Procedure for cancellation of registration under GST

The proper officer may cancel GST registration. It can be done by him either on his own motion or on an application filed by the registered person or by his legal heirs (in case of death of such person).

Cancellation of GST Registration (or suspension w.e.f. 1-2-2019) [Section 29 of the CGST Act, 2017]:

The following persons are allowed to cancel GST (goods and services tax) registration:

(1) The registered person himself

(2) By a GST officer

(3) The legal heir of the registered person.

The above mentioned (cancellation of gst registration) section has been amended vide CGST (Central goods and services tax Amendment Act),2018 wherein the word after the word “CANCELLATION”, the words “OR SUSPENSION” shall be inserted.

However, the purpose to amend Section 29 of the Act so as to insert a provision for temporary suspension of registration while cancellation of registration is under process.

CANCELLATION OF REGISTRATION UNDER GST | GST REGISTRATION CANCELLATION | GST REGISTRATION CANCELLATION PROCESS | APPLICATION OF REGISTRATION OF GST REGISTRATION | PROCEDURE FOR CANCELLATION OF REGISTRATION UNDER GST

(1) CANCELLATION BY THE REGISTERED PERSON TAXPAYER SECTION 29(1)

Registered person under GST (goods and services tax) can himself / herself cancel their registration in any one of the following cases:

● Business has been discontinued.

● The business or trade and commerce has been sold or transferred to some other party. That other party needs to register under GST.

● There is any change in the constitution of the business or trade and commerce (like Partnership firm now converted into Private Limited company and so on).

● Turnover is not more than ₹ 20 lakh (₹ 10 lakh in the case of special category States except jammu and kashmir).

The following provision has been inserted namely, vide CGST (Central goods and services tax Amendment ) Act,2018:

Here, Given further through in period of being pending of the proceedings regarding abolishment or cancellation of registration filed by the registered person, the registration could also be suspended for such period (during the time) and in such method as may be prescribed.

CLARIFICATION ON ISSUE RELATING TO CANCELLATION OF REGISTRATION UNDER GST LAW

The written above mentioned issue has been clarified vide Circular No. 69/43/2018 –GST dated 26.10.2018:

The clarification on the same are as below:

1. The Circular clarified that in cases where it is difficult to exactly identify or pinpoint the day on which occurrence of the event warranting cancellation of registration occurs, 30-days deadline may be liberally interpreted and taxpayers application for cancellation of goods and services tax registration may not be rejected because of possible violation of deadline (crossing the time limit).

2. It has also directed the proper officers to accept all applications within 30 days (except where application is incomplete or in case of transfer, merger or amalgamation where new entity is unregistered) since cancellation of goods and services tax registration has no effect on liability of taxpayer for any acts of commission / omission given away before or after date of cancellation.

3. Person whose registration has been cancelled shall file a final return in Form GSTR-10, failing which notice in Form GSTR-3A has to be issued and in case the failure continues, assessment order in Form GST ASMT-13 (GST Act) under section 62 shall be issued to determine liability of assessee / taxpayer.

As per the Finance Act, 2018 (w.e.f. 01-02-2019), the following provision shall be inserted under section 29(1), namely:—

Here, Given further through in time of being of the proceedings regarding abolishment or cancellation of registration filed by the registered person, the registration may be suspended for such period and in such method as may be prescribed.

(2) CANCELLATION BY A GST OFFICER SECTION 29(2)

Goods and services tax registration of a person or business or trade and commerce can be cancelled by a proper GST officer in one of the following cases:

● If the registered person has violated any of goods and services tax provisions or laws.

● A composition registered person or composite method registered person has not filed tax returns for three consecutive quarters.

● A normal registered person or regular registered person who has not filed returns consecutively for six months.

● A voluntarily or willingly registered person who has not commenced any business in the six months from the registration date.

● If the goods and services tax registration is obtained by fraud methods, the proper officer (PO) has the right to cancel the GST registration with retrospective effect.

Provided that the proper officer (PO) shall not cancel the goods and services tax registration without giving the person an advantage of being heard.

