Cancellation Of GST Registration & Revocation Of Cancelled Registration

The cancellation of GST registration granted to a business can be initiated by the department on its own or by the registered person.

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GST Registration can be Cancelled in the following Cases

  • Discontinuation of business
  • Transfer of business fully for any reason including death of proprietor
  • Amalgamation
  • Demerger of business
  • Otherwise disposed off
  • Change in constitution of business
  • Taxable person no longer liable to be registered under GST provisions

Voluntary Application For Cancellation Of Registration By Registered Person

Application for cancellation has to be made in form GST REG 16. The applicant shall discharge liability of input tax credit on stock/ capital goods or output tax payable on such goods on the date on which cancellation of registration is applied whichever is higher before cancellation of registration.

1. Fill online form GST REG 16 on GST portal-

2. The following details must be included in form GST REG 16-

  • Details of inputs, semi-finished, finished goods held in stock on the date on which cancellation of registration is applied
  • Liability thereon
  • Details of the payment

3. The proper officer reviews the application and issues an order for cancellation in the form GST REG-19 within 30 days from the date of application.

The cancellation will be effective from a date determined by the officer and he will notify the taxable person.

Cancellation Of Registration By Department On Its Own

The proper officer can cancel the registration of person for the following reasons:

1. If a registered person contravenes the provisions as follows:

  • does not conduct any business from the place of business.
  • issues invoice or bill without supply of goods or services or both in violation of the provisions of this Act, or rules made thereunder
  • violates the provisions of Anti-profiteering
  • violates the provision of Rule 10A (Furnishing of Bank Account Details)
  • avails input tax credit in violation of the provisions of Section 16 of the Act or the rules made thereunder
  • furnishes the details of outward supplies in FORM GSTR1 under Section 37 for one or more tax periods which is in excess of the outward supplies declared by him in FORM GSTR-3B
  • violates the provision of Rule 86B (Output Tax Liability can be set off using the electronic credit ledger only upto the extent of 99% of the said liability where the value of taxable supply in a month exceeds Rs. 50 lakhs)

2. If voluntary registered person has not commenced business within 6 months of registration
3. If registered person has not filed returns for continuous 6 months ( 3 months in case of composition taxpayer)
4. If registration was obtained by means of fraud, willful misstatement or suppression of facts

Procedure For Cancellation Of Registration

  • If the proper officer has reasons to cancel the registration of a registered person then he will send a show-cause notice to such person in form GST REG-17.
  • The person must reply in form REG–18 within 7 days from the date of service of notice on why his registration should not be cancelled.
  • If the reply is found to be satisfactory, the proper officer will drop the proceedings and pass an order in the form GST REG–20.
  • If the registration is liable to be cancelled, the proper officer will issue an order in the form GST REG-19. The order will be sent within 30 days from the date of reply to the show cause.

Revocation Of Cancellation Of Registration

This is applicable in case where the tax officer has cancelled the registration of a taxable person on his own motion. Such taxable person can apply to the officer for revocation of cancellation within 30 days from the date of the cancellation order by filing online Form GST REG-21 on GST portal.

If the period of 30 days has been lapsed, an application has to made with Additional commissioner/Joint commissioner for extension of 30 days. For further extension of 30 days the same is to be applied with commissioner.

A business can still apply for GST registration once it has been cancelled except where it was cancelled by the proper officer.