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GST Registration Cancellation
Cancellation of registration under GST
You can cancel your GST registration if the GST rules don’t apply to you or you are shutting down your business or profession, or the tax officer calls for cancellation. This article will guide you through the different types of cancellations, and the overall process.
Latest Updates on Cancellation of GST Registration
31st March 2023
CGST notification no: 03/2023
The department extended the time limit to apply for revocation of GST registrations cancelled on or before 31st December 2022. The reasons for cancellation should be due to the non-filing of tax returns. Also, only the taxpayers who couldn’t apply for revocation within 30 days of the cancellation order can file it.
Click here for more details.
18th February 2023
49th GST Council meeting updates-
The Council recommend an amnesty scheme to help taxpayers whose GST registration has been cancelled due to the non-filing of GST returns. Under this amnesty scheme, the department would allow the taxpayers to file for the revocation of GST registration which couldn’t file the same earlier.
1st February 2022
Budget 2022 updates-
Section 29 of the CGST Act is amended for cancellation of GSTIN by officer:
1. If a composition taxable person fails to file an annual return for three months beyond the due date of 30th April of the following year, his registration can get cancelled.
2. For any other regular taxpayer, registration will be cancelled if there is the default for consecutive tax periods as prescribed against earlier the six months consecutive default in return filing.
21st December 2021
From 1st January 2022, CBIC made the aadhaar authentication mandatory to apply for revocation of cancelled GST registration under the CGST Rule 23 in REG-21.
29th August 2021
Taxpayers can get extended time up to 30th September 2021 to revoke cancelled GST registration if the last date for the same falls between 1st March 2020 and 31st August 2021. It applies if the GST registration is cancelled under Section 29(2) clause (b) or (c) of the CGST Act via CGST notification number 34/2021 dated 29th August 2021.
28th May 2021
Due date to file an application for revocation of cancellation of registration falling between 15th April 2021 up to 29th June 2021 is 30th June 2021.
Voluntary GST Cancellation
If a person or entity with GST registration wishes to cancel their GST registration, a cancellation request must be submitted to the GST Department in Form GST REG-16. After reviewing the application, if the GST Officer is satisfied, he or she will issue an order to terminate GST registration in Form GST REG-19.
The following are some of the top reasons for voluntary GST registration cancellation:
Voluntarily cancelling a GST registration can save the business owner from unnecessary hassles of filing GST returns each month and payment of penalty or late-filing fee.
Cancellation by GST Officer
An officer can initiate the cancellation of a GST registration under GST if the Officer has justification to cancel the GST registration. The proceedings for GST Cancellation by Officer will begin by issuing a show-cause notice in Form GST REG-17.
A GST officer can start the cancellation process if any of the following events occur.
In case of cancellation by the GST Officer, the Officer would notify the taxpayer whose GST registration is liable to be terminated before cancellation. The taxpayer would then be given a reasonable opportunity to be heard before their GST registration is cancelled.
The notice to the taxpayer from GST Officer would be sent in Form GST REG-17 with specific reasons why the GST registration should be cancelled. The notice would also allow the taxpayer to respond to the notice and have a date and time if a hearing is scheduled.
If the taxpayer responds to the notice and the proper authority is satisfied with the response, he or she may dismiss the case and issue an order in Form GST REG-20. If he is not satisfied, he may issue a Form GST REG-19 order cancelling the GST registration.
Procedure for GST Registration Cancellation
IndiaFilings can help taxpayers cancel their GST registration online. Before beginning the process, the taxpayer must file all overdue GST returns. If there is non-compliance with the GSTR-3B, GSTR-1, or GST annual return, the late return must be filed before the GST cancellation process can begin.
Step 1: GST cancellation application is submitted using Form GST REG-16 on the common GST portal. The following information must be included in the GST cancellation application.
Step 2: The GST Officer has to review the application and issue an order cancellation in the Form GST REG-19 within 30 days from the application’s date. The cancellation will be effective from a date determined by the Officer, and he will notify the taxable individual.
Consult an IndiaFilings GST Expert if you have a GST registration you want to cancel. We’ll check your GST return filing status, assist you in completing any outstanding GST returns, and file for GST cancellation.
We will also monitor your GST registration cancellation application, reply to any questions, and assist you in completing the process once you have submitted it.
Once GST registration is cancelled, the person or entity must file a final GST return on Form GSTR-10 within three months of the cancellation date or the date of the cancellation order, whichever comes first.
