakhs which was initially Rs. 20 lakhs. However, people saw a scope of loss at the initial stages of the introduction of the GST laws. The reason behind this was, earlier, in the pre GST laws, businesses having a turnover of Rs. 5 lakhs needed to obtain registration, so they opted to cancel their GST Registration. Also, there are other reasons for the cancellation of the registration under GST which are mentioned in this article.

All about Cancellation of GST Registration

What do you mean by the cancellation of GST Registration? The answer is, suppose in case you wish to stop your business and go abroad or something, or amalgamate, or discontinue your current business in any way, you will need to cancel your current GST Registration. Furthermore, you will need GST Registration or not, depends on the situation or is different in a different case.

So basically, GST Cancellation means that after cancellation, you will not be a GST Registered person or entity anymore.

Reason for the Cancellation of GST Registration

There can be various reasons for the cancellation of your GST Registration. Some of them are as follows;

  • In case the business has been discontinued
  • If the business has been transferred fully, demerged, amalgamated, or otherwise disposed of
  • Also, in the case, if there is a change in the constitution of the business (For example- in case the company is converted from a Private limited company to a public limited company)

Who can cancel GST Registration?

Registration can be cancelled by the following person or group of people;

  • GST Registered person themselves
  • The tax officers
  • Legal heirs of the GST Registered person in case of his/ her death

Furthermore, the process for the cancellation of GST Registration is different if it is requested by the taxpayers themselves;

  • If the turnover is less than 20 lakhs
  • Other cases
GST Registration in India

Procedure for GST Cancellation Online

The process of cancellation of the GST Registration differs from one case to another.

The process of cancellation of GST Registration is given below:

In case the turnover of the business is less than Rs. 20 lakhs;

This provision was valid at the time of migration of taxpayers who were registered under the older tax regime to GST; therefore, this process is no longer used now. However, for the sake of knowledge, here I am going to provide you with all the details of this process. When GST was first introduced, all taxpayers were dictated to migrate to GST mandatorily. However, many taxpayers were unwilling as the limit or threshold under VAT in most of the states of India was set to Rs. 5 Lakhs whereas it was Rs. 20 Lakhs under GST.

Therefore, such taxpayers were told to make an online application in Form GST REG- 29 at the GST portal[1]. Then the designated officer was required to conduct an enquiry and cancel the registration.

Procedure in other cases

People other than the above-mentioned category of people need to file an application in Form GST REG- 16. Also, the legal heirs of the deceased taxpayers need to follow the same procedure to cancel the registration under GST.  

Furthermore, the following details must be included in the Form GST REG 16-

  • Details of inputs, semi-finished, finished goods held in stock on the date on which cancellation of registration is applied
  • Liability thereon
  • Details of the payment

The proper officer has to issue an order for cancellation in FORM GST REG-19 within 30 days from the date of application. The cancellation needs to be effectual from a date determined by the officer, and he will have to notify the taxable person.

Read our article:How Offences & Penalties Under GST Can Put In Trouble?

Why does the tax officer cancel GST Registration?

This does not happen often, but your negligence regarding payment of taxes can lead to this situation. Furthermore, the registration can be cancelled, if the taxpayer performs the following activities;

Procedure to re-apply for GST Registration in this case

The procedure to apply for reapplying for the Registration is as follows;

  • In case the proper officer has reasons to cancel the registration of a person then he will send a show-cause notice to such person in FORM GST REG-17.
  • The registered person must reply in FORM GST REG–18 within 7 days from date of the receipt of notice stating the reasons why his registration should not be cancelled.
  • If the tax officer finds the reply to be satisfactory, the tax officer will drop the proceedings and pass an order in the FORM GST REG –20.
  • Furthermore, if the registration is liable to be cancelled, the proper officer will issue an order in FORM GST REG-19.  Such an order will be sent within 30 days from the date of reply to the show cause.

How to Revoke Cancellation of GST Registration

Before knowing the procedure of revoking the cancellation of GST registration, you first need to know what revocation of cancellation is.

What is revocation of cancellation of GST Registration?

Revocation of cancellation means the process of taking back the decision of cancelling GST Registration, and it means that the registration is still valid. In other words, revocation refers to the official cancellation of a decision or promise.

Applicability of revocation

You can only apply for revocation of cancellation of Goods and Service Tax in case the registration has been cancelled by the Tax Officer. Such a person can apply for revocation within thirty days from the date of order of such cancellation.

The procedure to apply for revocation is as follows;

  • The registered person, whose registration is cancelled by the tax officer can submit the application for revocation of cancellation, in GST REG-21 FORM, if his registration has been cancelled suo moto by the designated officer.
  • Such taxpayer must submit the application within 30 days from the date of service of the cancellation order at the Common Portal.
  • If the tax officer is satisfied, he can revoke the cancellation of registration by passing an order in the Form GST REG-22 within 30 days from the date of receipt of such application. Furthermore, the reasons for the revocation of cancellation of registration must be provided in writing.
  • The tax officer can reject the application for revocation by an order in FORM GST REG-05 and communicate the same to the applicant.
  • Furthermore, before rejecting, the designated officer must issue a show-cause notice in FORM GST REG–23 for the applicant to prove why the registration should not be rejected. Furthermore, the applicant must reply in FORM GST REG-24 within 7 working days from the date of the service of notice.
  • Such officer will make a decision within 30 days from the date of receipt of clarification from the applicant in FORM GST REG-24.

Conclusion

Goods and Service Tax Registration is mandatory for business owners having turnover more than Rs. 40 lakhs per annum. However, people having turnover less than that does not need to obtain registration under GST.

On the other hand, people can cancel their registration under GST if they wish or in case their business is going to be discontinues due to any reason. It can be done in three ways, namely, by the taxpayer, by the tax officer and by the legal heir of the deceased taxpayer. Furthermore, in case the registration is cancelled by the tax officer, the tax payer can apply for revoking the cancellation as prescribed by relevant laws.

Read our article:GST Returns: Applicability, Due Date and Penalties

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Tanya Verma

Tanya is working as writer & editor from past 2 years with experience in covering startup and technology related topics.

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