GST REGISTRATION CANCELLATION 2022
DEFINITION
A GST registration in india that has been taken by an individual can be cancelled by the registered individual or by a GST Officer or by the legal heirs of the registered individual in the case of death of this said registered individual under GST. A GST registration which is cancelled is different from the GST registration amendment.
ENTITIES WHO CAN CANCEL A GST REGISTRATION
The GST registration 2022 can be cancelled by a GST officer or by an individual who has registered under GST. The GST registration which has been given to an individual can be cancelled by a GST officer under the following conditions
1)The individual registered under GST has not conducted any kind of business from the registered place of business.
2)The registered individual has issued an invoice or bill without the actual supply of goods or services. This action is a violation of the GST Act and rules.
3)A person registered under GST hasn’t filed GST returns for six months at a stretch.
GST REGISTRATION CANCELLATION BY GST OFFICER
Before the GST registration is cancelled, a GST Officer issues a notice to the registered individual whose GST registration is about to be cancelled. Once such a GST cancellation notice is received the registered individual has a period of 7 days to reply to the show cause notice. Failure to reply to such a show cause notice within the prescribed time limit of 7 days can result in the cancellation of the GST registration for the registered individual .
VOLUNTARY GST CANCELLATION BY A REGISTERED PERSON
Under Section 29 of the CGST Act, a GST registration cancellation can be initiated by a registered individual under the following conditions:
1) If the registered individual’s business is being discontinued or has shut down.
2) If the registered individual under GST has transferred the business, merged the business, de-merged the business, amalgamated the business, leased the business or for any other such reasons.
3) There is a change in the core constitution of the business, due to which there has been a change in the PAN registration of the registered entity.
4) The turnover of the business has fallen below the threshold limit needed for GST registration.
5) The sole proprietor of the business registered under GST has died.
6)It could be also be any other reason which will then have to be proved in the GST cancellation application.
CONDITIONS TO FULFIL BEFORE GST CANCELLATION
A registered GST taxpayer must ensure that all his/her GST returns have been filed and are up to date before he/she applies for GST cancellation In case there is non-compliance with respect to GSTR-3B return or GSTR-1 return or GST annual return, the overdue returns must be filed before initiating the GST cancellation process.
APPLICATION FOR GST CANCELLATION
An application for GST cancellation is to be filed in Form GST REG-16 on the online GST portal. While filing for the GST cancellation application, the registered person must provide the information mentioned below:
1) The registered contact address, the registered mobile number and registered e-mail address.
2) The reason/reasons for the cancellation of GST.
3) The desired date an individual wants for the GST cancellation.
4) The details of the value and the tax which is payable on the stock of inputs, the inputs that are available in semi-finished goods, inputs that are available in finished goods and the stock of capital good, plant and machinery.
5) The details of registration of the entity/business wherein the existing business/entity have gone through a merger, amalgamation or been transferred.
6) The details of the latest GST return filed by the registered taxpayer along with the ARN details of the latest return.
MAKING THE FINAL GST PAYMENT
When an individual registered under GST applies for GST cancellation, it is mandatory for him/her to pay any overdue GST liability as per the last GST returns that have been filed.
The input tax contained in the inventory of input, semi-finished goods, finished goods, and capital goods/or the output tax liability of such goods whatever is higher must be paid by the registered taxpayer. The input tax credit on the existing inventory has to be paid back, as the registered taxpayer will not be eligible to claim input tax credit(ITC) on the cancellation of their GST registration.
The final GST payment can be done through GST electronic credit or cash payment and has to be made during the submission process of filing the final GSTR-10 returns.
REASONS FOR NON-ACCEPTANCE OF GST CANCELLATION APPLICATION
Once the GST cancellation application has been filed and submitted a GST Officer may decide against accepting such an application due to the following conditions:
1)The GST cancellation application has been submitted in an incomplete manner.
2)In the event of the transfer, merger or amalgamation of the registered business to a new business entity, this new entity has not still registered with the tax authorities prior to the submission of the cancellation application.
In such situations, the GST Officer will provide and send a written intimation to the applicant in regards to the nature of the discrepancy in their cancelation application.
The applicant is then required to respond to the intimation within seven days of the date of receipt of this letter. If the applicant fails to respond to this intimation within seven days the GST Officer may reject the application after providing the applicant with an opportunity to present their side at a later date.
FILING THE FINAL GST RETURN IN FORM GSTR-10
Any individual whose GST registration has been cancelled is required to file a final GST return in Form GSTR-10 within 90 days of the date of cancellation/or the date of order of the cancellation, whichever may be later. The reason behind this is to ensure the registered taxpayer is clear of all liabilities. The only individuals/entities who are exempted are input service distributors or non-resident Indians who pay tax under section 10,section 51 or section 52.If a final GST return is not filed in Form GSTR-10, the registered taxpayer will be issued a notice in GSTR-3A. The registered taxpayer is given a period of 15 days to respond to this notice. If the registered taxpayer fails to reply to such a notice then steps will be taken to assess the liability of the taxpayer based on the information available with the GST Officer. The assessing notice is withdrawn if the registered applicant files and submits the return within a period of 30 days from the issue of notice.
NOT CANCELLING A GST REGISTRATION
After getting a GST registration if there has been zero business activity a registered taxpayer should initiate steps to cancel their GST registration as per the steps mentioned above. If for whatever reasons the registered taxpayer stops the process of filing GST returns which leads to their GST registration being cancelled by the GST department, then the same registered taxpayer will not be eligible to apply for another GST registration under the same PAN. Also, if a GST registration gets cancelled by the GST department the registered taxpayer would then have to apply for the revocation of their GST registration cancellation by paying all the late fees. After the application has been restored, then the registered taxpayer would have to file GST in a proper manner or continue filing their GST returns in an orderly and regular manner.
Hence, once a GST registration has been registered and obtained, it is important for the registered taxpayer to monitor the filing of returns and follow the rules very diligently. If for whatever reason there is no business activity, the registered taxpayer should file for cancellation of GST registration at the earliest date.
CANCELLATION OF GST REGISTRATION THROUGH ACE ALLIANCE
In case you have a GST registration that you would like to surrender, please get in touch with our GST experts at ACE ALLIANCE. Our team of experts will verify the status of your GST return filing, help in the filing of any overdue GST returns and also help you in filing for cancellation of your GST. Once your GST cancellation application has been submitted, our team will monitor the application, and respond to any queries which are raised by the department to help you complete the process.
BASIC
Completely managed GST registration cancellation service with Expert Support. Applicable for entities with no activities.
STANDARD
Completely managed GST registration cancellation service with Expert Support and filing of last GST return.
PREMIUM
Completely managed GST registration cancellation service with Expert Support, filing of last GST return and responding to any notice.