The following provision of the Section 22(1) of CGST (central goods and services tax) Act has been inserted, vide CGST (Amendment ) Act,2018:

Here, Given further through in time of being of the proceedings regarding abolishment or cancellation of registration, the proper officer (PO) may suspend or disband the registration for such period andin such way as might be endorsed;

Note: The above paragraph inserted vide the CGST (Central Goods and Services Tax, Amendment) Act, 2018 :

Central goods and services tax amendment act 2018, in rule 22, in sub-rule (4), the following provision shall be inserted, namely:-

Here, Given that where the person as opposed to answering to the notification approved under sub-rule (1) for contravention of the provisions contained in clause (b) or clause (c) of sub-section (2) of section 29, furnishes all the pending goods and services tax returns and makes full payment of the tax (goods and services tax) dues along with applicable interest and late fee, fine, the proper officer (PO) shall drop the proceedings and pass an order in FORM GST-REG 20.

For section 29(3) of the  CGST (Central Goods and Services Tax) Act, 2017, the abolishment or cancellation of gst registration under this section shall not affect the liability of the taxpayer to pay tax and other dues under this Act or to discharge any obligations under this Act or the rules made thereunder for any period prior to the date of gst registration abolishment or cancellation whether or not such tax (gst( and other dues are determined before or after the date of abolishment or cancellation of registration.

Under the Section 29(4) of the Central Goods and Services Tax (CGST) Act, 2017, the cancellation or abolishment of gst registration under the State Goods and Services Tax (SGST) Act or the Union Territory Goods and Services Tax (UTGST) Act, as the case could also be , shall be deemed to be a cancellation of registration under this Act.

Section 29 (5) Every GST registered person whose GST registration is cancelled shall pay an amount, by way of debit within the electronic credit ledger (ECL) or electronic cash ledger (CCL), similar to the credit of input tax (ITC) in respect of inputs held in stock and inputs contained in finished or semi-finished goods held in stock or plant and machinery (P&M) or capital goods on the day immediately preceding the date of such abolishment / cancellation or the output tax payable on such goods, whichever is higher, calculated in such manner as could also be prescribed:

Provided that in case of capital goods or plant and machinery, the taxable person shall pay an amount adequate to the input tax credit taken on the said capital goods or plant and machinery, reduced by such percentage points as could also be prescribed or the tax on the transaction value of such capital goods or plant and machinery under section 15, whichever is higher.

(3) THE LEGAL HEIR OF THE REGISTERED PERSON

The legal heir of the GST registered person can request cancellation through an application, just in case of death of the person.

(4) REGISTRATION TO BE CANCELLED UNDER RULE 21 IN A FEW CASES

The registration granted to a person is liable to be cancelled Rule 21 of GST Act, if--

• The registered person doesn't conduct any business from the declared place of business.

• The gst registered person issues invoice or bill without supply of goods or services in violation or infraction of the provision of the Act.

• The registered person violates the provisions pertaining to Anti-profiteering measure of section 171.

(5) CANCELLATION DOES NOT DISCHARGE LIABILITY OF TAXPAYER

The abolishment or cancellation of registration shall not affect the liability of the taxpayer to pay tax and other dues under gst or to discharge any obligation under gst enactment or regulations for any period before the date of abolishment or cancellation (whether or not such tax (gst) and other dues are determined before or after the date of cancellation).

(6) CONCURRENT CANCELLATION OF UNDER ALL GST ACTS

The cancellation of registration under SGST Act / UTGST Act shall be deemed to be a cancellation of registration form under CGST Act.

(7) PAYMENT DUES

Every registered person whose registration is cancelled shall pay an amount pertaining to reversal of input tax credit which he has already claimed in respect of inputs held in stock and inputs taken in finished or semi-finished goods held in stock or plant and machinery (P&M) or capital goods on the day immediately preceding the date of such cancellation or abolishment of goods and services tax.

(8) PROCEDURE FOR CANCELLATION OF REGISTRATION UNDER GST

Goods and services tax registration can be cancelled by using the forms below--

• Application for cancellation: Relevant Form GST REG 16.

Note: The voluntary registrations can only be cancelled after 1 year (one year) or more from the date of Goods and services tax registration.

• A proper officer can send the show cause / cancellation notice to a registered person: Relevant Form GST REG 17.

• The worried person must reply back during this manner within 7 days of notice explaining why his / her registration shouldn't be cancelled: Relevant Form GST REG 18 under the gst act.

• This form are going to be used by the proper officer (PO) to issue a formal order for abolishment or cancellation of registration. The order is to be sent within 30 days from the application date or from the date of response in GST REG 18 form: Relevant Form GST REG 19.

• If the proper officer is satisfied with the explanation, he can use this form to drop the cancellation proceeding and pass a formal order: Relevant Form GST REG 20.

Procedure for Cancellation or abolishment of Registration under GST: 

GST registration can be cancelled by using the forms below: