GST Registration Cancellation: How to Cancel GST Registration? Rules, Documents Forms & Norms 

GST which stands for goods and services tax is a crucial component of the tax system in India. Canceling your GST registration can have several reasons. Whether you are no longer subject to GST regulations, closing your business or profession, or complying with a request from the tax authority, this article provides a simplified overview of the cancellation process. But before moving into the nitty-gritty details, we should know when an individual should consider the GST registration cancellation. 

Note: If you are looking for expert guidance in the GST registration cancellation procedure, Myitronline.com is here to assist you. Leveraging our knowledge and extensive background, we can simplify the process, guaranteeing that all criteria are satisfied accurately and promptly.

What is GST Registration Cancellation?

The cancellation of GST registration is a process where a taxpayer's GSTIN number, which they receive during GST registration, is terminated. This cancellation can be initiated by the central tax authority or the taxpayer. 

In India, tax officers manage this cancellation process. It's important to note that once the GST number is canceled, businesspersons are not allowed to operate their businesses anymore. 

If they do, the Income-tax department may impose significant penalties. After the cancellation, the business is not required to pay or charge GST. Typically, this indicates either the business is winding down or undergoing a significant change in its structure.

When to Consider GST Registration Cancellation?

In Case GST Regulations No Longer Apply: If you find yourself in a situation where the GST regulations no longer apply to your business, it's essential to consider canceling your GST registration.

In Case of Closing Your Business or Profession: When you decide to close down your business or profession, whether it's a temporary pause or a permanent decision, canceling your GST registration is a step you'll need to take.

In Case Tax Authority Request: In some cases, the tax authority may require you to cancel your GST registration. It's crucial to comply with such requests promptly.

We have mentioned 3 key reasons above you must be aware of before GST registration cancellation. It is important to know when it's essential to cancel the GST registration. Now let’s look at the 

Who Can Cancel GST Registration?

In India, the cancellation of GST registration can be started by either the taxpayer themselves or the tax officer. If the taxpayer passes away, their legal heirs can also request the cancellation. 

The tax officer follows a set procedure for canceling GST registration, which includes sending a show cause notice to the registered person. 

The registered person must respond to this notice within 7 working days from the date of the GST cancellation order. If they fail to respond, their GST number will be canceled.

Forms Used For GST Registration Cancellation 

The GST registration cancellation process involves the use of specific forms. Before proceeding further, it's essential to know the use of every form for GST registration cancellation. These forms are:

1. Form GST REG-16: This form is used for initiating the cancellation of GST registration by the taxpayer.

2. Form GST REG-17: This form is used by the tax authorities to issue a show-cause notice to the registered person, asking them to explain why their GST registration should not be canceled.

3. Form GST REG-18: This form is used by the registered person to respond to the show-cause notice issued by the tax authorities.

4. Form GST REG-19: This form is used by the tax authorities to issue the order for canceling the GST registration if they are not satisfied with the response provided by the registered person.

5. Form GST REG-20: This form is used to stop the procedures of GST Registration cancellation.

6. Form GST REG-21: This form is used to apply for revocation or cancellation of GST registration

7. Form GST REG-22: This form is used to order for revocation of GST registration cancellation

These forms play a crucial role in the GST registration cancellation process, helping to ensure that the procedure is followed correctly.

Step By Step Process To Cancel GST Registration

Cancelling your GST registration can be done in two ways: through the tax office or voluntarily as a taxpayer. Here's how:

Procedure for GST Cancellation by the Tax Office:

1. The tax office sends a show-cause notice to the taxpayer using Form GST REG-17.

2. The taxpayer must respond with a reason to stop the GST cancellation process within 7 days from the notice.

3. If the tax officer is satisfied with the response, they will stop the GST registration cancellation process and issue an order using Form GST REG-20.

Voluntary GST Cancellation by the Taxpayer:

For those who wish to voluntarily cancel their GST registration, follow these steps:

Step 1: Log in to the GST portal at www.gst.gov.in with your login details.

Step 2: Go to the top bar menu, select 'Service', and choose 'Registration' from the dropdown. Then, pick 'Application for Cancellation of Registration.' The dashboard will show three sections: basic details, cancellation details, and verification.

Step 3: In the 'Basic Details' section, fill in the required information. If you want future communications sent to the same address as your principal place of business, check the 'same as above' box and click 'Save and Continue.'

Step 4: After saving the basic details, you'll see the 'Cancellation Details' section on the screen.

Step 5: Choose a reason for GST cancellation from the dropdown. Reasons include a sole proprietor's death, cessation of tax liability, PAN change due to a change in business constitution, business discontinuance, business transfer, and others.

