Registration under GST is mandatory for all taxpayers having turnover above the basic threshold limit. It is also mandatory for certain other individuals including UIN holders, e-commerce operators, persons deducting TCS/TDS, etc. All these entities at intervals have to file GST returns and comply with rules & regulations stated under the GST Act. Other than provisions stated for registration and filling of taxes the act also states for provisions for taxpayers who are no more liable to pay GST or want to willingly opt for cancellation of their GST registration.
GST – Surrender or Cancellation of Registration
Reasons for Cancellation of GST Registration
Voluntary Cancellation
The Act certainly provides freedom to a taxpayer to apply for cancellation of GST registration whenever :
– He wants to discontinue or close his business permanently.
– He ceases to be liable to pay tax.
– He transfers his business on account of merger, amalgamation,de-merger, sale, lease or otherwise.
– He prefers to change the constitution of his business (leading to change in PAN).
– He did not commence any business or is no longer required to be liable to work as a registered entity.
Non-Voluntary / SUO Moto Cancellation
A tax official at any time with subject to provisions of the act and on giving a sufficient opportunity to the taxpayer to exhibit his case – can issue a SUO MOTO order for cancellation of GST registration for the following reasons :
– When the registered business is conducted from a place other a registered/declared place of business.
– On the death of proprietor or authorized individual of business.
– If the taxpayer defaults or operates its business against the provisions of the GST Act,2017.
– When business is not commenced by the taxpayer after registration up to a certain time-frame.
– If the taxpayer is found in default of provisions related to invoicing of goods and services in GST.
– Any other act as he deems suitable for cancellation or timely prescribed in the act.
How to Cancel GST Registration?
GST made the overall compliance handling of business very simplified. A taxpayer opting for cancellation of GST registration can initiate an application for the same online on the GST common portal without moving off to multiple judicial offices.
If appealed for cancellation by the taxpayer
Cancellation of GST by a taxpayer can be preceded in two different ways :
– By selecting the ‘ Cancellation of Provisional Registration ‘ option on the common portal (for those who didn’t issue any tax invoice ).
– By filling GSTR 16, providing reasons and details of business activities for cancellation.
On receipt of application from the taxpayer online or off-line, the proper officer will then verify the details of business including invoices (if any issued), stock etc. and will place an order for cancellation issuing a Form GST REG -19. On confirmation from the proper officer, the registration shall be considered cancelled from the date of issue of cancellation approval order from the officer.
If cancelled by officer
The proper officer at any-time subjecting to provisions of the act can issue an order for cancellation of registration issuing a ‘Show Cause Notice’ to the taxpayer highlighting the reason for such decision. The taxpayer has to respond back to the officer filling GSTR Form 18 within 7 days of receipt of such show cause notice.
On receipt of a satisfying response from the taxpayer, the proper officer can issue an order for revocation of cancellation order intimating the same to the taxpayer or might issue a final order for cancellation.
Revocation of GST Registration Cancellation
Within 30 days of issue of cancellation order, the application for cancellation of GST registration can be revocated, even if the cancellation is requested by the taxpayer himself or if initiated by the proper officer. The taxpayer at any-time within 30 days can request on the GST portal to revocate his application for cancellation and request for the same to the proper officer also.
For reasons stated by the taxpayer, the officer can either accept or reject the application stating the further reason through a Show Cause Notice.