The GST regime, which was implemented in 2017, combines various service levies and indirect taxes under one roof. Whether it sells goods, services, or both, any firm in India must register for GST if its annual revenue exceeds the level set by the regime.
Several businesses, regardless of their overall yearly sales, are required to comply with the GST requirements. Whether or whether registration is required, a person might opt to revoke their registration if they have good reasons.
GST registration can be revoked for a lot of reasons. Cancellation can be undertaken by the GST authority or by registered people at their own request. If a registered individual dies, their legal heirs may file a cancellation petition on their behalf. When a GST registration is terminated, the taxpayer is obliged to file a final return.
GST Cancellation Forms
Forms necessary for GST cancellation are:
- Form GST REG 16 – Cancellation by a Registered Individual
- Form GST REG 17 – used to issue a show-cause notice for cancellation.
- Form GST REG 18 – used to respond to a show-cause notice.
- Form GST REG 19 – used to make a dissolution order.
- Form GST REG 20 – used to halt the cancellation process.
- Form GST REG 18 – used to request a stay of proceedings.
- Form GST REG 21 – used to request the revocation of a cancellation.
- Form GST REG 22 – required for an order reversing the cancellation.
GST Cancellation – Common Reasons:
The requirements and documentation required to cancel your GST registration are laid forth in Section 29 of the CGST Act of 2017. The appropriate officer may revoke the registration at his discretion or based on an application made by the registered person or his legal heirs under the following conditions, according to Section 29(1):
- If the company is closing down.
- If the PAN card has undergone substantial changes.
- If the company’s constitution is revised in any way.
- If the company was demerged, merged with another legal entity, or otherwise disposed of.
- If the firm was completely passed to someone else, including when the proprietor is deceased.
- If the annual turnover is less than a specified amount.
Please bear in mind that, following the modification, even taxpayers who voluntarily enrolled for GST can revoke their registration within one year of registration, even if their turnover is smaller than the specified level.
Furthermore, you cannot request cancellation if you are a tax deductor, tax collector, or taxpayer with an allocated UIN (Unique Identity Number).
Cancellation by the tax officer:
The GST tax officer has the authority to terminate a taxpayer’s GST registration if :
- Does not do business at the listed location of the company.
- Issues an invoice or a bill even though there is no supply of goods or services, in infringement of the GST rules.
- Violates anti-profiteering rules by not passing on ITC benefits to clients, for example.
GST registrations can be revoked under CGST Rule 21 at the discretion of the GST tax officer starting in January 2021 under the following circumstances:
- With a few exceptions, where the taxpayer uses ITC from the electronic credit ledger to discharge more than 99 percent of the tax burden for specific taxpayers – where the total taxable value of supply exceeds 50 lakh in a month.
- When a taxpayer has not submitted GSTR-1 for more than two months because GSTR-3B has not been filed (one quarter for those who opt into the QRMP scheme)
- When a taxpayer makes use of an input tax credit in violation of section 16 of the GST Act or any of the GST rules.
GST Registration Cancellation Procedure
1. Log in to the GST portal via the official GST website.
2. A drop-down menu will appear under the service choice on your dashboard. Select Registration, then ‘Application for Cancellation of Registration.’
3. Three sub-headings will display once you choose ‘Application for Cancellation of Registration:
- Basic details
- Cancellation details
- Verification
4. Fill in the needed information, then click the ‘Save and Continue button. Select the Same as the above option if your company address and your future correspondence address are the same.
5. Enter the reason for the GST registration cancellation. When you fill out the reason for canceling your GST registration, you will be given the following alternatives.
- Changes in the business framework lead to a change in the PAN.
- It was no longer necessary to pay taxes.
- Continuation of a business/closure of a business.
- Others.
- Transfer of a business due to a merger, de-merger, sale, lease, or other reason.
- The sole proprietor has deceased.
6. To complete the Cancellation Form, you must provide the following information.
- Address, email address, and mobile number are all required.
- The reason for the cancellation of GST registration, as well as the most preferred date for cancellation.
- Details from the taxpayer’s last tax return.
- When an existing unit is merged, demerged, transferred, etc., the new entity’s GST registration data are updated.
Please remember that you will have to manually enter the amount of your tax due. To offset tax liabilities, you’d have to fill out either an electronic cash ledger or an electronic credit ledger.
A ‘verification’ option will appear after providing the grounds for cancellation and the relevant data. Fill in the name of the authorized signatory as well as the location where the declaration will be made. In this stage, an OTP will be produced as well. Depending on the signatory, select the appropriate option to submit. A DSC is required for verification in the event of a business or LLP, for example.
Tax Liability Pending
The termination of your registration is unaffected by any pending tax liabilities or obligations. Such duties are still easily fulfillable. You must pay a charge larger than when you cancel your registration.
- One day before the cancellation, the input credit in the form of completed or raw products was stocked.
- As previously stated, the output tax on products.
Amount to be paid in terms of capital and machinery costs is more than:
- A lower percentage of the capital goods input credit.
The transaction value of the above-mentioned items was taxed. of the capital goods input credit. - The transaction value of the above-mentioned items was taxed.
GST Cancellation Revocation
Revoking the GST cancellation is feasible if lodged on time. If a proper officer has issued a cancellation order, you can seek that it be canceled using Form GST REG 21. This form must also be filed within 30 days of the cancellation request. You must clear all defaults and confirm that the program is error-free before requesting revocation. Furthermore, all pending returns must be submitted and all outstanding obligations must be paid in full before GST cancellation may be revoked. When an official is satisfied that all of the following requirements have been met, he or she may issue Form GST REG 22 for the cancellation or revocation of GST Registration.
Final Return
Every person whose registration has been canceled 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 required to guarantee that the taxpayer is free of any debts that may have accrued. This clause does not apply to input service distributors or non-resident taxpayers who are obligated to pay tax under sections 10, 51, or 52.
For more information, please contact our experts at Corproots.
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