This is done to make sure the taxpayer has no GST dues pending. This provision does not apply to input service distributors or non-resident taxpayers who must pay tax under Sections 10, 51, or 52.
If the final GST return is not filed in Form GSTR-10, the taxpayer will receive a notice in Form GSTR-3A requiring him or her to do so within 15 days after the notice’s issuance.
If the taxpayer ignores the notice, steps will be made to determine the taxpayer’s liability using the facts available to the concerned Officer. The assessment order will be cancelled if the applicant files the return within 30 days of receiving the notice.
Preparing to Cancel GST Registration
Before starting the GST cancellation process, the applicant must pay any overdue GST liabilities. Furthermore, the taxpayer must remit the input tax in the stock of inputs, semi-finished goods, finished goods, and capital goods, or the output tax liability of such goods, whichever is larger.
The input tax credit on the current stock must be repaid, as the taxpayer will no longer be eligible to claim ITC if the GST registration is cancelled.
GST electronic credit or cash ledger can be used to make the final GST payment. The final payment can be made at the same time that the final GSTR-10 return is being filed.
Rejection of application for GST cancellation
In some instances, the concerned Officer may decide to reject the application for the following reasons.
In such circumstances, the concerned Officer provides an intimation in writing to the applicant regarding the discrepancy’s nature. The applicant must respond to the same within seven days of the date of receipt of the letter. If the applicant fails to do the same, he may reject the application after providing him/her with an opportunity to be heard.
Revocation of GST Cancellation
Revocation of GST cancellation means that the cancellation decision has been overturned, and the registration remains valid. This only applies when a tax officer cancels a taxable person’s registration on his initiative. A taxpayer can apply within thirty days of receiving the cancellation order for revocation of the order. The following are the steps to file for revocation of GST cancellation:
If a registered person’s registration has been cancelled suo-moto by the proper Officer, an application for revocation of cancellation in form GST REG-21 can be filed within 30 days of cancellation order.
If the GST Officer is satisfied, he or she can rescind the cancellation of registration within 30 days of receiving the application by issuing an order in form GST REG-22. Reasons for registration revocation or cancellation must be documented in writing.
Further, the Officer can also issue an order in form GST REG-05 rejecting the revocation application and informing the applicant. However, before rejecting an application, the Officer must send the applicant a show-cause notice in GST REG–23, asking them to explain why the application should not be refused. Within seven working days of receiving the notice, the applicant must respond in form GST REG-24. The proper officer will decide within 30 days of receiving the applicant’s clarification in form GST REG-24.
Benefits of Voluntary GST Cancellation
If no business activity occurs after acquiring GST registration, the taxpayer must begin the GST cancellation process as outlined. If a taxpayer stops filing GST returns and allows his GST registration to lapse, he will be unable to apply for fresh GST registration using the same PAN.
Further, if the government cancels a GST registration, the taxable person must first apply for the cancellation to be revoked by paying any late fees. Following the restoration, appropriately cancel the GST or continue filing GST returns.
As a result, once a GST registration is received, the taxpayer must keep track of compliance. Hence, if there is no commercial activity, apply for GST registration cancellation as soon as possible.
GST Registration Cancellation FAQ's
Yes. Any entity wishing to claim input tax credit can be registered voluntarily, even if not liable to be registered. After registration, voluntarily registered entities will also have to comply with regulations as applicable to a normal taxable person.
Yes, the annual return needs to be filed even if the taxpayer has got his registration cancelled during the said financial year.
Suo Moto Cancellation of registration may be initiated by the Tax Official for various situations as mentioned in the provisions of GST law like: –
- Any Taxpayer other than composition taxpayer has not filed returns for a continuous period of six months
- Supplies any goods and / or services without issue of any invoice, in violation of the provisions of the Act or rules made thereunder, with the intention to evade tax
- Issues any invoice or bill without supply of goods and/or services in violation of the provisions of this Act, or the rules made thereunder leading to wrongful availment or utilization of input tax credit or refund of tax
- Collects any amount as representing the tax but fails to pay the same to the account of the Central/State Government beyond a period of three months from the date on which such payment becomes due
- Fails to pay any amount of tax, interest or penalty to the account of the Central/State Government beyond a period of three months from the date on which such payment becomes due
- Person is no longer liable to deduct tax at source as per the provisions of GST Law
- Person is no longer liable to collect tax at source as per the provisions of GST Law
- Person no longer required to be registered under provisions of GST Law
- GST Practitioner is found guilty of misconduct in connection with any proceeding under the GST Law.
