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GST registration can be canceled voluntarily if the business is dormant or does not have the necessary business turnover. A GST officer may also cancel a business's GST registration if it fails to comply with the law. Once canceled, the person or entity is no longer required to file GST returns, pay GST, or collect GST.
At Taxhint Advisors, we are committed to providing a seamless and hassle-free GST cancellation service. Our team of knowledgeable experts is prepared to help you at every stage, from understanding the requirements for cancellation to ensuring timely and compliant submissions.
Upon cancellation of GST registration, the person or entity is no longer recognized as a GST-registered taxpayer. This termination implies that they are not obligated to collect, file, or pay GST and are relieved from the duty to file GST returns or claim input tax credits.
If there is no business activity after obtaining GST registration, the taxpayer must initiate the prescribed cancellation procedure. Failure to do so may prevent applying for a new GST registration with the same PAN.
The following types of persons can apply for GST Cancellation:
Taxpayers with a GST registration may choose to initiate the cancellation process on their own. This could be due to the perceived lack of need for registration or because they meet certain requirements for cancellation.
Tax authorities have the authority to cancel a taxpayer's GST registration if they discover any violations of the law or discrepancies in the taxpayer's actions or documentation. They can use the GST REG-17 form to release a show-cause notice to start this process.
When a taxpayer passes away, their heirs or legal successors may file a request to have their GST registration revoked.
A cancellation request in Form GST REG-16 must be sent to the GST Department by an individual or organization having a GST registration to cancel it. If the GST Officer is satisfied with the application after evaluating it, they will issue an order in Form GST REG-19 terminating the GST registration.
Voluntarily canceling a GST registration helps avoid the hassle of filing monthly GST returns and incurring penalties or late fees.
If an officer has a valid reason, they may initiate the cancellation process under GST. A show-cause notice in Form GST REG-17 would be sent out as the first step. The taxpayer will be notified of the pending cancellation and will have a chance to respond before the final decision is made.
In the event of a sole proprietor’s death, the business's GST registration may be cancelled at the request of the proprietor's legal heirs.
Tax Deductors/Collectors: The right to request GST cancellation is not available to entities registered specifically for tax collection or deduction.
Holders of Unique Identity Number (UIN): Entities or individuals with a UIN, such as foreign diplomatic missions or United Nations agencies, cannot apply for GST cancellation. They use the UIN primarily for filing tax refund claims.
GST registration can be cancelled by the taxpayer or by the GST authorities due to various reasons. Here are the key reasons for such cancellations:
The cancellation of GST registration has several significant implications for businesses. Here are the key consequences:
A company that cancels its GST registration is no longer able to collect GST from its clients. Updates to all invoicing and billing systems are required by the company to guarantee that GST is not applied after the cancellation's effective date.
ITC is not available for purchases made after the GST registration has been cancelled. Furthermore, as of the day immediately prior to the cancellation date, the taxpayer is required to pay a sum equal to the ITC for capital goods, inputs in semi-finished or finished items, and goods held in stock, subject to specific criteria.
Within three months after the date of cancellation or the date of the cancellation order, whichever comes first, the taxpayer must file a final return using Form GSTR-10.
Businesses still have to keep their financial records, accounts, and paperwork up to date for six years following the cancellation date. Any upcoming tax authority audits, inquiries, or compliance checks will require this.
Penalties and legal action by the GST authorities may result from failure to comply with the conditions of the GST law following cancellation, such as failing to file the final return or failing to pay the amount owed on the ITC reversal.
Regular business activities may be disrupted by the revocation of a GST registration. After cancellation, reapplying for GST registration entails a new application and examination by tax authorities.
If eligible taxpayers ask for a refund within the allotted time frame, they will be refunded for any excess GST paid after cancellation.
The cancellation of a GST registration in one state or for one vertical may result in the cancellation of all GST registrations linked to the same PAN across India if a business operates in numerous states or has various business verticals within a state.
Login to the GST Portal: Navigate to the GST Portal and log in using your credentials.
Go to the ‘Services’ tab, select ‘Registration,’ and choose ‘Application for Cancellation of Registration.’
After submission, an Acknowledgement Reference Number (ARN) is generated. Use the ARN to track the status of your application.
A GST officer will review the cancellation application. If additional information is needed, they may request it through the GST portal. Respond promptly to any queries.
If the officer is satisfied, a cancellation order will be issued using Form GST REG-19, specifying the effective date of cancellation.
The person or company must file a final GST return on Form GSTR-10 within three months of the cancellation date or the cancellation order date, whichever comes first, following the conclusion of the GST cancellation process.
The purpose of this is to ensure that the taxpayer does not owe any GST. Distributors of input services and non-resident taxpayers required to pay tax under Sections 10, 51, or 52 are exempt from this provision.
The taxpayer will receive a notice in Form GSTR-3A asking them to complete the final GST return within 15 days of the notice's issuance if it is not filed in Form GSTR-10.
If the taxpayer disregards the notification, actions will be taken utilising the information at hand to ascertain the taxpayer's liability.
The process of cancelling a GST registration can be difficult to navigate, but Taxhint Advisors can make the process easier and more effective. Here's a detailed explanation of our help with closing a GST account:
The actual process begins with the submission of the GST cancellation application using Form GST REG-16 on the official GST portal. The form requires detailed information, such as:
The actual procedure starts when the application for GST cancellation is submitted on the official GST portal using Form GST REG-16. The form requests certain details, including:
Following submission, the application is examined by a GST Officer. It is anticipated that the Officer will provide a cancellation order in Form GST REG-19 within 30 days of the application date. The officer will decide when the GST cancellation takes effect and will notify the taxpayer of this decision. The question of how to terminate a GST account is therefore resolved.
In some instances, the concerned Officer may reject the application for the following reasons.
The cancellation of GST registration can be revoked under specific circumstances:
Consulting with a Taxhint Advisors GST Expert might be quite helpful if you're thinking about closing your GST account...
When Taxhint Advisors are on your side, cancelling your GST registration is a hassle-free process.