The registration granted under GST can be cancelled for specified reasons. The cancellation can either be initiated by the department on their own motion or the registered person can apply for cancellation of their registration. In case of death of registered person, the legal heirs can apply for cancellation. In case the registration has been cancelled by the department there is a provision for revocation of the cancellation. On cancellation of the registration the person has to file a return which is called the final return.
Persons applying for cancellation of GST Registration
Following persons can apply for cancellation of GST registration –
- Registered taxpayer;
- An officer on his own accord;
- Legal heirs, in case of death of the taxpayer.
Reasons for cancellation
- The business has been discontinued, transferred fully for any reason including death of the proprietor, amalgamated with other legal entity, demerged or otherwise disposed of;
- Change in the constitution of the business resulting in change in PAN;
- If Registration under GST taken inadvertently, he/she can choose to cancel the registration;
- In the case were the taxable person is no longer liable to be registered under the Goods and Service Tax Act.
- When a taxable person ceases to be liable to pay tax.
- A person paying tax under Composition levy has not furnished returns for three consecutive tax periods;
- Any registered person, other than a person paying tax under Composition levy has not furnished returns for a continuous period of six months;
- Any person who has taken voluntary registration under subsection (3) of section 25 has not commenced business within six months from the date of registration;
Procedure for Voluntary Cancellation of Registration by the Taxpayer
An application for cancellation is to be made in Form GST REG-16 on the common GST portal within 30 days of the occurrence of the event warranting the cancellation. In certain cases where it is difficult to identify the exact date of the event, the deadline can be interpreted in a liberal manner, in which case the application would not be rejected on the possible violation of the deadline.
Procedure for Cancellation of Registration by the Tax Officer
 The tax officer is required to raise a show cause notice in Form GST REG-17;
 The taxpayer, on receipt of the notice from the tax officer, is required to file a suitable reply in Form GST REG-18 within a period of 7 days from the date of receipt of the show cause notice;
 If the tax officer is satisfied with the reply provided by the taxpayer, he would cancel the proceedings and issue an order in Form GST REG-20;
 If the tax officer is not satisfied with the reply provided by the taxpayer, he will issue an order in Form GST REG-19.
 The tax officer is required to issue an order, either in Form GST REG-20 or GST REG-19, within a period of 30 days from the date of reply by the taxpayer.
Final Return and its Due Date
GSTR-10 is a final return that a registered person whose GST Registration gets cancelled needs to file. Such a registered person does not include:
- Input Service Distributor
- Person paying tax under composition scheme
- Non-resident taxable person
- Person collecting TDS or TCS
The person has to file a final return within three months of the date of cancellation or date of order of cancellation, whichever is later, electronically in FORM GSTR-10 through the common portal either directly or through a Facilitation Centre notified by the Commissioner. The intent of filing this final return is to make sure that the taxpayer pays off any liability outstanding. This liability may include an amount equivalent to the amount that is higher of:
- input tax related to stock of finished and semi-finished goods, capital goods or plant and machinery or
- output tax payable on such goods.
Result of non-filing of Final Return
A notice is issued to the taxpayer in Form GSTR-3A. This is done in case person seeking cancellation of GST Registration does not file the final return in Form GSTR-10 within the prescribed time period.
Further, an assessment order is passed in case such a taxpayer fails to file the return even within 15 days of receipt of such a notice. This assessment order is issued to ascertain the liability of the taxpayer that mentions the tax payable along with interest to be paid by the taxpayer.
Revocation of Cancellation
When the registration has been cancelled by the Tax Officer and not voluntarily ,then the registered person, whose registration has been cancelled, can submit an application for revocation of cancellation of registration, in FORM GST REG-21, to the Tax Officer, within a period of 30 days from the date of the service of the order of cancellation of registration at the common portal, either directly or through a Facilitation Centre notified by the Commissioner.
However, if the registration has been cancelled for failure to furnish returns, application for revocation shall be filed, only after such returns are furnished and any amount due as tax, in terms of such returns, has been paid along with any amount payable towards interest, penalty and late fee in respect of the said returns.
After filing the delayed GST returns and paying the penalty, an application can be made by a taxpayer for revocation of cancellation of registration. The Tax Officer would then verify the reasons for revocation of cancellation of registration, and if satisfied with the grounds for revocation of cancellation of registration, he would revoke the cancellation of registration.
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This information is in summary form and is therefore intended for general guidance only. It is not intended to be a substitute for detailed research or the exercise of professional judgment. Mind Sync does not accept any responsibility for loss occasioned to any person acting or refraining from action as a result of any information provided herein. On any specific matter, reference should be made to the appropriate advisor.