Registration cancellation is more significant than GST registration. The reason is simple: Everyone registers for GST, and the procedure is straightforward. On the other hand, cancellation is more challenging since few people have encountered it, and they are not familiar with the procedures or the paperwork that must be submitted for cancellation.
Let us understand the cancellation of GST registration.
- The taxpayer will no longer be a GST-registered person if their GST registration is canceled.
- Taxpayer won’t be required to submit GST returns because he won’t have to pay, collect, or claim GST or make an input tax credit claim.
Circumstances in which cancellation can take place:
- Requested by the taxpayer
- Ordered by the tax officer
- Requested by legal heirs in case of taxpayer’s death
Some reasons for GST cancellation:
- A registered person, who is no longer liable to be registered under GST
- The business has been discontinued
- Change in the constitution of business
Here’s how the cancellation of GST registration is done on the GST Portal in case it is voluntarily done by the taxpayer.
If the cancellation is initiated by the legal heirs of the taxpayer due to his death, then follow these steps:
- Cancellation application needs to be made in form GST REG 16
- GST REG 16 contains details of inputs, semi-finished, finished goods held in stock on the date on which cancellation of registration is applied, Liability thereon, and Details of the payment
- The proper officer has to issue 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
If the cancellation is initiated by the tax officer if he finds the reasons, then follow these steps:
- The officer will send a show cause notice to the taxpayer in form GST REG 17
- The taxpayer shall reply to the same in form REG 18 within 7 days of receiving the notice.
- If the officer is satisfied with the reply, he shall pass an order in form GST REG 20
- If the officer is not satisfied with the reply, he shall pass an order in form GST REG 19 for the cancellation of registration.