GST Cancellation: Documents, Fee and Process

You can cancel your GST registration if the GST rules don’t apply to you or you are shutting down your business or profession, or the tax officer calls for cancellation. Are you a business owner in India looking to cancel your GST registration? Contact our Tax Experts to learn more about GST Cancellation.

GST Cancellation : Overview

Cancellation of GST registration simply means that the taxpayer will not be a GST registered person anymore. He will not have to pay or collect GST or claim the input tax credit and accordingly, need not file GST returns.

Once GST Registration will get cancelled following will be consequences

The taxpayer will not pay GST anymore
For certain businesses, registration under GST is mandatory. If the GST registration is cancelled and business is still continued, it will mean an offence under GST and heavy penalties will apply.

Reasons for GST Registration Cancellation

GST authorities may initiate the termination of a taxpayer’s GST registration for a variety of reasons. Among the most common explanations are:

Non – compliance: If a taxpayer fails to comply with GST requirements, such as failing to file returns for an extended period of time, authorities have the authority to terminate their registration.
Business Discontinuation: When a company closes or is sold, the GST registration becomes obsolete and is subject to cancellation.
Changes in Business Structure: Certain changes in business structure, such as amalgamation, demerger, or ownership change, may result in GST Registration cancellation.
Voluntary Cancellation: Taxpayers who no longer wish to continue their GST registration may request for voluntary cancellation.

GST Registration Cancellation Fees

₹3499 ₹ 2499/-

Application for GST Registration Cancellation
Final Return filing

Documents Required For GST Registration Cancellation

The following documents are required for GST Registration Cancellation:

User ID and Password of GST Registration
A copy of the GST registration certificate.
A copy of the PAN card of the registered person.
Details of the tax paid on such inputs, semi-finished, finished goods held in stock on the date of cancellation.
Application for Cancellation of Registration in Form GST REG-16.
Detail of Last Return filled by Taxpayer

GST Cancellation Process

Step 1: Gather Your Documents:

Before you can cancel your GST registration, you will need to gather the following documents:

Your GST registration number
Your GST login credentials
Your GST returns and payment records
Your business closure or transfer documents (if applicable)

Step 2: Log in to the GST Portal:

Step 3: Navigate to the Cancellation Form:

Once you are logged in, navigate to the GST registration cancellation form.

Step 4: Fill Out the Cancellation Form:

Fill out the GST registration cancellation form, providing all the necessary information, including your reason for cancelling your GST registration.

Step 5: Submit the Form:

Once you have filled out the form, submit it electronically.

Step 6: Wait for Confirmation:

You will receive a confirmation of your GST registration cancellation via email or SMS. The cancellation will take effect from the date you specified in the form.

GST Final Return Filing

A GST Final Return is a return that must be made by a registered individual when their GST registration is cancelled. A registered individual who cancels their GST registration must file a final return within three months of the cancellation date. This return will include information on all supplies made and received during the registration period, as well as the tax liability and input tax credit claimed.

The GST Final Return is a summary of all transactions that occurred during the registration period, including information on all taxable supplies, exempt supplies, and non-GST supplies. It also includes information on all input tax credits claimed as well as any outstanding tax liabilities. Even if no transactions occurred throughout the reporting period, the Final Return must be filed.
Once the Final Return is filed, the GST officer will review it and may request further information if necessary. If the officer is pleased with the return, he will issue a Form GST REG-06 acknowledgement. The GST Final Return acts as the registered person’s account closure with the GST administration.

It is vital to note that if a registered person fails to file the GST Final Return within the stipulated time limit, they would be fined Rs. 100 per day, up to a maximum of 0.25% of their sales in the state or union territory. Therefore,

Important Considerations

Before proceeding with GST Registration cancellation in India, consider the following:

Outstanding Dues: Ensure that all outstanding dues are cleared before applying for cancellation to avoid any issues.
Input Tax Credit: Make sure to utilize any remaining input tax credit before cancellation, as it will be forfeited post-cancellation.
Legal Implications: Understand the legal implications of GST Registration cancellation, including penalties for non-compliance.

Frequently asked questions (FAQs)

1. What is GST Surrender or GST Cancellation?
GST Surrender or GST RegistrationCancellation refers to the process of voluntarily canceling a GST registration when a taxpayer no longer requires it or the business is closed.

2. Who can apply for GST RegistrationCancellation?
Any registered taxpayer under GST who wants to discontinue their business, close a branch, or no longer meet the conditions for registration can apply for cancellation.

3. When should I apply for GST RegistrationCancellation?
You should apply as soon as you stop doing business or if your turnover falls below the threshold limit making you ineligible for GST registration.

4. How do I apply for GST Cancellation?
You can apply online on the GST portal by submitting Form GST REG-16, stating reasons for cancellation and details of stock and liabilities.

5. What documents are required for GST Registration Cancellation?
Typically, you need details of stock on the date of cancellation, tax payment challans, and any other relevant business closure documents.

6. What happens after I apply for GST Cancellation?
The tax officer reviews the application and may ask for additional information. After verification, the registration is either canceled or the application is rejected with reasons.

7. How long does the GST RegistrationCancellation process take?
The tax officer must process the application within 30 days of receipt of the application.

8. Can I continue business after applying for GST Registration Cancellation?
No, once the cancellation is granted, you are not allowed to carry out any business under the canceled GST registration.

9. What if I have pending tax liabilities at the time of cancellation?
All pending taxes, interest, penalties, and fees must be paid before cancellation can be approved.

10. Can I reapply for GST registration after cancellation?
Yes, if you start business again and meet the criteria, you can apply for fresh GST registration.

11. Is there any impact on input tax credit (ITC) after cancellation?
Yes, you must reverse ITC on inputs, capital goods, and stock held at the time of cancellation, as per GST rules.

12. Can a GST officer cancel registration without taxpayer’s request?
Yes, the officer can cancel registration if the business is found to be non-operational or violating GST laws.