Step 6: Fill in additional details in the cancellation form, including the reason for GST cancellation, the desired date for cancellation, stocks and inputs that attract tax, and details of the latest tax returns filed.

Step 7: Select either the electronic cash ledger or electronic credit ledger to indicate the stock value and tax liability.

Step 8: If the existing unit is transferred, merged, or demerged, enter the GSTIN of the transferee entity.

Step 9: In the verification section, enter the name of the authorized signatory and the place of declaration.

Step 10: Fill in the details of the authorized signatory in the following section and submit the details after choosing the relevant option.

Step 11: Choose between 'Submit to DSC' and 'Submit to EVC.' People with a company/LLP must upload the DSC. After submitting the details in the verification section, an OTP is generated. Enter the OTP, and you will receive an acknowledgment within 15 minutes.

In case of a sole proprietor's death, the legal successor must use Form GST REG-16 to apply for the cancellation of GST registration. If the tax officer initiates the GST cancellation, the taxpayer can apply for revocation of GST cancellation using Form GST REG-21 within 31 days from the issue of the cancellation order.

This process is used to either cancel your GST registration voluntarily or in response to a tax officer's action.

Required Documents For GST Registration Cancellation

To cancel your GST registration, you'll need to provide the following documents:

1. PAN Card of the authorized signatory.

2. Aadhar Card of the authorized signatory.

3. Details of your last GST return.

4. Details about the company authority, particularly if it was merged, demerged, or transferred.

5. Information on the tax you must pay on your remaining stock.

These documents are necessary for the GST registration cancellation process.

What Will Happen When GST Registration Is Canceled?

Wondering what can be the consequences after a successful GST registration cancellation!! Following are the reasons to clear your doubts. 

1. You will receive a notification about the cancellation through SMS and email. You can also access the cancellation order in GST Form REG-17 on your dashboard for viewing, printing, and downloading.

2. After the cancellation date, you won't be able to file returns or upload invoices for the subsequent period. Additionally, GST Practitioners (GSTPs) will cease their GSTP functions.

3. You won't be able to modify your registration details once the cancellation order is issued. However, you can update your email and mobile numbers until all outstanding dues are settled.

4. The status of your GSTIN will change from 'proceeding for cancellation initiated' to 'inactive,' and this change will be communicated to relevant tax authorities.

Wrapping it up

Taxpayers have the convenience of applying for and monitoring GST cancellation online. It is essential to maintain compliance after registration. If there's no business activity, it's advisable to promptly initiate the cancellation process. Even if a tax official initiates the cancellation, you should initiate the reinstatement of GST registration by settling any necessary penalties or fees. Once the registration is restored, you can either proceed with the cancellation or continue to submit returns.

Frequently Asked Questions:

What is GST registration cancellation?

GST registration cancellation is the process of terminating a taxpayer's Goods and Services Tax (GST) registration. It is done when a business is no longer liable to pay GST or ceases operations.

Who can initiate the GST registration cancellation process?

GST registration cancellation can be initiated by either the taxpayers themselves or by the tax authorities. In case of the taxpayer's death, their legal heirs can also apply for cancellation.

What are the reasons for canceling GST registration?

GST registration can be canceled for various reasons, such as discontinuation of business, merger, demerger, transfer of business, or the death of the taxpayer.

How can a taxpayer apply for GST registration cancellation?

To apply for GST registration cancellation, a taxpayer needs to log in to the GST portal, navigate to the registration section, and select "Application for Cancellation of Registration." The specific form (GST REG-16) should be filled out with relevant details.

What documents are required for GST registration cancellation?

Some of the essential documents required for GST registration cancellation include the PAN card and Aadhar card of the authorized signatory, details of the last return filed, and documentation related to the transfer, merger, or demerger of the business.

What happens after applying for GST registration cancellation?

After applying for cancellation, taxpayers will receive a cancellation order in Form REG-17. They will be notified via SMS and email, and the order will also be available on their GST dashboard.

Can a taxpayer file returns or upload invoices after GST registration is canceled?

No, after GST registration is canceled, taxpayers cannot file returns or upload invoices for periods after the cancellation date.

Can registration details be updated after GST registration cancellation?

Registration details cannot be updated after the cancellation order is issued. However, email and mobile numbers can be modified as long as all dues are cleared.

How can a taxpayer revoke the cancellation of GST registration?

If the tax officer initiates the cancellation, the taxpayer can apply for the revocation of GST cancellation using Form GST REG-21 within 31 days from the cancellation order. The application may involve settling penalties or fees.

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