Cancellation of GST Registration in India

Last Update Date : April 04, 2019
Estimated Read Time: 4 min

GST brought various taxpayers registered under different indirect tax laws under its rule. As GST is a destination-based tax, so any supplier with an aggregate turnover exceeding Rs 20 lakh needs to register under GST. Certain types of suppliers need to compulsorily register under GST irrespective of their turnover and some have the option to do so without any compulsion. However, every registration can be cancelled irrespective of whether it was a compulsory one or not.

Types of Cancellation of Registration

While a taxpayer can opt to cancel registration himself, a Proper Officer can is also authorised to do so. The provisions related to this are covered in section 29(1) of CGST Act 2017.

  • Cancellation of GST registration by a registered person (or his legal heirs)
  • Cancellation of GST registration by the Proper Officer

Voluntary Cancellation of GST Registration by Registered Person

You cannot simply cancel your registration for any reason. You can opt can opt for cancellation of registration for the following reasons:

  • If the business of Registered Person has been discontinued.
  • If the Registered business has been sold or transferred to some other entity, such other entity needs to register under GST.
  • If the person or business is no longer liable for GST registration (Migrated GST Persons can cancel registration if their supply is exempted or turnover is less than threshold exemption limit).

In case of voluntary registration (taken despite not being liable for), no cancellation is allowed until the expiry of one year from the effective date of registration.

Note: Please note that Proper Officer can also cancel the registration for the above mentioned cases as per the provisions of section 29(1) of the CGST Act.

Cancellation of Registration by GST Officer

Your registration can also be cancelled by a Proper Officer if he finds certain specified defaults in your registration. But before cancelling your registration, he will give you an opportunity to be heard on the following grounds:

  • You have contravened prescribed provisions and rules of the Act;
  • You being a Composition taxpayer failed to furnish returns for three consecutive tax periods;
  • You being a Normal taxpayer failed to furnish returns for a continuous period of six months;
  • You had opted for voluntary registration but failed to do business within six months from the date of registration;
  • You had obtained registration by means of fraud, willful misstatement or suppression of facts.

Procedure to Cancel GST Registration

If you opt to cancel your registration, you need to apply for it on the GST Common Portal. You must do this within 30 days of the event which made you cancel your registration. You will need data of stock held on the date and the quantum of dues of payments and credit reversal, and the particulars of payments made.

After you apply for cancellation, the Proper Officer will review your application. Once he is satisfied with it, he will cancel the registration within 30 days from the date of application or the date of reply to notice.

Pending Tax Liability

If you have any pending tax liability or any other obligation, the cancellation of your GST registration will not affect it. You will still be liable to discharge such obligation. If your registration is cancelled, you will be liable to pay an amount, by way of debit in the electronic credit ledger or electronic cash ledger, equivalent to higher of:

  • the input credit in semi-finished / finished / raw stock of goods on the day immediately before the date of cancellation or;
  • output tax payable on such goods.

For capital goods or plant and machinery, you will have to pay the higher of:

  • the input credit taken on such capital goods, reduced by a certain percentage or
  • the tax applicable on the transaction value of such capital goods.

GST Registration Cancellation Forms

Here is a list of forms required for GST cancellation process:

Name of Form Purpose of Form
Form GST REG 16 Cancellation of registration by registered person
Form GST REG 17 For GST Officer to issue show cause notice for cancelling registration
Form GST REG 18 For registered person to reply to show cause notice by registered person
Form GST REG 19 For GST Officer to pass order for cancellation of GST registration by
Form GST REG 20 For registered person to stop the cancellation proceedings based on explaination from Form GST REG 18
Form GST REG 21 For registered person to apply for revocation of cancellation
Form GST REG 22 For GST Officer to pass order for revoking cancellation of GST registration

Revocation of Cancellation of GST Registration

It is possible to revoke cancellation of GST registration if you act in time. If your registration is cancelled suo-motu by the Proper Officer, you can apply for its revocation by filing Form GST REG 21. You can file this form within 30 days of service of cancellation order, requesting the officer for revoking the cancellation ordered by him. However, before applying, you need to clear all the defaults due to which registration was cancelled by the officer like filing all pending returns, making payment of all dues and so on. If satisfied, the proper officer will revoke the cancellation by filing Form GST REG 22.

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CA Chetan Shinde
CA Chetan Shinde
Chetan is the Lead Tax Advisor at H&R Block (India) with an experience of almost half a decade in audit and taxation. His professional areas of interest are GST advisory and statutory audit. Apart from taxation, he is passionate about social causes and works extensively towards rural school development and literacy.