Cancellation of registration under GST

If the GST laws do not apply to you, you are closing down your business or profession, or the tax officer requests cancellation.  You may cancel your GST registration. This article will walk you through the various types of cancellations as well as the entire procedure.

Cancellation of GST registration by the tax officer

When a GST registration is cancelled, the taxpayer is no longer a registered person under GST and is no longer required to pay/collect GST, claim an input tax credit, or file reports. Section 29 of the CGST Act and Rules 20 to 22 of the CGST Rules apply to cancelled GST registrations. This article discusses the following topics:

Meaning of cancellation of GST registration

Cancellation of GST registration merely indicates that the taxpayer is no longer a GST registered individual. He will not be required to pay or collect GST or claim the input tax credit, and he will not be required to file GST returns.

Consequences of GST registration cancellation

• The taxpayer will no longer be required to pay GST.
• GST registration is required for certain businesses. If the GST registration is cancelled and the business continues, it will be considered an offence under GST, with severe penalties.

Cancellation of GSTIN for Migrated Taxpayers

Everyone who was previously registered under previous indirect tax regulations was required to migrate to GST. Many of these individuals may not have been required to register for GST. For example, the VAT threshold in most states was Rs.5 lakh, and the Service Tax level was Rs.10 lakh, whereas the GST threshold is Rs.20 lakh*. However, they had to ensure that you were not making interstate shipments because registration is required for all interstate suppliers except service providers.

*Rs.40 lakh in some states for a supply of solely products, or Rs.10 lakh in certain special category states/Union Territories. Such a taxpayer was required to submit an application to the GST portal in the form GST REG-29.

After conducting the necessary investigation, the proper officer shall cancel the registration.

GST registration cancellation notice via GST REG-17 form

A taxpayer and a proper officer can initiate the cancellation of a GST registration under GST. If a proper officer has grounds to cancel a registration, he can begin the cancellation process by issuing a show-cause notice in Form GST REG-17. If any of the following conditions exist, the appropriate officer may commence cancellation proceedings:

• If a taxpayer enrolled under the composition scheme has failed to file returns for three years in a row.
• A taxpayer, excluding composition taxpayers, fails to file returns for six consecutive periods.
• An assessed has registered for GST voluntarily but has not launched a business within six months of registration.
• The registered taxpayer has violated the GST Act or the Rules enacted thereunder.
• The GST registration was obtained through deception or deliberate misstatement.
• A taxpayer delivers goods or services without issuing an invoice or issues an invoice without supplying goods or services in order to dodge tax or improperly claim input tax credit.
• If a taxpayer fails to pay GST department tax, interest, or penalty within three months of the day such payment becomes due.
• The taxpayer’s business is closed.
• The only proprietor’s death.
• Changes in the taxpayer’s constitution result in a change in PAN.
• The individual in question is no longer needed to be registered under GST or to collect or pay tax.
• Business transfer as a result of a merger or combination