Dec 052017

Cancellation of GST Registration

When need for cancellation for registration in required:

  1. In case GST registration is issued by department is the process of migrating the existing registration and under GST regime assessee is not liable to get himself registered.
    1. For example, the dealer is registered under service tax being his turnover exceeding Rs 10 Lacs and his registration is migrated by the department. Now under GST regime such taxable person is not liable to get himself registered if their turnover is less than Rs 20 lacs and hence such persons are in batter position if they cancel their registration.
  2. If there is change is rate of tax of goods and service deal in by the dealer to NIL. In such cases this total turnover is exempt from GST net subsequently and liable for cancellation.
  3. If taxable person have closed his business entity and transfer is whole business ongoing basis.
  4. There is change is constitution of business resulting in change in the PAN number etc. ..

Cancellation in case of voluntarily registration:

No application for the cancellation of registration shall be considered in case of a taxable person, who has registered voluntarily, before the expiry of a period of one year from the effective date of registration. The effective date of registration is “Date of issue of certificate” mentioned in line number 9 of GST REG-06 issued at the time of registration of the firm on the GST portal.

Cases and situations for compulsory cancellation of registration:

The registration granted to a person is liable to be cancelled, if the said person,-

  1. Does not conduct any business from the declared place of business; or
  2. Issues invoice or bill without supply of goods or services in violation of the provisions of this Act, or the rules made thereunder; or
  3. Violates the provisions of section 171 of the Act or the rules made thereunder.

Can department cancel registration of the taxable person in case NIL return being filed or no return is filed during certain tax period:

The answer is no. Because filing NIL return or non filing of return does not mean that registered person is not conducting any business at the declared place. The term conduct of business is not limited to mere purchase and/or sale of goods and/or services. It includes wide range of activities from planning, organizing, directing or controlling, strategy making etc for the business. Thus, filing of NIL return or no return alone can not cause cancellation of registration.

How to apply for cancellation:

A registered person,

  • other than a person to whom a registration has been granted under rule 12 or
  • a person to whom a Unique Identity Number (UIN) has been granted under rule 17,

Seeking cancellation of his registration shall electronically submit an application in FORM GST REG-16.

Such person shall include therein:

  • The details of inputs held in stock or
  • inputs contained in semi-finished or finished goods held in stock and
  • The stock of capital goods held in stock on the date from which the cancellation of registration is sought,
  • liability on the above stock
  • The details of the payment, if any, made against such liability and

Further he may furnish, along with the application, relevant documents in support thereof, at the common portal within a period of thirty days of the occurrence of the event warranting the cancellation, either directly or through a Facilitation Centre notified by the Commissioner.

Process of cancellation:

Where a person who has submitted an application for cancellation of his registration is no longer liable to be registered or his registration is liable to be cancelled, the proper officer shall issue an order in FORM GST REG-19, within a period of thirty days from the date of application cancel the registration,

Such cancellation of registration shall be with effect from a date to be determined by proper officer and he may notify the taxable person, directing him to pay arrears of any tax, interest or penalty including the amount liable to be paid under sub-section (5) of section 29.