- Discontinuation/Closure of Business
- Change in Constitution leading to change in PAN
- Ceased to be liable to pay tax
- Transfer of business on account of amalgamation, merger/demerger, sale, lease or otherwise disposed of etc.
- Death of Sole Proprietor
- Composition person has not furnished returns for three consecutive tax periods,
- Registration has been obtained by means of fraud, willful misstatement or suppression of facts. Etc.
Yes. Registration cannot be cancelled without a Show Cause Notice being given to taxpayer and a reasonable opportunity of being heard by the Tax Official. Thus, in case of Suo Moto cancellation of registration, a Show Cause Notice shall be issued by the Tax Official/ Proper officer to the taxpayer and taxpayer would be given a chance to file clarifications in the stipulated time limit.
There must be a valid reason for initiation of proceeding for Suo moto cancellation as specified under Section 29(2) of the CGST/SGST Act.
You need to provide response within the prescribed time limit of 7 working days’ time to file reply to the Show Cause Notice (SCN) using the Services > Registration > Application for Filing Clarifications link. If no response is given within prescribed 7 working days, the Tax Official can proceed with Cancellation of registration.
In case the Tax Official is satisfied with the response received from the taxpayer, on the Show Cause Notice issued, the proceedings can be dropped.
- Primary Authorized Signatory will be intimated about dropping of SCN by SMS & Email.
- Issuance of Order for dropping of SCN will also be intimated to the Primary Authorized Signatory by Email and SMS.
- Order will be made available on the taxpayer’s dashboard to view, print and download.
- Status of GSTIN will change from “Suspended” to “Active”.
Effective date of cancellation will be the date as mentioned in the cancellation order.
Cancellation of registration under the CGST Act or SGST/UTGST or IGST Act shall be deemed to be a cancellation of registration under SGST Act / UTGST Act or CGST Act respectively and vice versa.
a) Once registration is cancelled by the Tax Authority, the taxpayer will be intimated about the same via SMS and Email. Order for Cancellation of Registration will be issued and intimated to the Primary Authorized Signatory by Email and SMS.
b) Order will be made available on taxpayer’s dashboard to view, print and download.
c) Status of the GSTIN/UIN/GSTP ID from ‘Proceeding for Cancellation initiated’ to ‘Inactive’ and will be intimated to the other concerned Tax Authority.
d) Taxpayer would not be allowed to file return or upload invoices for the period after date of cancellation mentioned in the cancellation order. Also, GSTP will not be able to carry out GSTP functions for any Taxpayer for the period after the date of cancellation mentioned in the cancellation order.
e) Taxpayer will not be able to amend registration details after issuance of cancellation order. However, email address and mobile number can be updated till dues/ refund are cleared. The facility to file application for revocation (if applicable) will be open for the Cancelled Registration.
Yes, you can login to the GST Portal after suo moto cancellation of registration.
You will not be able to amend registration after issuance of cancellation order.
However, email address and mobile number can be updated till dues/ refund are cleared.
You can submit returns of the earlier period (i.e. for the period before date of cancellation mentioned in the cancellation order), after suo moto cancellation of registration. However, you will not be allowed to file return or upload invoices for the period after date of cancellation mentioned in the cancellation order. Also, GSTP will not be able to carry out GSTP functions on your behalf for the period after the date of cancellation mentioned in the cancellation order.
Navigate to Services > User Services > View Notices and Orders to view the Show Cause Notice regarding Suo Moto Cancellation of Registration.
To know more, you can refer the manual https://tutorial.gst.gov.in/userguide/taxpayersdashboard/index.htm#t=View_Notices_and_Demand_Orders.htm
When the status of your GSTIN is showing as “Suspended” status, you can perform certain activities on GST Portal like filing Appeal, making payment, filing for Refunds, reply to Assessment/Recovery/ Enforcement related orders/ notices, even make non-core amendment etc..
However, once GSTIN is suspended:
- During the suspension status, taxpayer will be allowed to file return or upload invoices only for the period before the registration was suspended.
- Taxpayer will not be able to file core amendment application till the time registration is suspended. However, email address and mobile number can be updated till dues/ refund are cleared.
When a taxpayer files an application for cancellation of registration: Date of Suspension will be the date on which Cancellation application was filed.
Suo Moto cancellation has been initiated by the Tax Official: Date of Suspension will be the date on which notice for Cancellation of registration (Form GST REG-17) is issued.
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