Cancelling GST Registration: When and How
If you have a GST registration but no longer need it, you can choose to cancel it voluntarily. This might be because your business is not active anymore or your turnover has fallen below the required limit. Alternatively, a GST officer can also cancel your registration if your business is not compliant with GST rules. When your GST registration is canceled, you don't have to file GST returns or pay or collect GST anymore.
Voluntary GST Cancellation
If you decide to cancel your GST registration, you need to submit a cancellation request using Form GST REG-16 to the GST Department. If the GST Officer approves, they'll issue a cancellation order in Form GST REG-19.
Here are some common reasons for voluntary GST registration cancellation:
- Your business has shut down.
- Your business has been transferred, merged, or changed.
- Your business turnover has gone below the GST registration threshold.
- The owner of a sole proprietorship has passed away.
Cancelling your GST registration voluntarily can save you from the hassle of filing monthly GST returns and paying penalties.
Cancellation by GST Officer
A GST Officer can start the cancellation process if:
- You haven't filed GST returns for a continuous period.
- You voluntarily registered but didn't start your business within six months.
- You've violated GST laws or rules.
- You obtained GST registration dishonestly.
In such cases, the Officer will issue a show-cause notice in Form GST REG-17. You'll have a chance to explain your side, and then the Officer will make a decision.
How to Cancel GST Registration
Before you start the cancellation process, ensure you've filed all overdue GST returns. Once that's done:
- Submit Form GST REG-16 with your contact details, reason for cancellation, desired cancellation date, and details about your stock and returns.
- The GST Officer will review and issue a cancellation order in Form GST REG-19 within 30 days.
What Happens After Cancellation
After your GST registration is canceled, you must file a final GST return using Form GSTR-10 within three months. This ensures you don't have any pending GST dues.
Revocation of Cancellation
If your GST registration was canceled by a tax officer, you can apply for its revocation within 30 days of the cancellation order. If approved, your registration will be reinstated.
Benefits of Voluntary Cancellation
If your business isn't active, it's better to cancel GST registration. If you don't, you can't apply for a new one with the same PAN. If the government cancels your registration, you'll have to pay late fees to reinstate it.
Keep an eye on compliance and cancel your GST registration if needed!