Who are Entitled to File GST Cancellation Application
The CGST Act entitles the following persons to apply for a cancellation of registration:
- All registered taxpayers other than persons regulated under rule 12, which covers registered persons requiring to deduct or collect tax at source, and Taxpayers granted with UIN.
- The legal heir of a registered person.
Who Can Cancel GST Registration?
- An Officer under GST can either on his own accord or
- an application filed by the registered person or
- by legal heirs of the registered person, in case of death of such person, can cancel a GST registration.
However, a person who obtained GST registration voluntarily cannot apply for GST Registration cancellation before the expiry of a 1 year from the effective date of registration.
The officer shall cancel the GST registration granted to a person for:
- The taxable person under GST does not conduct any business from the declared place of business; or
- Issues invoice or bill without supply of goods or services in violation of the GST Act and/or GST rules.
Prior to the cancellation of registration, the officer would issue a notice to such person whose GST registration is liable to be cancelled, requiring show cause within seven working days from the date of service of such notice as to why the GST registration should not be cancelled. The registered person can reply to the show cause notice within the prescribed time, or the GST registration can stand cancelled.
Also Read: Consequences if GST registration gets cancelled by the Government
Possible Reasons for GST Registration Cancellation
As per Section 29 of the CGST Act, the taxpayer can initiate apply for the cancelled GST registration under the following circumstances:
- Discontinuance or closure of a business.
- Transfer of business for reasons of amalgamation, merger, de-merger, sale, lease or other pertinent reasons.
- Change in the constitution of business, which results in a change of PAN.
- Taxpayers who are not under the mandatory net of GST.
- Death of the sole proprietor.
- Any other reason, the likes of which must be substantiated in the application.
Application Form for Cancellation of GST Registration
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 scenarios where it is tough 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.
Required Information Needed while filing for Cancellation of GST Registration
The following information must be mandatorily specified by the applicant while applying for cancellation in Form GST REG-16:
- Contact address, which includes the mobile number and e-mail address.
- Grounds of cancellation.
- The desired date of cancellation.
- Particulars of the value and the tax payable on the stock of inputs, the inputs available in semi-finished goods, inputs available in finished goods, the stock of capital goods/plant and machinery.
- Details of registration of the entity if the existing unit merged, amalgamated, or transferred.
- Particulars of the latest return filed by the taxpayer along with the ARN of the particular return.
Payment Requisites
While applying for a cancellation, the applicant is mandated to pay the input tax contained in the stock of inputs, semi-finished goods, finished goods, and capital goods or the output tax liability of such goods, whichever is higher.
The payment can be made through debiting either the electronic credit or cash ledger.
The obligation, though considered essential, may even be fulfilled during the submission of final return in GSTR-10.
Grounds of Non-acceptance of Application
The concerned officer may decide against accepting the application on the basis of the following:
- The submitted application is incomplete.
- Where in the event of transfer, merger or amalgamation of business, the new entity hasn’t registered with the tax authority prior to the submission of application.
In these situations, the concerned officer provides a written intimation to the applicant regarding the nature of the discrepancy. In which case, the latter is required to respond to the same within seven days of the date of receipt of the letter, failing which the concerned officer may reject the application after providing him/her with an opportunity to be heard. Reasons for the rejection must be recorded.
Final Return
Every person whose registration has been cancelled are required to file a final GST return in Form GSTR-10 within three months of the date of cancellation or the date of order of cancellation, whichever is later.
This is done to ensure that the taxpayer is devoid of liabilities which could have been incurred under Section 29 of the CGST Act.
The due date stipulated for the same is the 31st of December 2018. It may be noted that Input Service Distributors or non-resident taxpayers who are required to pay tax under section 10, section 51 or section 52 are exempted from this provision.
Final Return Not filed
If the final return isn’t filed in Form GSTR-10, the taxpayer will be issued a notice in GSTR-3A, prompting him/her to do the same within 15 days of the issue of such notice.
If the taxpayer fails to comply with the notice, initiatives will be taken to assess the liability of the taxpayer based on the information available with the concerned officer.
The assessing order will be withdrawn if the applicant files the return within 30 days of the issue of notice. However, the taxpayer wouldn’t be reprieved of remitting the late fee and interest.
How to Activate a Cancelled GST Registration?
Following information would be helpful to re-register your GST number after cancellation.
The taxpayer can apply for Revoking a Cancelled GST Registration application, if in the case that the GST officer cancelled involuntarily.
The applicant should file for the cancelled GST registration process in the GST portal within 30 days from the date of cancellation by the concerned officer.
However, upon cancellation of GST registration due to failure in filing GST returns, then the taxpayer can appeal for GST revocation only after filing the GST returns and pay the tax amount as required, along with any amount payable towards interest, penalty and late fee payable.
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 GST Officer would then verify the reasons for revocation of cancellation of registration, and if satisfied about the grounds for revocation of cancellation of registration, he would revoke the cancellation of registration.
