Cancellation of Registration in GST

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Introduction

 

The registration granted under GST can be cancelled for specified reasons. The cancellation can either be initiated by the department on their own motion or the registered person can apply for cancellation of their registration. In case of death of registered person, the legal heirs can apply for cancellation. In case the registration has been cancelled by the department there is a provision for revocation of the cancellation. On cancellation of the registration the person has to file a return which is called the final return.

 

Reason for cancellation

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a) a person registered under any of the existing laws, but who is not liable to be registered under the GST Act.

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b) the business has been discontinued, transferred fully for any reason including death of the proprietor, amalgamated with other legal entity, demerged or otherwise 11 disposed of.

 

c) there is any change in the constitution of the business; a) the taxable person (other than the person who has voluntarily taken registration under sub-section (3) of section 25 of the CGST Act, 2017) is no longer liable to be registered.

 

d) a registered person has contravened such provisions of the Act or the rules made thereunder.

 

e) a person paying tax under Composition levy has not furnished returns for three consecutive tax periods.

 

f) any registered person, other than a person paying tax under Composition levy has not furnished returns for a continuous period of six months;

 

g) any person who has taken voluntary registration under sub-section (3) of section 25 has not commenced business within six months from the date of registration.

 

h) registration has been obtained by means of fraud, wilful misstatement or suppression of facts

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WHO CAN CANCEL GST REGISTRATION

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A Proper officer under GST can either himself if he may consider necessary to do so, or an application filed by the registered person or by legal heirs of the registered person, in case of death of such person, can cancel the GST registration of the taxpayer.

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However, it is to be noted that once the person obtained GST registration voluntarily, he cannot apply for GST Registration cancellation before the expiry of a one year from the effective date of registration.

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Prior to the cancellation of registration, the officer would issue a notice to such person whose GST registration is liable to be cancelled, requiring show cause within seven working days from the date of service of such notice as to why the GST registration should not be cancelled. The registered person can reply to the show cause notice within the prescribed time, or the GST registration can stand cancelled.

 

Required Information Needed while filing for Cancellation of GST Registration

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The following information must be mandatorily specified by the applicant while applying for cancellation in Form GST REG-16:

• Contact address, which includes the mobile number and e-mail address.

• Grounds of cancellation.

• The desired date of cancellation.

• Particulars of the value and the tax payable on the stock of inputs, the inputs available in semi-finished goods, inputs available in finished goods, the stock of capital goods/plant and machinery.

• Details of registration of the entity if the existing unit merged, amalgamated, or transferred.

• Particulars of the latest return filed by the taxpayer along with the ARN of the particular return.

 

What is GSTR-10?

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If a taxpayer’s GST registration is cancelled or surrendered, then he/she needs to file a return in Form GSTR 10. It is known as the Final Return.

Form GSTR 10 also shows details of the input tax credit (ITC) involved in closing stock (inputs and capital goods) to be reversed or paid by the taxpayer.

The taxpayer can file NIL GSTR 10 also. This return in form GSTR 10 can be filed online as well as offline.

It is important to note that the taxpayer cannot file Form GSTR-10 without discharging full liabilities as declared in this return.

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GSTR-10 due date

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This return has to be filed within three months of the date of cancellation or the date of order of cancellation (whichever is later).

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Who needs to file GSTR 10

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Form GSTR-10 is required to be filed by every taxpayer except:

(i) Input Service Distributor  

(ii) Non-resident taxable person  

(iii) Persons required to deduct TDS u/s 51

(iv) Persons paying tax u/s 10 (Composition Taxpayer)

(v) Persons required to collect TCS u/s 52

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Prerequisites for filing GSTR-10

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To file the GSTR-10:

1) You must be a registered tax payer under the GST with a 15-digit PAN based GSTIN who is now cancelling his/her GST registration.

2) The aggregate turnover of your business should be greater than 20 lakh rupees (10 lakh rupees in case of NE India).

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Steps to file GSTR 10:

1. Access the www.gst.gov.in URL. The GST Home page is displayed.

2. Login to the GST Portal with valid credentials.

3. Click the Services > Returns > Final Return command.

 

Details to provide in GSTR 10
 

The following details must be provided in GSTR-10:

1. GSTIN

2. Legal Name

3. Business Name

4. Address

5. Application Reference Number (ARN): Application for surrender

6. Effective Date of GST registration surrender/cancellation

7. Whether cancellation order has been passed

8. Unique ID of cancellation order

9. Date of Cancellation Order

10. Certificate of practicing chartered accountant or cost accountant, if applicable

11. Closing Stock held on date of surrender or cancellation

• Inputs as such

• Inputs in semi-finished goods

• Inputs in finished goods

• Input services

• Capital goods

12. Amount of tax payable on closing stock

13. Verification

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Penalty for non-filing of GSTR 10
 

• If a taxpayer fails to file final GST return, then a notice for not filing the final return will be sent to that registered person. The person will be given 15 days time for filing the return with all the documents required

• If the taxpayer fails to respond to the tax notice or does not file the GSTR-10 return, then the tax officer would pass the final order of cancellation with the amount of GST tax payable along with interest or penalty.

 

 

DISCLAIMER- These materials are public information and have been prepared solely for educational purposes. These materials reflect only the personal views of the author and are not individual legal advice.

It is understood that each case is fact specific and that the appropriate solution in any case will vary. Finally, the owner will not be accountable for any loses injuries or damages from the exposures or usage of this information.

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