GST Cancellation Process: A Complete Guide

What is the cancellation of GST in India?

Cancellation of GST in simple words means the cancellation of the person’s GST registration, in other words, the taxpayer won’t be registered with GST and he won’t have to collect or pay GST anymore.

Why does one cancel his GST registration?

GST cancellation is mostly required by a businessman in situations when they shut down their business in other cases when a person’s income is less than 20 lakhs or if he was registered under GST accidentally or wrongfully he can opt for cancellation of GST.

Who can cancel GST registration?

In India based on the laws, rules, and regulations the Tax officer, an individual who has applied for cancellation on the official online portal and the legal heirs of the taxpayer can cancel GST registration in India.

What are the consequences of cancellation of GST?

If a business after the cancellation of GST is still functioning it amounts to an offense and a hefty penalty would be charged over that person,

What are the Forms of cancellation?

The Forms of cancellation are basically the forms which one fills for the purposes of cancellation of GST in the offline method. The application for the purposes of cancellation is made in FORM GST REG 16. The FORM GST REG 16 must contain the details of unfinished and finished goods which are held in stock by the taxpayer along with the liabilities and the details of payment. The appropriate officer then has to issue an order under FORM GST REG-19 within 30 days from the date of receipt of the application.

What are the reasons on which the tax officer shall cancel the GST registration?

The tax requires a genuine reason for the purposes of cancellation of GST few of them are as follows: –

The individual does not carry on any business from the business place so declared.
Supply of goods without any bills or invoices.
Anti-profiteering provisions are violated by him.

What is the procedure for cancellation of GST registration in India by the Tax officer?

If the tax officer is satisfied and has reason to believe that the reasons for the cancellation of GST does exist, he may proceed further with the cancellation process: –

The first step is that the tax officer shall send a show-cause notice to the person under FORM GST REG-17.
The individual upon receipt of notice is provided a period of 7 days to reply under FORM GST REG-18 stating the reasons as to why his registration should not be cancelled.
If his reply is convincing and satisfactory the tax officer shall drop the proceedings against him, would not cancel his registration and pass an order under FORM GST REG-20.
If however the reply is not satisfactory and the registration is liable to cancelled he shall cancel the same by passing an order under FORM GST REG- 19. Such an order would be sent within 30 days from the date on which the reply to the tax officers notice has been received.

Revocation of cancellation of registration

The revocation of cancellation means the reversal of the process of cancellation. In other words, when the decision of the cancellation of the registration is reversed and such a GST registration is still valid, this process of reversing is known as a revocation.

Now the question that arises is who can apply for revocation of cancellation of registration? The answer to the same is the individual whose GST registration has been canceled by the Tax officer on his own motion. Within 30 days from the date on which the tax officer has suo moto canceled the registration of GST, the taxpayer may apply for the process of revocation.

Procedure:

The person having GST registration can make a submission of an application in the FORM GST REG-21 (if registration canceled by tax officer on his own motion).
He must submit such a form within 30 days from the date of the cancellation order via the common portal.
Upon being satisfied the tax officer can revoke the process of cancellation by an order under FORM GST REG-22 within 30 days from the date of receipt of the application by the taxpayer.
If unsatisfied the tax officer can reject the revocation application under FORM GST REG-05. However, it is to be noted that the officer must issue a show-cause notice under the FORM GST REG-23 to show the applicant why his application should not be rejected. The applicant is provided a weeks’ time to reply to the notice.
Upon receiving the reply to the notice from the taxpayer the tax officer shall take the decision within a period of 30 days from the date of receipt of the taxpayer’s notice in the FORM GST REG-24.